“As we reflect on the triumphs and turmoil of 2020 and look forward to 2021 and beyond, I think we can all agree that this is a truly unique moment in time.”
We have been presented with a rare opportunity to share and learn from one another. With that goal in mind, I have been conducting research and growth surveys with industry leaders throughout 2020. The results have been compiled, and we will continue to communicate emerging trends, hot topics and actionable opportunities with you—all in an effort to help our channel continue to GROW forward.
I’ve been in this industry for 35 years, and 2020 has really been one for the record books! I think many of us have been doing quite a bit of reflection this year—so many of the activities and expectations of our daily lives have been completely upended. And, as a result, I have been doing a lot of thinking about the importance of our channel and the positive impact it has on so many people. This industry has brought opportunity to millions around the world. It’s important to me to give something back to the channel that has done so much for each of us.
Right now, the world seems unpredictable and chaotic. How we work; how we shop; how we educate our children; how we consume media and entertainment; how much time we spend together; how much time we spend apart—everything has changed. Meanwhile, the micro-entrepreneurship and side hustle culture is exploding. And although direct selling is growing, we aren’t leading.
But…we could and we should.
The hospitality and travel industries as well as brick-and-mortar retailers have taken hits they may never recover from. Yet amazing growth exists within our channel. Positive trends that were emerging before the pandemic have only strengthened this year.
The surveys that I have conducted have provided key insights and observations into what’s working and what’s not. The good news? Our channel has showed impressive and consistent growth throughout the year! I started the growth surveys back in March because I felt much of the information being shared about our channel from other sources was inaccurate and discouraging. The surveys have shown that my gut instinct was correct. While other industries stagnated, our channel pushed forward and had important products and opportunities to share throughout this year!
I’m very proud that SUCCESS Partners has served as a beacon of hope and source of inspiration throughout the year. So let me bring you up to date on what we have learned. Working from a growing data set of 80 private domestic direct selling companies with over $50 million in annual revenue, 80 percent of them are showing revenue increases year to date.
Some of these increases are significant! In fact, at least 10 of these companies will double their sales this year. Led by MONAT and Scentsy, both growing over $400 million, we can also predict that 30 companies in the data set will be up over $100 million for the year. This compares to just two meeting this milestone in 2019. Plus, Color Street and Medifast/OPTAVIA have grown over $100 million three years in a row.
Another undeniable sign of growth is the record revenue being achieved by companies that have previously endured downturns. At least 10 companies in the data set had experienced sales declines for one or more years prior to 2020. But each of them have gone through impressive stages of renewal this year to rebound with all-time record revenue.
Our discussions with smaller companies confirm these findings. The growth this year has been nothing short of remarkable, and we forecast that 2020 U.S. direct selling revenue will far surpass the $36 billion record achieved in 2016. I can’t wait to recognize and celebrate this success at the Direct Selling News Global 100 Banquet in May.
Ultimately, what all these numbers show is that direct selling is growing rapidly because we are uniquely positioned to fill three important needs for people everywhere:
• Shopping through e-commerce.
• Earning extra income or replacing lost income.
• Providing a positive and empowering community.
The bottom line? The world has changed. Fundamentally and permanently. We can stand by and watch it continue to happen. Or we can continue to engage and embrace the transformation. We can make it happen—as a channel; as business owners and executives; and as thought leaders—if we bravely accept the new paradigms.
Although the channel has undergone drastic changes in communications and technology recently, these were necessary and long overdue transformations. We have seen a decade’s worth of change in just one year, primarily led by communications, mobile technologies and the continued dominance of digital. Prior to 2020, domestic direct selling revenue had declined in each of the three previous years. People weren’t going to the mall to shop, but they weren’t necessarily going to in-home parties either. The global pandemic just amplified these trends.
We have become an Amazon nation. We want it all. We want it right now. And we want it delivered to our front door. Amazon did over $200 billion in North America this year. They control more than 50 percent of U.S. online retail sales. Amazon itself is five times bigger than direct selling in North America.
Think about that for a minute. How does direct selling compete? What do we have to offer to differentiate ourselves? What can we change? And how do we change it? I’ve identified three key themes that are driving growth and creating opportunities for the most progressive companies in our channel:
• Sharing our products and opportunity in new ways.
• Embracing the digital transformation.
• Providing a positive sense of community.
The New Approach: Sharing, Not Selling
As a channel, we offer hope to our distributors and customers. Hope for better health. Hope for independence. Hope for better finances. And—ultimately—hope for a better, brighter future. But offering this hope requires change on our part.
Important changes are happening in both customer acquisition and distributor recruiting. The fastest growing companies have rethought how they approach both, and there are important takeaways for each of us. The channel as a whole continues to move away from the more hard-sell, high-pressure approach we’re historically known for and, in its place, has adopted a more natural method of sharing in a low-key, less-obtrusive way.
First, let’s talk about sharing our products. Without a doubt, the growth our channel currently enjoys is being driven by greater customer acquisition and retention. This is nothing new to anyone working in the channel. I’ve been talking about the importance of becoming more customer focused for over a decade. This isn’t a temporary trend. This is a reflection of the new reality we are all living in. Globally, shopping from home is growing exponentially.
