Paradigm Shift: How Data and Technology Are Remaking Performance Management
The Millennial Surge: How Direct Selling Companies Should Adapt
In our previous article, we’ve already addressed the issue of what it takes for companies to engage millennials and make them stay. However, in the Direct Selling industry, there are some distinctions that both facilitate and aggravate the successful collaboration with millennials. These two distinctions boil down to their psychological traits and the ever-changing business environment direct selling companies operate in.
Reasons why millennials are a good match for DS companies
Numerous studies have been focused on millennials, describing their peculiar features, attitudes, needs and aspirations. We want to touch upon three characteristics that are focal in determining the “whys” and “hows” millennials are already powering up direct selling companies today.
- They are entrepreneurs.
Though millennials are collaborative and appreciate mentorship, they also need to express themselves, show what they can do on their own—be entrepreneurs. This is reflected in the Amway Global Entrepreneurship Report showing that 52% of millennials consider the option of starting a business. Also, though a lot of representatives of this generation work full-time, 50% of them squeeze time for freelancing. Millennials need money, whether to pay for student loans or to just ensure some stability. The Country Financial report states that 53% of millennials over the age of 21 are still receiving financial assistance from their parents.
DS companies can satisfy both needs: offering an unconventional career of “being your own boss” and providing a supplemental income.
- They are proponents of flexibility.
A PwC study shows that independence and flexibility are an important condition for millennials when they consider any job opportunity. They won’t sit in cubicles or enjoy a 9-to-5 workday.
DS companies are based on mobility and freedom, offering their distributors flexibility not only in scheduling their hours but also in controlling their income level. Thus, they also meet this millennial need.
- They are social.
Millennials are inherently social creatures. Social media is their natural habitat, since they grew up with technology plugged into social media. They love interaction, they care about other people’s feedback and reviews. In fact, 90% of millennial consumers trust peer recommendations more than ads. What’s more, if millennials like something, they instantly Share it, Retweet it, or Like it, letting the world know about it.
DS companies can use millennials’ natural “instincts” to noticeably improve their social media marketing campaigns. Just for the record, Forbes found that 62% of millennials are more likely to buy products if the brand engages with them through social networks. So as distributors, millennials can enjoy easy selling experiences with no need to invade people’s personal spaces, e.g., going from door to door, while already having a wide network of online peers.
How DS companies can win over millennials in a gig economy
Talent shortage, competitive markets, and disruptive technologies are not the only threats that stand in the way of recruiting and retaining millennials. The Deloitte Millennial Survey 2018 shows that 62% of millennials consider gig economy opportunities as a good alternative to full-time employment. Such companies like Uber, Handy, TaskRabbit and others work on the basis of engaging independent contractors as well. They also offer flexibility, a good supplemental income, and an opportunity to be your own boss.
So how can direct selling companies compete? Ryan Napierski, President at Nu Skin, says that “direct selling companies provide a gig and more opportunity beyond the single product or service transaction that a gig provides.” He suggests seeing the gig economy not as a threat but as an opportunity to become better. After all, DS companies offer things that the gig marketplace don’t: various career paths, a community of like-minded people, and the possibility to earn more with time.
To stay competitive and attract millennials, as well as other generations, direct selling companies also need to do the following:
- Remove labels.
Labels and stereotypes haunt us everywhere. Unfortunately, millennials view the direct selling industry from the perspective of their childhood memories.
Direct selling is reserved for middle-aged people hoping to make some money on the side, or retirees looking for something to keep them busy. Heck, I’m a young guy—it’s how I thought of direct selling until I started working at Hyperwallet and got a better understanding of the business model. I can still remember when, as a teenager, the MonaVie craze hit our town in force, and all of the adults in my life were suddenly wrapped up in direct selling. My mom went to local MonaVie events with her friends. My history teacher described the health benefits of the acai berry. My great-aunt boasted about her tidy side income.
That’s how Garrett Hughes, a millennial himself, describes his former perception of the DS industry. But he’s not the only one. To prove to millennials that the times when that middle-aged person with a suitcase was going from door to door to sell something are now in the past, DS companies need to emphasize how their business looks in the current age: with social media and websites as the most effective selling channels, a comfortable and flexible way to earn a supplemental income.
- Reduce barriers to entry.
“The opportunity for easy entrée into a market with low cost, especially in the more challenged markets in the world, and to be able to work from home, to work at one’s own pace and skill set—that’s a huge consideration,” says DSA Executive Vice President Adolfo Franco. DS companies offer this flexibility, however, there’s one competitive aspect that companies like Uber and Airbnb use for their own benefit.
Jonathan Gilliam, a direct selling marketing and management expert, highlights the need for direct sellers to remove any types of barriers to enrollment to be able to withstand the gig economy in his book Blastoff! Creating Growth in the Modern Direct Selling Company. “A $99 sign-up fee is $99 more than what Uber charges,” he sums up.
- Lead to success.
Don’t leave millennials all alone. This piece of advice is suitable for all industries, however, for direct selling, it’s crucial. The majority of millennial distributors have little or no experience in doing things on their own as independent contractors, which means that they need greater support from their uplines from day 1. What does this mean for DS companies?
