What This Blog Is About

What This Blog Is About

Most web sites and blogs about Direct Sales / Network Marketing / MLM focus overwhelmingly on the negative - what's wrong with it, bad experiences, scams, etc. This blog is different. While we discuss the Three Fatal Flaws and other problems with current industry practices, our focus is on positive and pragmatic SOLUTIONS.

Our Vision: To reform and transform this noble and time-tested industry into a positive force for good that powerfully and effectively serves and supports the best and highest good of people, community and planet.

Tuesday, April 11, 2017

Industry Trends and Direct Sales - Are We Becoming Obsolete?

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Recently I participated in a lively discussion on Facebook. The thread began with a post about Walmart's effect on sales tax revenue in communities where they are located, then shifted to the general impact of big-box and online retailers on locally-owned small businesses (not positive).

One of the participants brought up two good points:
  • Low prices benefit consumers, especially lower income people
  • Major shifts in the retail industry have been going on for years
I countered by asking about the cost of those low prices - the loss of jobs and wealth creation in local communities - then expressed my concerns with the increasing concentration of power and wealth when a few giant corporations become the sole source of most consumer goods people buy.

Here are several articles about the detrimental effects of Walmart, Amazon and retail industry concentration:

Obviously big-box stores and Amazon are not going away anytime soon and will continue to take a larger and larger share of the retail market. More and more mom-and-pop stores will close. Retail chains will shutter locations or go out of business. Once-vibrant Main Streets and suburban shopping malls will become ghost towns.

Ever the pragmatist, I believe the best solution for regular people like us, at least for now, is to strike a reasonable balance between (a) shopping at big-box and online and (b) supporting local small businesses in our community whenever possible - including friends and family in Direct Sales. Obviously the playing field is heavily tilted toward the big guys and it takes extra effort to Shop Local and Shop Small...but it can be done.

I worry, though, that the trend toward big-box and online will be overwhelmingly detrimental to locally-owned businesses and those of us in Direct Sales. I'm concerned that we will be left behind or become increasingly viewed as obsolete -- especially if we don't stop the insane focus on recruiting

Perhaps the idea of person-to-person business (democratized commerce) is a quaint idea from the past, no longer relevant in a world increasingly dominated by innovative and constantly-evolving technology?

Yes, we offer unique value to a certain type of customer, but is it enough? Are there enough of those customers to go around? Is it truly sustainable and scalable? Can we compete against technology, one-stop-shopping convenience and those low, low prices? Are we fighting a losing battle over the long run?

What do you think?  

Tuesday, December 27, 2016

Industry Trends - The Growing Threat From Amazon

As Direct Sellers, we are keenly aware of the competition we face from traditional brick-and-mortar discount stores and online retailers. We compete against selection, low price and convenience.

While we don't want to dwell on the competition, it is prudent to understand what we are up against in the marketplace. 

We already know about the impact of Walmart and big-box discount retailers. What we may not know about is the growing threat from Amazon.

Amazon offers a vast selection of products, low prices and free shipping. They want to dominate "the last mile" - the distance between the store and our home, experimenting with drones, instant ordering, one-hour delivery and pick-up centers - greatly increasing their value in terms of sheer convenience. 

In addition, Amazon is quietly working to dominate and control the entire retail market. The threat is so great that the Institute for Local Self-Reliance (ILSR) published an alarming report on the online retailer, with a warning that this quest for control is "...concentrating power in ways that endanger competition, community life, and democracy."

The report is well worth reading. Download it here: How Amazon’s Tightening Grip on the Economy Is Stifling Competition, Eroding Jobs, and Threatening Communities.

Again, we don't want to dwell on our competition but it's good to understand circumstances and trends that may affect what we do every day as we build our Direct Sales business. 

What are your thoughts about the report and how Amazon's growing dominance will impact the Direct Sales industry?

Tuesday, November 22, 2016

Serving Customers - What We've Learned So Far

Recently our team compiled a list of what we've learned so far about selling to and serving customers. 

These are tips, ideas and best practices from our combined real-world experience in Direct Sales as well as being customers ourselves. Do you recognize the common theme throughout?

It’s all about relationships, the personal touch you don’t get other places, superior customer service, someone to talk to for help.

Younger people will spend money on a product if they like it and if what they want is important to them. Especially beauty products!

Focus on the positives of what we do or sell. Have confidence in what we offer, it will attract people to us. Keep negatives in our back pocket – only bring up if asked.

Go out with attitude of:

I can help you with that problem or need
You (your problem or need) is the reason I started my business

Younger people aren’t very aware of Direct Sales. It’s an opportunity to educate them and focus on what we have to offer that will enhance their lives. (Our services and products - NOT the business opportunity.)

