2020 State of the Channel Update
I’ve been in this industry a long time—35 years to be exact—but by all measures 2020 has been a year for the record books. And while retail outlets have struggled to navigate these turbulent times, many companies in direct selling have enjoyed consistent, progressive growth throughout 2020.
We began tracking this momentum in March of this year to provide industry executives with timely and salient data related to the direct selling industry’s performance in the COVID-19 environment. It would be a significant understatement to say the data trend has been impressive.
Towards this end, I’m excited to share with you, my industry partners and friends, some of the growth strategies and best practices that leading companies have deployed in a curated and comprehensive “State of the Channel.”
To review individual survey results by month, click here.
A POSITIVE SHIFT: GROWTH FUELED BY CUSTOMER ACQUISITION
First and foremost: the unprecedented growth the channel is experiencing is centered around customer acquisition and retention. This is a direct reflection of one of our channel’s key differentiators.
Consumers around the globe are working from home, educating their children from home, seeking entertainment from home—and, as a result, are leaning more and more on digital consumerism to meet their daily needs. “Buying and trying” digitally has become the new normal—but consumers still actively seek out social connections and product recommendations.
Perfectly Positioned
This is where direct selling truly shines. Consumers are now far more receptive to the convenience, quality, value and reliability of direct selling companies and the products and services they provide.
As a channel, we pioneered the social selling relationship and are uniquely suited to provide a digital, online experience that still retains a personal touch—something traditional retail chains and online outlets often struggle to achieve.
Bottom line—today’s most successful direct selling companies are customer focused—investing time, energy and resources to enhance the customer experience and increase customer acquisition and retention. They are able to do this by bringing unique, viable and valuable products that inspire consumer attention and loyalty—it’s why tens of millions choose our channel every month in the U.S. alone.
Opportunity Knocks
The strong draw of these exceptional products has also ushered in growth in the distributor base as well. When customers love the products, they also develop a love for the brand and company—and that makes taking the leap to become a distributor a simple, intuitive choice.
Global economic conditions and buzz-worthy products have led millions of individuals to embrace direct selling and become independent business owners and micro-entrepreneurs over the last few months. As an industry, we’re growing. And we can continue to grow.
Key Takeaway
Our channel has an opportunity to become more mainstream than ever before. There is a compelling story to be told, and if we provide the tools and training our field needs to share that story virtually—we have an immediate opportunity to grow our field and customer base as well.
EMPOWERING AND RECOGNIZING CUSTOMER-FOCUSED DIRECT SELLERS
There is another obvious benefit to this renewed focus on quality products and customer acquisition. As we all know, the Federal Trade Commission targets direct selling companies that they feel generate too much revenue from recruitment rather than product sales.
Direct Selling is evolving, shifting away from the outdated model of building a team and being “garage qualified” to a more sustainable, legitimate structure focused on customer acquisition and product sales.
That’s something to celebrate and promote! As a channel, we want regulators, critics, industry watchdogs, reporters and the general public to recognize the tremendous shift that has happened within the industry. It’s a new day in direct selling! Let’s acknowledge the problems of the past but—more importantly—focus on the solutions we have created.
The Customer Centric Recognition Program
With that in mind, I recently asked the editorial team at Direct Selling News to create a way to recognize forward-thinking companies. The result is a powerful new program designed to highlight, acknowledge and celebrate direct selling companies focused on building a strong retail base.
I’m excited to announce the new Customer Centric Recognition (CCR) Program. It’s a unique and influential way to honor companies that are building a sustainable, scalable and customer-centric future for our channel.
Qualifying companies will be those that report high customer-to-distributor ratios and prioritize customer sales. These are the competitors to beat in today’s marketplace. You can learn more about CCR here.
Key Takeaway
Combating negative, inaccurate and outdated perceptions of our channel is imperative for our continued growth and reputation. Creating a measureable method to recognize companies that are doing it the “right” way means we can address the elephant in the room and silence the critics in a profound way.
KEEPING IT SIMPLE ISN’T STUPID
Fundamental changes in philosophy and execution of this magnitude don’t happen without challenges. It takes more than just vision and awareness to succeed. It also requires the right systems and tools to execute that vision.
For more than three decades, my company, SUCCESS Partners, has been a thought leader and innovator in the industry. Part of my mission has always been to stay ahead of the curve and create the tools and systems that support and keep the channel growing forward.
That means creating selling systems that keep pace with the needs, demographics and focus of the field. As the channel becomes more customer centric, the need for simple, proven and concentrated selling systems becomes more imperative.
A Duplicable Digital Experience
Companies that are successfully scaling have created more efficient customer acquisition systems by implementing simple, replicable digital tools and messaging. The customer’s experience is everything—and technology is key.
The best tools are easy to navigate for both the distributor and the end consumer. They eliminate barriers and allow for quick decisions and smooth purchases that ultimately create a memorable brand experience that consumers feel good about.
The Right Products. The Right Presentation.