First of all, it entails the ongoing training and development of their uplines: a constant improvement of soft skills, management and leadership skills, as well as product knowledge, etc. Secondly, it means supplying distributors with tools that can simplify and streamline their business activities. Working with industry-leading companies like New Avon and Oriflame, and studying the difficulties their field has encountered for years, we, at Rallyware, ensure that independent distributors get all the necessary support by leading them through personalized paths to success and providing smooth onboarding, learning activities tailored to each distributor’s performance data, robust analytics, social selling enablement tools, gamification for better engagement and retention.
Since we have a large experience of driving productivity for DS companies on an individual level, we learned that for this industry, specifically, just a learning platform is not enough. DS businesses achieve more through a platform that combines learning with smart business activity capabilities that prescribe to each distributor daily, personalized reminders to do specific actions based on internal and external data, thus, guaranteeing sustainable future growth for the individual and the company as a whole.
- Provide rewards.
Everyone wants recognition for what they do, and millennials are no exception. Consequently, direct selling companies should take care of both financial and non-financial incentives. For example, AdvoCare, a DS company that sells dietary supplements, has recently introduced the Champion’s Pathway aimed at recognizing the achievements of its distributors by granting them various bonuses. This way, “newly qualified advisors who help three of their distributors earn a New Distributor Bonus within nine consecutive pay periods will be eligible for a $500 bonus.” Rick Loy, Senior VP of Sales and Training, says that this bonus program will help their independent distributors successively move towards their goals and learn healthy business habits.
Mind that you don’t limit your rewards program with money only. A smart training and business activities platform with gamification will be a valuable asset for not only encouraging purpose but also for effective distributors’ training. Since millennials crave for instant gratification, points and badges earned for completed tasks will adopt a role as snap-action incentives, increasing motivation and engagement.
- Make it about others.
Making the world a better place to live, finding a meaningful purpose at work, and making the difference are things that drive millennials. In fact, 90% of them said that being able to give back was an essential factor in choosing a job according to DSA’s U.S. Consumer Trends report. Consequently, direct selling companies with altruistic messages have higher chances of attracting and retaining millennial distributors.
“We have a $62 billion industry that’s highly – I would say woefully – underregulated. What we as a company are hoping for is that we begin to regulate and screen ingredients before they go into the products that are put on the shelves,” says Gregg Renfrew, CEO of Beautycounter, a Santa Monica-based skin care company that focuses on creating products with natural ingredients. Renfrew is set on strengthening federal regulations over the beauty industry to “put some standards in place that would protect the American consumer.”
As you can probably guess, such a mission would appeal to millennials because this company cares not only about money but also about people, offering them natural beauty products and wanting to set the bar for other companies to safeguard all consumers.
- Show that you value them.
Millennials want to not only contribute to the world and people around them, they are also guided by a principle of “What’s in it for me?” And it’s more than just a financial reward. Millennials need to know that their needs and desires are listened to and will be met. Direct selling companies can start by showing care and creating connectedness, a sense of belonging to a group of people who share the same purpose and interests and who are passionate about what they’re doing to make other people’s lives, as well as their own, better.
Jamberry, a nail wrap company, launched one of its most successful social media campaigns called #becauseofjamberry, the purpose of which was to show that Jamberry was “about changing #lives, #relationships, #hope, #family, and #love; #dreamsdocometrue.” Consultants shared their stories on Facebook and Instagram about the opportunities they got thanks to a supplement income from Jamberry. “One woman said it allowed her to pay for her child to join a chess club. Another was able to take her husband to dinner at a restaurant they’d never been able to afford. Our product is about more than just nail wraps. We’re able to help those we care about the most,” summed up Jamberry’s former senior marketing and PR manager, Caitlyn Brooksby.
- Get rid of pipe dreams.
Trying to build a business on the basis of promises that one can’t support is a path to failure. Direct selling companies that still think they can recruit and retain distributors, promising a lavish lifestyle are doomed. Keep in mind that pragmatic millennials won’t go for pipe dreams.
Ambit Energy, a company that provides electricity and natural gas services, has removed all lifestyle imagery from its marketing materials. Darrell Starkweather, VP of field development and support, further explains this decision:
We are proud of our leadership, the service we offer and the income opportunity we have available for those who want to participate. Lifestyle imagery may imply a certain level of success that not everyone aspires to. So, we removed the assumptions. Do not exaggerate the opportunity’ is at the core of our training and culture. It is taught from day one by corporate leaders and field leaders. It’s incorporated in their contracts, the tools they use to recruit and in ongoing trainings as they develop.
Big promises won’t optimize your recruitment strategy, on the contrary, they will only increase turnover. In fact, Starkweather emphasizes that after removing lifestyle imagery, his company saw an upside since its people could create their own goals and see opportunities as more achievable.
By taking into account factors that drive the millennial field and offering them unconventional career options powered by technology-driven support, direct selling companies will be able to retain distributors, attract more people, and grow their businesses.
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