As a result, “buying and trying” digitally has become the new normal. But consumers still actively seek out product recommendations from people they know. This is where direct selling shines. Social sharing is already a cornerstone of direct selling. Sharing videos online has become one of the most successful marketing strategies ever. And its popularity has exploded this year. Through platforms like Facebook Live and Instagram, we are providing an online experience that still feels personal—something big box online retailers often struggle to do.
The most successful companies are defined by their products. As we continue to evolve, our industry is becoming synonymous with unique products that can’t be found anywhere else. And when companies create products people love and are loyal to, the customer base (and ultimately the distributor base) naturally grows.
It’s one of the rare times in business when doing the “right” thing has also been proven to be the “right” strategy. Allowing skeptical or curious consumers to try before they buy is an important step in the conversation. Our competitive advantage has always been sharing products we love with people we love. Sampling our products will continue to be a key driver to customer and distributor gains. Mobile technology makes it a simple, frictionless process.
It’s time that we, as a channel, move toward a more sustainable business based on customer acquisition and product sales. Sampling is a simple, focused and natural way to get new customers. Companies leading the charge on this front include It Works!, Elepreneurs, MONAT, Plexus, HempWorx, Revital U and Total Life Changes. I’m excited to share that our clients have distributed more than 2 million samples and acquired millions of customers as a result during 2020!
Sixteen years ago I started Direct Selling News, and the team has been doing an amazing job reporting on and educating our channel ever since. We’ve worked hard to become the most trusted and valuable resource in all of direct selling, and we have exciting plans in place for next year, which I look forward to sharing with you soon.
I recently asked the team at DSN to create a recognition program that highlights, acknowledges and celebrates companies that are focused on building a strong customer base. The result is the DSN “Customer Centric Recognition Program.” This program recognizes qualifying companies that accomplish higher customer-to-distributor ratios by prioritizing product sales. We have two tiers of recognition:
• Gold companies have a 5-to-1 to 10-to-1
• Platinum companies have a ratio of
Gold companies include MONAT, Neora, Perfectly Posh and Total Life Changes.
Platinum companies are ACN, BHIP Global, It Works!, Kynect, Le-Vel, LuLaRoe, Nu Skin and Scentsy.
I’d like to take this opportunity to congratulate these early recipients. This is a truly positive recognition opportunity for everyone. You can find more information at directsellingnews.com/CCR. We invite each of you to submit an application or work toward achieving these important standards.
Our channel has an immediate opportunity to become more mainstream if we can continue to tell our story of powerful, exclusive products and a part-time, flexible opportunity. If we really focus on sharing this simple, valuable, much needed and timely message in a compelling way, both our customer and distributor bases will continue to grow.
We all know why customer centricity is so important for the channel’s sustainable growth. Becoming more focused on product sales and a part-time opportunity also helps us address the elephant in the room. The Federal Trade Commission targets direct selling companies that they feel generate too much revenue from recruitment rather than retail sales. As a channel, we want regulators, critics, industry watchdogs, reporters and the general public to recognize the tremendous shift that continues in our channel.
Everyone benefits when we focus on customer acquisition and product sales by:
• Removing some regulatory concerns.
• Enhancing the channel’s reputation.
• Attracting loyal customers.
• Allowing distributors to organically convert those customers to partners.
On the recruiting front, there are also massive shifts taking place. Wherever your new team members come from; whatever they look like; and whatever you call them, converting happy customers to successful partners is the ultimate key to a better future for your company and our channel.
What can traditionally be described as recruiting is being repackaged to reflect the current trend toward social sharing. It’s important to note that this is more than just a shift in semantics. Organically sharing the opportunity with satisfied customers who already like the products and respect the company is far more pragmatic.
Everything is getting easier. The industry is reducing barriers to join and lowering the costs to get started. Compensation plans are being revisited. Companies are creating lower entry points and lower qualifications for key early rewards and incentives. Faster rewards and earlier recognition opportunities create belief and faster buy-in. Companies are also improving the onboarding process by utilizing app technology for communications, training videos, a better back office experience and a much more strategic method of sharing. These are all examples of a permanent shift in corporate philosophies—not a temporary trend. Of course, this customer-first, opportunity-second shift can be more difficult for older, legacy companies to navigate—but this is a transition that we all must make. Don’t give up!
The Digital Revolution
We all know that fundamental changes in philosophy and execution don’t happen without challenges. And ideas are worthless without successful execution. Embracing change requires patience and persistence first and foremost, but the right processes, the right systems and the right tools are also essential.
I recently read the book Digital Transformation by Silicon Valley entrepreneur Tom Siebel where he explains how four disruptive technologies—cloud computing, big data, the internet of things and artificial intelligence—have radically changed the way businesses compete. Siebel shares how technology makes it possible to personalize and analyze everything! Voice recognition, communications and mobile technologies will only continue to grow in importance. Failing to adapt to these shifts can lead a company to become obsolete. In fact, 52 percent of Fortune 500 companies from 2000 have since been acquired or have gone out of business. Why? They failed to make necessary changes and innovate.
