Why Distributor and Customer Experiences Are Key to Success in Direct Selling
Global Expansion Done Right
In the age of globalization, volatile business environments, increasingly competitive markets, and a record level of talent shortages, global expansion is an important growth strategy for many companies. For the Direct Selling industry, it’s the next logical step in a business evolution since DS relies on the power of communities – global like-minded networks with no geographical borders. Direct sellers have a great chance of success in international markets because they “tap into people’s cross-cultural desire for health, wellness, and beauty”. In addition, they offer flexible entrepreneurial opportunities that resonate with the modern workforce needs creating low barriers to entry with no required previous experience.
However, launching any business internationally means facing certain challenges, and how well these challenges are met can make the difference between successful growth and failure.
These six steps will help you achieve success with your global expansion.
1. Work closely with local governments
A common expansion strategy advocates starting with countries that differ least from a current market in such aspects as language, business practices, regulations, cultural norms, economic conditions, etc. However, when it comes to countries that possess huge differences, a vague one-size-fits-all approach to business expansion can be a fatal error.
Charles Allen, Senior Vice President of Global Business Development at Nu Skin, suggests “working closely with local government officials when entering a new market” to better understand the conditions where your business will operate. This was a factor in the company’s successful expansion to Asia, Europe, Africa, and the Pacific, in addition to the Americas.
2. Stick to local regulations
The second strategy stems from the above-mentioned one. Executives need to understand that government regulatory policies will dictate their business practices from day one. If they keep sticking to their “home” strategies in a foreign country, then it’s highly likely they won’t succeed in the long run. What’s worse, they can suffer substantial financial loss for violating the local law.
After pleading guilty to trafficking oils from endangered plants without any authorization from the Peruvian government, Young Living released an apology letter with a promise to “avoid future mistakes and adhere to the high standards set across the entire organization”. To stay compliant with laws and regulations in any country where the company does business, Young Living developed the Lacey Act Compliance Program to ensure that “plant products come from legal and sustainable sources.” This program was the first in the essential oils industry to be accepted by the government. Young Living currently still works with legal experts to stay up to date with the most recent laws and their right application to business needs.
3. Recruit the right local leaders
To facilitate the expansion process and ensure that you choose the right business practices, it’s important to hire local leaders in the proposed market. “Some companies come into foreign markets and want to do things the ‘American way,’ but to be successful, you need to adapt to local cultures and customs,” says Scott Lewis, Chief Visionary Officer at Jeunesse.
By recruiting regional management experts, Jeunesse was able to faster “learn local business laws, establish entities, register formulas and products, as well as obtain licenses and proper labeling in each new overseas market”.
4. Build a community of engaged followers
A strong online presence can benefit companies that plan to expand their business abroad. Social media is a great means of bringing potential customers from all corners of the world via an upgraded “word of mouth” practice. Think of it like an initial business expansion that doesn’t even require the company to cross a border.
Glossier centered its growth strategy on establishing and cultivating a community of engaged followers and turning them into passionate ambassadors. This helped the company greatly reduce promotion costs when entering foreign markets. “Our proposition to the customer is so much more than the availability of a product. It is inclusion, the community experience, a stakeholder status in Glossier. For us to be able to give those things to customers in other territories, we have to be on the ground engaging with people,” said Henry Davis, Chief Operating Officer at Glossier. Such preliminary engagement within the international communities helped the company to win market shares even before entering foreign markets.
5. Ensure continuous workforce support via training
To keep businesses growing, companies need to provide their workforces with ongoing support in the form of a streamlined onboarding, personalized hands-on training, and data-driven gamified engagement. This is where smart learning technology has come in handy for so many expanding companies with independent workforces. Without such learning tools, it is extremely difficult to ensure that the entire distributed workforce has relevant support at every step of their journey within a company no matter where they’re headquartered.
Part of Avon’s strategic growth plan consisted of modernizing and digitalizing the company along with revising its training programs to foster a performance-based culture throughout the company. For this reason, Avon segmented both training and communication, which allowed them to attract new sales talent in key markets and increase its competitive ability.
6. Be at the right place at the right time
It’s always a good idea to establish roots in your home country before going international. However, sometimes it’s worth taking a risk and starting global expansion when it’s the right time. Besides continuously hiring great local and foreign leaders, Jeunesse propelled its expansion strategy by focusing on global infrastructure in the Asia Pacific region early on rather than spending years solidifying their brand in its home country.
“We were looking at U.S. companies who had great momentum initially, but who then would reach a saturation point around $700 million to $900 million. They couldn’t break the $1 billion mark,” comments Scott Lewis on why they decided to shift their focus in the first place. Such a bold move has brought Jeunesse into more than 120 countries with a worldwide independent workforce of 550,000 within just six years.
By building your global expansion strategy with these six tips in mind, you will be able to conquer new markets and strengthen your competitive ability for many years to come.
If you want to effectively jump-start your global expansion, request a demo to see how Rallyware can support your business and workforces worldwide!
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