Samples are a great way to introduce our products. Let people try then buy.

Find our niche first, identify our passion – will lead us to our target market.

When you fill a need, people flock to you. Find the need.

Our ideal customers:

People who want the personal touch
People who want quality products
People who are more interested in quality than price

Product knowledge is key. It impacts our credibility if we don’t know off the top of our head. We must know prices, too. Memorize and drill.

Our customers expect more from us. We must provide more. We are held to a higher standard.

Sell passionately. Show the conviction and belief you have in your product. Share your story.

With people we know personally, raising awareness is the best first step. Low pressure. Tell them what we do and who we serve, give them a business card, ask them to contact us if they want to learn more, try or buy, refer someone, etc. 

Cultivate the garden.” Let the business grow organically. Don’t force it.

Ideas for authors to market themselves – applicable to nearly every business.

For the most part, we get into the business to earn money. When we offer a product or service, it is not the same as recommending a movie or book to family and friends. We will make a profit (financial gain) from the sale of our product or service. The products have to be good and worth the cost – then it doesn’t matter if you are making a profit.

Perhaps we need to work on our mindset – we are a business. All businesses make money, some more than others. We deserve to earn a reasonable profit for giving value and service to our clients/customers.

After the sale is made, let customers know we will be checking back with them in a week or two to see if everything is working the way the wanted/expected. Perhaps utilize Constant Contact or other service to check in with customers every month or two.

It’s important to know your customers! Know who wants to be contacted, who wants to be left alone, and HOW to communicate with them. Get buy-in up front.

Make it a relationship along with offering your products or services. Some customers are self-service and others want lots of personal attention. Recognize personal events, birthdays, holidays, things they are involved in, shared interests. Stay in touch and make it a fun, caring experience!

Do you have other ideas you'd like to share?

Wednesday, April 27, 2016

Serving Customers - The Three Essential Elements

As the Direct Sales industry gets back to the basics of serving customers (and through them, our community and the planet), the question arises: How exactly do we serve them? 

More specifically, how do we acquire, serve and retain customers?

Simply "sharing" our products with everyone we know is not enough. Despite what we may be told, our products do NOT sell themselves, and NOT everyone wants to buy what we have to sell. 

In today's world, we must prove that we offer "competitive value" to prospective customers in order for them to change their buying habits and purchase our products and services.

We also need a more thoughtful and structured approach to acquiring, serving and retaining our customers.

Our team's research revealed three essential elements that we must master if we are to successfully develop a large base of customers for our direct sales business - customers who will become loyal, raving fans of who we are and what we offer.

Element #1 - Master the Message

What we say and who we say it to; clearly and concisely define and describe

  • Who we serve 
  • How we serve them
  • Why we serve them
  • What our customers need and want
  • What our customers get out of their relationship with us

The goal is to define our product and service offerings, target market, customer categories, added-value services and other details; also to create an answer for the all-important question "What do you do?" - without hype, jargon and sales talk - that sparks interest in those we are meant to serve.

Key question: How do we compellingly communicate the nature, value and benefits of what we have to offer?

Element #2 - Master the Method

What we do and how we do it; the specific steps we take to prospect, sell and serve:

  • System - How we do it
  • Simple Solutions - What we offer
  • Support - How we keep helping 

The goal is to create a consistent process of prospect, serve and follow-up - simple steps we can do every day to organically build a solid customer base over time.

Key question: How do we create a meaningful and memorable customer experience that's caring, educational and fun - before, during and after the sale?

Element #3 - Master the Marketing

Developing an awareness of our products and services in the marketplace:

  • How we spread the word
  • How we build a community
  • How we launch a movement/cause/crusade

Key question: How do we tell the world about who we are and what we have to offer?

The three essential elements form a framework upon which to create a menu of best practices that we can draw from to cultivate a large base of customers for our business - customers who will become loyal, raving fans of who we are and what we have to offer.

This part of the Simple Solutions Project is where the rubber meets the road -- the exciting place in our journey where we uncover the specific ways in which we build a solid customer-centered Direct Sales business. 

We will explore each element in depth in future blog posts.

Friday, March 11, 2016

Local Distribution Center (LDC) - An Idea Whose Time Has Come Again?

In the 1980's a direct sales company, Yurika Foods, introduced the concept of a "Local Distribution Center" or LDC. A distributor would dedicate space in their home, or rent a storefront, stocking the company's products for customers and distributors within driving distance to purchase for themselves and their families. The centers also served as venues for product demonstration, customer education, distributor training, networking and related business events.

