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Direct Selling Innovation: When Challenges Turn into Opportunities
The direct selling industry has always been surrounded by a number of challenges that propelled companies to constantly develop and innovate to succeed. Now more than ever, the gig world forces direct selling organizations across the globe to reinvent the traditional business model and not lose the final battle for independent workforces and direct customers.
There’s one thing, though. With the right mindset and smart technologies, direct selling companies can turn the imminent challenges into looming opportunities to once again transform direct selling and strengthen their competitive ability and business agility.
Let’s take a closer look at major challenges that can become opportunities for improvement for the direct selling industry.
Compliance and regulations will improve brand protection and customers’ trust
The goal of the FTC, FDA, Seldia, and other similar organizations is to ensure that direct selling companies operate with the highest level of business ethics to protect customers and distributors from illegal practices. That’s why the scrutiny of business practices is actually a good opportunity for direct selling companies to become better at adapting to constantly changing regulations.
Research suggests that more than 95% of regulatory issues and risks come from the field. The reason is that with a large group of distributors, it becomes extremely difficult to monitor the actions of every individual. The majority of recruits are really excited about new entrepreneurial opportunities, but they usually don’t have any relevant sales background. Being enthusiastic about making their successful first sales, distributors are sometimes prone to exaggerating products’ value to sell more or claim large potential earnings to recruit faster, misrepresenting their company in this or that way. So how can they ensure that every distributor operates within the best practices and regulations?
Proper compliance training within a smart performance enablement platform can protect direct selling companies from regulatory issues. First, such a system will collect and analyze tons of performance data to see which distributor does what at any given point of time, where they struggle, what they do wrong, etc. Second, the system will send just-in-time relevant learning nuggets and business activities to keep every distributor in the loop about any updates on compliance policies and regulations. This will give companies insight into distributors’ performance and ensure that they avoid any regulatory violations.
Information overload will be minimized through personalized onboarding
Following on challenges that inexperienced distributors may face during onboarding, the most complex and voluminous one is compensation plan comprehension. Along with managing busy daily schedules, learning new product information, and striving to build their own businesses, distributors should clearly understand the compensation plan structure. All these business-building activities can lead to information overload and disengagement.
A data-driven performance enablement system has become a must-have for many direct selling companies. Thanks to learning and business activities triggered at the right time to meet the immediate need of every distributor on-the-go, the challenge of finding time to learn becomes as simple as 1-2-3. Moreover, the system allows companies to use a compensation plan as a means to motivate high productivity, driving only relevant behaviors and actions aligned with individuals’ and businesses’ goals and rewarding every small step.
“The enemy is not the complexity of the compensation plans. The issue is the behavior that the compensation plans motivate and reward,” explains Jay Leisner, president of Sylvina Consulting. The strategy Nu Skin has chosen to follow is based on this very principle. Here’s how Chris Stubbs, Senior Vice President of global sales and operations at Nu Skin, describes the company’s strategy.
“We decided to focus our sales compensation on three core business activities that provide flexible, fast and fulfilling rewards in order to meet people at their desired goal level. While simplicity is always an essential goal in the development process, it should not come at the expense of the desired actions you want to drive. This requires a clear understanding of who your business customers are and what their needs are when it comes to building their new and ongoing businesses.”
When direct selling companies are intentional about the goals and behaviors they want to drive and reward, it’s easier for distributors to understand compensation plans. Moreover, when they’re supported by just-in-time personalized activities, they stop seeing the business-building experience as something really difficult.
Amazonification and Uberization will surpass the needs of customers and independent salesforces
The gig economy has changed the way all industries operate and appeal to their customers and workforces, and the direct selling industry has not been spared by these changes. Specifically, the gig economy has led to the rise of two trends.
- Think phygital when it comes to customers
With the emergence of ‘amazonification’, pressure has been put on the direct selling industry due to the opportunities of easy and convenient shopping through cutting-edge technologies: “one-click checkout, mobile wallet, personalized product recommendations,” etc. Such possibilities have revolutionized customer experience.
However, most customers still value ‘a human touch’ during shopping. To be successful in the world of the post-amazonian effect, direct selling companies have to think phygital. In other words, they should still promote personalized shopping experiences through trusted product experts (distributors) while supporting it with data-driven technologies such as product recommendations and just-in-time reminders to follow up with each customer. This approach allows physical shopping to be highly targeted: customers’ behaviors, needs, and interests are now becoming distributors’ assistants in building customer trust, loyalty, and engagement.
- Deliver a frictionless distributor experience
It’s almost 2020; the world is full of various gig opportunities offering flexibility, independence, entrepreneurial agility, and… a frictionless experience. However, not all distributors experience this last aspect when joining a direct selling company, and this is a problem.
“People sign up because they see a way to reach their goals. But if they can’t get past the first week, all that excitement and energy turns into frustration,” explains Yak Gertmenian, SVP of business development and sales strategy at the Gig Economy Group. Business-building experiences should be seamless for distributors right from the moment they decided to enroll, because “when a person can sign up for Uber or Lyft in seconds, download an app in minutes and start making money within the hour, explanations about the other benefits of direct selling opportunities may fall on deaf ears.”
With the goal of making distributors’ experiences frictionless and exciting, the Rallyware team has been helping direct selling companies improve onboarding and offer continuous support through a smart performance enablement platform. This allows new distributors to clearly know WHAT to do, HOW to do, and WHEN to reach their personal goals.
If direct selling companies want to rule the gig world, they should stop considering all of the above-mentioned challenges as things to fight against. Instead, by embracing the right technologies, now is the time to transform direct selling through innovation.
Hop on a call with the Rallyware experts to see a customized demo of what it’s like to drive innovation in your company through a data-driven performance enablement platform!
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