As CEOs and executives, we must first understand and accept the change and then embrace and engage the digital transformation. That means creating sharing and 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 focused sharing and selling systems becomes more important. The best tools are easy to navigate for the distributor, the prospect and the end consumer.
Don’t underestimate the importance of creating a world-class digital customer experience. It simplifies product education; allows for more personalized and relevant product recommendations; and makes every touch point in the process more meaningful. We must provide a simple, fresh and adaptive approach. Today’s most empowered distributors operate digitally, connecting with prospects on social media and sending videos and content as well as samples through mobile apps. Our most successful distributors and consultants have fully transitioned from work from home to work from phone!
The smartphone has become and will continue to thrive as the ultimate business building tool. We live on our phones. Our businesses need to operate the same way. The right tools can make this even easier for this new generation of phone-preneurs.
The industry-leading NOW app from SUCCESS Partners offers best-in-class CRM, a social selling suite, automated sampling, live video commerce, communication tools, onboarding, training and much, much more. To regain and then retain our relevance in the new economy, we must empower our distributors to work from anywhere. It’s a pivot each of us must make. Every aspect of your company’s business—communications, shareable content, sampling, prospecting, recruiting, onboarding, training, recognition—must be easily and instantly accessible from your app.
No matter how big or small you are. No matter how old or young your field is. No exceptions. No excuses.
The opportunities available through mobile technology are limitless. Our biggest and best clients at SUCCESS Partners are thriving by utilizing this technology. Companies like Total Life Changes, HempWorx, Plexus, New U Life and It Works!—just to name a few—are growing with our NOW app platform, with many more coming soon! And we have more game-changing innovation coming to our platform next year that you’re really going to love.
Another important change in our digital transformation is the increase in companies being more virtual, not just temporarily as a result of the pandemic, but as the new normal going forward. Companies like eXp Realty have been operating in a cloud-based environment right from the start—it’s baked into their DNA. Founder and CEO Glenn Sanford and his teams at eXp Realty and VirBELA have done a magnificent job building a multibillion-dollar real estate brokerage company using their exciting virtual world technology.
But change has been a scary proposition for many direct sellers who thrive on face-to-face interactions as a key component of their culture. It’s the reason many of us were caught flat-footed when our corporate staffs had to shift to working from home. This was a radical shift we didn’t have the time to plan for—but it has also created important opportunities. The current climate has shown the importance of creating an effective work-from-home and work-from-phone environment by supplying the tools, technology and training that allows our best team members to thrive wherever they work from.
We all understand that events still play a vital role in our culture in spite of the challenges and health concerns the pandemic has created. Many of your companies have hosted successful virtual events attended by 5, 10, 25, 50,000 or more. These numbers illustrate that virtual events are a viable alternative during the pandemic and will be going forward as well. They have proven to be very efficient and have actually increased attendance and engagement. We know in-person events will return but they will never be quite the same. Going forward, events will absolutely be a mix of virtual and live elements.
Creating Community and Connection
While we feel the increased importance of being customer first and embracing digital transformation are two of the biggest factors impacting our channel’s growth, the third factor is the unique way our channel creates a sense of community, belonging and purpose in an environment of hope, optimism and support. And how important that focus is to our channel’s appeal.
We all know how much emphasis we place on helping everyone become the best version of themselves; on celebrating and recognizing achievements and milestones; on offering generous and compelling rewards at every stage of the journey; on creating a fun, energized and positive environment. There is simply no other industry like ours. And in these times of chaos and isolation, people are starved for connection; eager for personal growth; and motivated to change. When the world is filled with negativity, pessimism and confusion, the appeal of a likeminded positive community and personal growth cannot be denied.
We must invest and engage in first personally getting better and then helping others to get better every day. And we must try to leave everyone we reach better than we found them! This is the foundation of our channel—we all know the we have always been fundamentally in the people business.
Growing Forward with SUCCESS Partners
I don’t know of any other channel that shares and cares as much as direct selling. SUCCESS Partners has enjoyed over 30 years of collaboration and innovation in the industry. We enjoy our partnerships with many of you and hope we can be of valuable service to all of you GROWING forward.
I’ll leave you with a few parting thoughts on the inevitability and importance of change. 2020 has been a year full of global challenges and transformation. The overwhelming changes have taken a toll on so many of us and on our teams. But there are always glimmers of light in moments of darkness. Our channel is strong. Our future is bright. And our opportunities are immediate. As my mentor Jim Rohn famously said, “For things to change, we have to change.” This has never been more true than right now.
If we are brave enough and move fast enough to embrace the changes around us and adapt them to the benefit of our unique channel, we can continue to offer hope and opportunity to millions. I know I’ve said it a thousand times this year—I feel truly blessed and grateful because each day I have the opportunity to serve an incredible group of passionate people, in a vibrant, amazing and important industry. Thank you!