Granted, those were the days before the Internet, fax machines and online commerce, but perhaps LDCs are an idea whose time has come again.

As energy costs continue to rise, so will the cost of shipping. As we discussed in Snack Bar Sticker Shock, shipping and handling (S&H) fees add a lot to orders, especially smaller ones. Retail stores are more competitive because they don't charge S&H fees. Customers may think twice about buying from us when S&H adds $10 or $15 to the cost of each order.

In populated areas it may make sense to have an LDC for customers and other distributors to walk in and purchase their products. The company would support the distributor who takes on the cost and risk of stocking the LDC by offering free shipping for bulk purchases, provide guidance on which products are most frequently ordered by customers and distributors in the area, simple order tracking and volume transfer software, etc. 

An LDC could be much more than a local "company store." Distributors can meet customers in person and get to know and serve them better. The LDC could become a community hub for demonstrations, training, networking, classes and other types of activities that make sense for the customers, distributors and company. 

The LDC concept fits in perfectly with causes such as Buy LocalShop Small and the Sharing Economy. It also allows the distributor to build relationships and raise awareness of the direct sales company and products to people in the area.

Despite technology drastically shortening the time of online ordering and home delivery, it still costs money. People crave real human interaction, and an LDC enhances the people-helping-people, human touch advantage of our industry because there is someone to talk to, ask questions and have fun working with.

Our industry is all about bringing people together in relationship and community. Perhaps LDCs are an idea whose time has come again?

Snack Bar Sticker Shock

Recently I ordered a supply of my company's healthy snack bars. After adding sales tax, shipping and handling fees, the total came to almost $150. 

I paused before clicking "submit order". On one hand, my family enjoys the snack bars and they are tasty, natural and organic. As a distributor, I get to buy the products at wholesale and the sale would count toward my monthly performance bonus. On the other hand, $150 just for snack bars, even if they last two or three months? I reluctantly clicked "Cancel."

There is a perception that our industry's products are over-priced. In many cases I agree.

Retail stores sell a wide variety of quality, eco-friendly, natural and healthy products and a savvy shopper can purchase these products on sale and save quite a bit of money. In my case with an equivalent number of snack bars, $50 to $70 for a three-month supply. That's a huge savings. 

We may save money by purchasing products at the store, but buying elsewhere doesn't grow our business. If Direct Sales companies want to sell more products and expand the number of customers served, they must improve the ways in which they price, position and market their products. Here are some ideas:

1. Be aware that in these tough economic times, people want to stretch their dollars as much as possible. Some are willing to pay more for exceptional quality, added value and to support their friends and family, but there is a limit to how much more they will pay for products they could also buy at their local grocery or big-box store for less.

2. Shipping and handling (S&H) fees add a lot to small orders. Consider reduced shipping for small orders or some type of free shipping membership coupon program, like Jameco Electronics' Free Shipping Club. Customers may think twice about buying from us when S&H adds $10 or $15 to the cost of each order. Not every customer wants to purchase a large amount of products and we should not penalize them because they may become bigger customers later or refer other customers to us. (Customers are the cornerstone of our business. Honor them.)

3. Set up a Preferred Customer incentive program. Run specials on selected products every month. With each purchase, customers earn a dollar value credit toward their next purchase. Several companies of which I'm a customer do this already, and it helps offset the cost of the product and shipping so I tend to buy more frequently and feel better about doing so. 

4. Fairly price the products. We don't want to target the mass market and compete with the huge discount retailers (a losing battle). Neither should we price our products so only the wealthy can afford them (too small of a market). Because our products are generally of higher perceived value and quality, set the price in the "middle" to "middle-high" range in line with comparable products offered in stores. Make it easy for average people to replace products they currently purchase at the store with higher-quality, yet comparably priced, products from direct sales companies (gain market share).

5. Offer two or three tiers of products so customers have a selection of "good, better, best" depending on the product, purpose, ingredients and level of quality. For example, my company sells a top-level, premium supplement brand with a daily per-use cost of about $2.50. They also sell a high-quality multi-vitamin with a per-use cost of $.20 (20 cents). They could create a third tier in the middle, and target each product for specific types of customers within those tiers.

6. Create a reasonable variety and mix of products, striking a good balance between too few and too many choices. A company focused on home care can offer additional key products that complement the core product line, like sponges, cloths and other essentials. The complementary products can also support added-value services provided by distributors. (Anything to reduce the dependence upon or temptation to buy competing products at the store will only help.)

