Unlocking the younger demographics by re-thinking traditional practices
“…We have to understand the mindset of the upcoming generations.” —Tami VanHoy, Head Executive over Field Development and Customer Support, pawTree
Attracting Millennials (and now Gen Z) has been top of mind for direct selling executives since the early 2000s, when the demographic began reaching adulthood. In the beginning, it was partly because Millennials were an even larger population than the Baby Boomers. And as those Boomers began aging out of the field—or at the very least, slowing down activity—the goal seemed more urgent.
The key to successfully attracting large numbers of these demographics may be removing the padlock most seasoned direct selling executives have previously advocated.
Marketing experts agree: These up-and-coming generations are more value-driven and consider it important that the company’s mission and values align with their own. But simply having a charitable foundation that “gives back” isn’t drawing consistently substantial numbers of younger new consultants interested in creating at least part-time income.
Re-thinking How a Millennial & Gen Z Field Is Influenced
An acknowledged core principle of growing direct selling companies is having a “s/hero” on the corporate team, usually a founder or key executive with the field experience of growing a large sales organization. The field connects with the s/hero’s story, identifies with their struggle and believes in their ability to, in conjunction with their upline, guide them to success.
“I really believe that’s a principle that has gotten this channel where it is today,” says Tami VanHoy, currently the head executive over field development and customer support at pawTree and former founder and CEO of Homemade Gourmet. “But I think we have to recognize that the generations coming up don’t trust ‘corporate.’ They are looking for Influencers that they relate to and trust, and trust what those Influencers are saying about a brand.
“So do I feel like the need for a (s/hero) has disappeared? Absolutely not, but I don’t think it plays as powerful of a role in the future growth of the direct selling channel. I think it has a place, but we have to understand the mindset of the upcoming generations,” VanHoy says.
Kristina Kajic, co-founder and CEO of Bella Grace Global, agrees that Influencers are key to growth and scaling in today’s market. “The direction the world is heading is focused on Influencers because they are all about social selling: So I think that the future of the direct selling channel is the Influencer model. I believe it so firmly that it’s how we essentially structured the Bella Grace business model.”
Part of Kajic’s belief stems from the way Influencer thinking has evolved over the past several years. “Even just five years ago, certain Influencers would accept any gigs for a paycheck. Now, they’ve grown—particularly in the area of self-esteem and understanding their value—and are willing to say, ‘I don’t align with your product, so (representing your brand) is not something that I’m willing to do.’
“So I think that the 30-day contracts are on their way out, and I think the network marketing model, the business model where they can create income that allows them to enjoy longer-term benefits from the influence they have, is on the rise.”
Her opinion is supported by several facts. First is that, unlike the first iteration of social media influence by popular bloggers, fewer of today’s Influencers are accepting products as compensation. According to Influencer Marketing Hub, 42% of brands are offering paychecks to their Influencers. Brands are also diminishing the number of quarterly contracts and instead offering the shorter monthly term contracts.
“Micro- and macro-Influencers are on the rise, as they are now recognizing that social media is not just a celebrity-based platform,” Kajic says.
“It’s an everybody-based platform, and people are noticing ‘Regardless of my following, I can create a business and income with it.’ They’re becoming more ‘woke’ that ‘Social media can be my business, and this is something that I can do regardless if I have never done it before, even if I’m not a high-end celebrity with a million followers because I do it on a daily basis anyway.’
“I think the micro-Influencers are recognizing that ‘I post on a daily basis the vacation I’m taking, the food I’m eating, and the products I’m consuming, and I’m not getting paid off of it—but I can,’ ” Kajic says. “For the direct selling channel, the good news is that Millennials and Gen Z see this Influencer model daily and are open to learning how they can engage with it.”
All Affiliates Are Influencers; Not All Influencers Are Affiliates
Another trend Influencer Marketing Hub noted is the change from brands paying a flat rate to paying a percentage of sales. Percentage-based commissions are the standard for Influencers who are paid as an Affiliate—where they receive a commission for sales their influence generated, usually through a coupon code or link. Affiliate marketing is undertaken to directly increase sales so every sale is tracked, and the Affiliate Influencer is paid based on their direct influence on revenue generated.
Influencer marketing may have other goals, including building awareness or increasing user-generated content (UGC). According to Influencer Marketing Hub’s research, the goal of increasing UGC climbed from 32% in 2022 to 45% so far in 2023.
While some executive teams are debating whether or not to offer Affiliate programs, the reality is that they are already paying through one to any consultant who is selling products but not recruiting a downline. Keeping those sellers growing long-term requires a commission that makes it worth their while, and therefore requires a multiplier that supports those commissions.
Exclusivity vs Authenticity
Affiliates and Influencers also seem to be behind the shift in how Millennials and Gen Z—and to some extent, Gen X—determine whether an opportunity is for them or not.
