Kerry Tassopoulos, Guest Contributor
During 2021, the challenges to direct sellers were frequent and intense: the COVID-19 pandemic, the Great Resignation, the Federal Trade Commission’s (FTC) actions, continued criticism from academics and the media. Now that 2022 is in full swing, it is time for direct selling companies to regroup and decide what action they can take to exercise more control over their business and reputation.
No Escaping Legislative Impacts
To focus on the opportunities and threats, one area of opportunity is a company’s relationship with elected officials. Whether they like it or not, every direct selling company is impacted by the laws and regulations enacted in Washington, D.C., and state capitals across the United States.
The list of issues is endless—independent contractor status, pyramid scheme legislation, regulations on product ingredients, import/export challenges, tax issues, etc. But by being more engaged when dealing with government officials and applying the same principles of successful business, direct sellers can achieve better outcomes for their companies and their distributors.
The Warm Market
First, they may need to determine who they know—their “warm market.” Have executives met their local community’s mayor, city council member, state representative, governor, congressman, or senator? If not, it may be beneficial to conduct an informal survey of employees to see who has and further identify who on the team has a professional or personal connection with an elected official.
Survey Local Representation
Also, direct sellers may consider conducting a salesforce “who do you know” survey to identify key connections with elected officials. The time-tested adage,“all politics is local,” still rings true. Knowing who represents businesses at the state capital or in Washington, D.C., is a key step to success. Identifying and building contacts, or even friends, before they’re needed is beneficial for all.
Stay Current on Issues
Next, company executives can look at understanding the issues—this is “evaluating the opportunity.” Whether they are interested in government or not, knowing what laws and regulations affect their business is critical. They need to take time to learn what is happening on the legal and regulatory front and rely on third parties (such as company lawyers, accountants, business advisors) to be their “eyes and ears” and update them on current issues as well as future initiatives, which will impact the company, the sales force, and products and services.
Share the Company Story
Finally, companies must tell their story—this is the “selling opportunity.” Executives should contact their elected official and schedule a meeting with them or their staff. Just as a company tells its story to its salesforce, prospective distributors, vendors, and the media, it should be shared with elected officials too. They represent individual constituents, but also businesses, so they want to know about direct sellers’ successes and the challenges they face.
Companies can set up a meeting or tour of their corporate office, manufacturing or distribution center, or at a salesforce event. Photos of these meetings and tours are great reminders for the corporate team as well as the lawmaker’s constituents, and they serve as valuable storytelling tools for distributors.
Additionally, charitable activities are important to share with the legislators. They understand the value of “doing well by doing good” and often use that example of a company’s good work to share with other constituents.
It’s a great idea to schedule regular engagement with elected officials. A powerful aspect of the direct selling channel is relationship building, which takes time and effort. The same approach should be used with elected officials, especially when sharing a direct seller’s latest ideas and information with them. Facts about a company, such as number of employees and independent distributors in the elected official’s district, types of products or services, countries of operation, etc. are very useful. This data resonates with legislators and their staff, confirming economic strength and viability.
Embrace Orgs and Events
Another way to “meet and greet” is through business organizations, such as trade associations or chambers of commerce, which often host programs and events where state and federal elected officials speak. It’s beneficial for direct selling executives to attend or have key staff attend to hear directly from lawmakers. Often, these events are free or low cost and provide excellent opportunities to obtain insights from the lawmakers.
How can direct sellers keep track of all these activities? Companies can start by creating a “government outreach” calendar to plan how executives and colleagues will proactively engage with elected officials. They can choose one topic or opportunity per month to proactively share a company’s story, in person, or in writing. Direct sellers can work with their team to choose and focus on key issues or topics and share this information with key outsiders.
Engage on a Regular Basis
The goal of this calendar is to engage proactively with the elected officials and their staff throughout the entire year, so they will learn about company successes. They also will see company executives and team members as expert resources should they need to make contact over an issue. In addition, the lawmaker and staff will now have a positive impression of that direct seller. This will create goodwill, which is valuable in offsetting unfounded or negative comments about executives and the business.
The continued use and evolution of technology is affecting every aspect of business, including engagement with elected officials. Increased use of technology to track proposed legislation and regulations can help direct selling legal and compliance teams stay informed about what is coming; however, the goal of any top executive should be to participate in the earlier discussions and analysis of elected officials.
Risks of Playing It Safe
Is it safer to “stay under the radar” and allow other companies, or a trade association, to protect a business? Perhaps, assuming that business is exactly like everyone else’s. This approach may have sufficed in the past; however, with the constant scrutiny of the direct selling channel, as well as the impact of social media, it is critical that accurate information about each individual company and its products be shared.
Building successful relationships takes time and effort. Building a strong employee team, a thriving independent salesforce, and a successful business relies on constant interaction and engagement with people.
In the same way, if direct selling executives desire a successful, open, and understanding relationship with elected officials, they must devote time, effort, and resources toward the goal. The end goal is to create certainty so businesses understand the rules under which they will operate.
Regular engagement with elected officials can increase the likelihood of regulatory certainty and may decrease the likelihood of unwarranted and damaging laws and regulations for the direct selling channel.
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