7. Don't change products so often. Customers get used to a particular product, then suddenly it's no longer offered or replaced by something else. Strike a balance between refreshing product lines and the fact that people are resistant to change, especially if they love what a product does for them and without warning it's repackaged, reformulated, no longer available or doesn't work the same way as before. If changes must be made, be sure to notify distributors in advance so they can proactively inform their customers and find alternatives.

If Direct Sales companies truly want to succeed in the marketplace, they must improve how they price, position and market their products. Only then can distributors make a rock-solid case for offering "competitive value" to prospective customers - and make lots more sales.

Thursday, February 18, 2016

Why Direct Sales Is Relevant And Valuable In Today's World

In our previous blog post, Why Would Anyone Buy What We Have To Sell, we briefly explored some of the challenges that we face in getting people to buy from us instead of the competition. This post focuses on the Direct Sales industry itself and why we believe it remains valuable and relevant today.

Our competition (retail stores and online web sites) provides consumers with a vast selection of services and products, low prices and convenience. Evolving technology is making it easier for consumers to buy, automatically reorder frequently-used products and receive their purchases on their doorstep in as little as an hour.

Consumers are accustomed to buying from stores and online, conditioned to seek out the lowest price and rely on recognized, national brands they see on TV. There is a perception that products offered by Direct Sales companies are "nothing special and overpriced" (more about that in another post), and that the Direct Sales business model itself is old-fashioned and obsolete because of technology and the Internet. Our industry's negative stigma doesn't help, either. 

Given these challenges, can direct sellers compete? Are we even relevant in today's highly competitive and rapidly-changing world?

The answer is YES.

To get people to change their buying habits and buy from us, there must be a very strong and compelling reason to do so. Our industry must prove that it offers unique, competitive value that the competition either cannot provide or cannot provide very well. 

We must also be clear about the type of customer that we are best designed to serve...despite what we may be told, our products do not sell themselves and not everyone wants to buy what we have to sell.

Direct Sales, which we defined before as person-to-person business, is traditionally described as "the direct personal presentation, demonstration, and sale of products and services to consumers, usually in their homes or at their jobs."

According to the World Federation of Direct Selling Associations (WFDSA), "...consumers benefit from direct selling because of the convenience and service it provides, including personal demonstration and explanation of products, home delivery, and generous satisfaction guarantees."

WFDSA's list of benefits are good, although one could argue that our competitors provide as good or better convenience in terms of product selection, ways to buy and faster home delivery. The other benefits, however, are very advantageous for Direct Sales; as one of our project team members recently said, "What we offer is service and guarantees and knowledge. We cannot forget that." 

It's true that our customers gain many benefits from doing business with us:
  • Safe, effective, quality products with full disclosure about what they contain and where they are made
  • Knowledgeable guidance to find the right service or product to solve problems and meet needs
  • A positive, caring, educational and fun personalized buying experience before, during and after the sale
  • Flexible choices for purchase and delivery, from self-service to full-service
  • A real person to call for help and to answer questions
  • Generous satisfaction/return guarantees

But there's more. Our industry features an exceptional advantage, unmatched by the competition, that is truly special and unique: At it's core, Direct Sales is about People Helping People. 

Stores and web sites may offer excellent, healthy products, ideas, information, support and other perks for their customers. However, only Direct Sales truly provides the human touch. As Robert Kiyosaki says

"It's a HUMANE way of doing business...heart to heart, soul to soul, business to business - let's help each other out."

Unlike giant retail corporations focused solely on profit margins and enhancing shareholder value, Direct Sales is about empowering average people like you and me to serve and add value to others. It's about more than commerce. It's about friendship, relationship, joy and community.

In fact, our industry's Unique Value Proposition (UVP) could be defined as Direct Sales - Business With The Human Touch. 

Our ideal customers, the ones we are best designed to serve, are special and unique, too. 

They value community and relationship. They want personalized service and a real person to talk to when they need help. They prefer to do business face-to-face, with someone they know, like and trust. They want quality products that are good for them, good for their family and good for the planet. They want to make a difference for others and contribute to causes greater than themselves. They have specific goals to achieve, problems to solve, needs to be met. They are passionate, awesome people.

Direct Sales is the perfect vehicle to serve these customers - and the reason why our industry continues to be relevant and valuable in today's world. (The specific ways in which we serve our customers will be covered in future blog posts.)

"Just because we live in over-sized houses in gated communities, with food [and other products] delivered on demand, doesn't make us immune to needing one another." -It's a Shareable Life

When we support person-to-person business, we bring relationship and community to us. No other industry can match Direct Sales' ability to empower average people at the grass-roots level to serve customers who value the human touch -- while contributing to the overall health and well-being of people, community and planet.