“If I’m a gigger I’m going to have to believe in the message of the company, the purpose of the company, the mission of the company, and absolutely believe in the product for me to sell it,” VanHoy says.
“Having a founder who is relatable, that’s great, but guess what? I’m also looking for companies that will let me sell the way I want to sell, and that means I’m not just selling your products in your brand. I’m also selling this other product and this other brand.”
Heather Chastain, founder and CEO of the Bridgehead Collective, shares how this behavior goes against the very nature of many direct selling companies. She says, “The idea that direct selling companies would be open to—much less encourage—Distributors to represent multiple brands is contrary to what many of us have believed. I have used the ‘can’t ride two horses with one rear-end’ analogy from stage many times.
“But for Millennials and Gen Z, who value authenticity, advocating one brand and one brand only seems disingenuous,” she adds. “They may love the skin care of one brand and the nutritional shake of another. Being able to share both, regardless of whether those are from two different direct selling companies, is important to them and ultimately more effective.”
Chastain, who recently completed a generational engagement study that focuses on attitudes toward entrepreneurialism in general and direct sales specifically, says that these demographics will simply choose to represent a brand that allows them that authenticity over a company that limits participation with other direct sales companies.
Kajic agrees that allowing new generations to follow their bliss is a plus for everyone. “I don’t think we have the right to say ‘You can only be a distributor with this company.’ With the modern world, you can’t limit people regarding what they can and cannot do. The fashion industry is a great example. There are Influencers who go to every single fashion show, and they monetize the fact that they’re at that show and that they’re wearing those clothes in that moment.
“Let’s say yesterday was Louis Vuitton, and they monetized that yesterday; today, they go to Prada, and they monetize Prada. Tomorrow, they’re going to Chanel, and they’re going to monetize Chanel,” she says. “I think that fashion has ultimately set that standard of you don’t have to represent one brand, you can represent many different brands.”
The caveat, Kajic says, is that success relies on the quality of work behind it. “If you don’t go all out with all three of those companies, you’re short lived regardless of the number of your following, because your following is basically your downline.
“If they recognize that you’re not going all out and you’re really not passionate about the products that you are representing and promoting, they won’t purchase it. And I think that translates to our industry. As long as someone is passionately representing each product, they can be successful.”
VanHoy says the conversation also comes back to these generations seeking freedom from too many rules and steering clear of brands that intentionally limit them.
“So for the Gen Z and Millennials, it’s not just ‘I am making a difference.’ It’s also that there is not an exclusive mindset. They may think, ‘I like your product, I believe in your brand and I even like your founder, but if you’re going to make me be exclusive and have rules that keep me from being able to do other things, then I love you but I’m going to go find a company that will meet me where I am.’
“So as a channel, I think we are trying to figure out where we are,” VanHoy adds. “Are we exclusive? Are we not exclusive? I believe we have to make that transition. Instead of asking the sellers to come to meet us where we are as companies, we have to meet them where they are.”
Chastain agrees and advocates going even further by recognizing these new sellers are championing the abundance mindset that direct selling talks about all of the time. She says, “The more that being non-exclusive is embraced, the easier it is to see that it is the true abundance mindset.
“We speak to our fields about abundance rather than scarcity, and allowing them to pursue all their options is part of that,” she continues.” It makes a powerful statement that we believe in this channel, and we want what is good for them. We’re going to do exciting things, and we want them to be part of it.
“It’s very similar to when a field member would approach me in years past and say they were considering another opportunity. My response, even when I advocated exclusivity, was ‘Tell me about it; because I want what is best for you more than anything else.’ That approach resonated with the field then, and it’s what the younger demographic is looking for in a direct sales company now,” Chastain says.
Show Me the Money
In John Fleming’s book Ultimate Gig, it is recommended that those who are evaluating a gig determine whether it has “a reasonable return on investment of time.”
VanHoy says, “For many, they are looking for a little gig income here, a little gig income there, because they want to have a specific quality of life more than they want to have massive paychecks.
“They want to pay their bills, and they want to be able to pay for their quality of life, but the way they approach it is totally different from the approach of those who want to build an income through a significant organization.”
Chastain’s research was able to determine the desired ranges of incomes for the varying generations, and she said that even she was surprised at the results. “It was fascinating to see that what one generation was looking for, another was likely to regard as a scam.”
VanHoy’s observation focuses on responding to the level of income the consultant expresses a desire for, and helping them meet their goal.
“If I was coaching someone who wants to build an organization and create a larger income, I would say to them, ‘You can’t do that with multiple businesses. That’s a gig mentality, and it works for a specific income need. But when you really want to build an organization, you pour all of your energy into it and build that one.”
With younger demographics in this social media-influenced world it all comes down to three things. Offer them a solid opportunity for income, meet their desire for authenticity, and allow them the choice of how much to build with whom.
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