The most effective direct selling executives also understand not just raw sales numbers, but the systems their field can best use to generate those sales. Executive teams are working in tandem with field leadership to develop and introduce products that easily integrate into existing systems. Products that round out their product line in a logical, cohesive way. Products that allow for predictable results.
They also maintain a laser-like focus on selling, recruiting, onboarding and retention. That means keeping a close watch on product and income claims as well as compliance, making it easier for the field to navigate those tricky waters by providing clear guidance and training on an ongoing basis.
Creating A World Class Customer Experience
The shift lies in clear communication not only with your distributors, but also with all of your end customers. Direct-to-customer digital communication, sales and marketing strategies empower our channel.
They simplify product education. They allow for more targeted and relevant product recommendations. They make every touch point more meaningful, even if it’s virtual.
Hope Empowers and Inspires
That personal touch is foundational to our way of doing business. Focusing on the consumer is vital right now, but we must also remember that purpose and passion ultimately drives field engagement and thus performance.
This mix of messaging and culture prevails within our fastest growing companies. Our channel provides the recognition, community and connection people are yearning for. Distributors thrive in this atmosphere of growth, positivity and encouragement.
When the world is filled with negativity, pessimism and confusion, the appeal of direct selling cannot be underestimated. To maintain that edge, we must invest and engage in being better every day.
Key Takeaway
Now more than ever, direct selling executives must provide a simplified, fresh and adaptive approach that embraces an immersive customer experience. Identify, empower and recognize emerging field leaders who are flexible, analytical and responsive to change.
VITAL VIRTUAL CONNECTIONS
Direct selling has always been based on personal relationships. What 2020 continues to show us is that those who have pivoted and fully embraced the need for change during these times, are finding ways to create powerful connections virtually.
Our fastest growing clients have fully embraced the transition to a mobile society and welcomed the cutting-edge technologies that enable it. Many are gaining momentum and setting record revenues thanks to these new strategies.
Going Beyond the Basics
The most impactful, empowered independent distributors operate digitally: connecting with prospects on social media; sending samples through mobile apps, conducting team meetings and creating culture via ZOOM and Microsoft teams.
The right tools make this even easier. For example, the NOW app from SUCCESS Partners offers best-in-class CRM, a social selling suite, automated sampling, video commerce features and more—all designed to accelerate sales and growth. Learn more about how the NOW app equips your distributors to streamline their daily method of operations to more easily connect, communicate and convert.
A New Approach to Events
Even in this mobile world, events still play a vital role in our culture. Of the 100 companies we’re currently tracking, 90 percent have cancelled in-person events through the end of the year except for small leadership gatherings.
In their place, virtual events provide a viable, effective and economical model for educating, recognizing, promoting and training distributors. Just last month, Tony Robbins hosted 23,000 paid attendees in 130 countries at “Unleash the Power Within,” a three-and-a-half-day interactive event.
Plexus, Arbonne, BeachBody, Isagenix, Optavia, Monat, Usana and many others have hosted national and international virtual events attended by anywhere from 10,000 to 50,000 or more in the last 90 days. These numbers prove that virtual events are a viable facilitator to company culture and growth.
Events serve to recharge and reinvigorate independent business owners, offering them the personal development tools and inspiration they need to grow their businesses and reach new customers around the world.
Key Takeaway
While the power of personal connections hasn’t changed, the methods used to develop them continue to evolve. Social media, mobile apps and virtual gatherings are important tools in every growth-focused direct selling company’s arsenal.
GROWING FORWARD—SUCCESS PARTNERS UNIVERSITY 2020
We’re thrilled to announce our own virtual event, SUCCESS Partners University, on November 9-13, 2020. We’ll have more than 40 guest speakers who will generously share best practices in a TED style format to educate and uplift you, including many of the most popular thought leaders and contributors from SUCCESS magazine. And over 30 direct selling executives representing a combined $30 billion in annual revenue, more than 30 million micro entrepreneurs, and collectively, are projected to exceed $3 billion in growth in 2020 over 2019!
Experience this premier event with the largest group of executives ever to attend. This year, we’re honored to have 30 active companies and 8 supplier companies sponsoring our virtual event. Learn more and register for the event at spu2020.com.
THE TIPPING POINT
In the face of receding opportunities elsewhere, growth is pervasive throughout our channel.
We’re following more than 30 direct selling and network marketing companies based in the United States that are on track to grow by more than $100 million this year—compare that to just two in 2019.
It’s time to seize this powerful opportunity. The world has changed. Fundamentally and permanently. How we work, shop, connect, educate and relate have all found a brand new normal. We can choose to stand by and watch it happen while feeling powerless. Or we can choose to engage, energize and embrace the transformation while providing hope and opportunity.
Michael Jordan famously said, “Some people WISH it would happen, some people WANT it to happen, others MAKE it happen.”
Friends, it’s time to make it happen. I invite you to join us online at SPU in November. I’d also love to connect with you personally to discuss how SUCCESS Partners can help ignite powerful change for your company.
Let’s grow forward together!
Stuart Johnson
CEO & Owner | SUCCESS Partners
