Embracing direct selling as a channel of distribution provides us with great freedom
Brett Duncan is a managing principal at consulting firm Strategic Choice Partners.
Being driven by what people can sell versus what people will buy may sound similar, but they’re actually very different concepts.
Direct selling is changing. We’re in the middle of a shift from point A to point B. We may not be exactly clear on what point B is, but we definitely know that point A is in the rearview mirror.
The three transitions below encompass the most important areas for a direct selling company to address as quickly as possible. These aren’t meant to be new concepts, but rather a cheat sheet for your next team meeting. Gather a group together and document what you’re doing to address these three transitions, and then see if you like the answers.
No. 1. Opportunity-Centric to Channel of Distribution
For years, we’ve touted direct selling as a great go-to-market strategy. It’s attracted many “outsiders” in recent history for that very reason. And yet, if you call direct selling a “channel of distribution” in some circles, you’ll be tried for heresy and then tarred and feathered in the public square.
Those that struggle most with this idea of a channel of distribution also think direct selling’s primary product is opportunity. If you think direct selling is first and foremost about providing opportunity, that’s going to impact the decisions you make in a very different way than if you see it primarily as a channel of distribution for a great product. Put another way, being driven by what people can sell versus what people will buy may sound similar, but they’re actually very different concepts. As direct sellers, we often find ourselves balancing these two worlds.
Today’s regulatory environment and marketplace preferences make it clear that we must embrace direct selling as a channel of distribution more than ever. I think there’s a certain amount of freedom that comes with this realization. And when we do embrace it, we will find clearer paths to take, and prioritize certain areas that may not have been at the top of our list before.
The good news is that it’s also the best thing for those focused on opportunity. Ultimately, those looking for a business are looking for a product or service that the market wants and that is unique. It’s the sharing of these products, services, brands and ideas that make the opportunity possible.
No. 2. Distributor Acquisition to Customer Acquisition
Traditionally, the corporate office has relied on its distributors to find the customers. In many ways, that was the essence of the entire model. The corporate office makes products, ships them out and mails checks. Distributors handle spreading the word, and at the time, everyone liked it that way.
Those days are gone, for a few reasons. First, e-commerce makes direct contact between the customer and the company unavoidable. Second, the ability to leverage the many different online tools requires the corporate office to be much more involved. Third, today’s distributor expects the corporate office to drive the customer acquisition process.
We’re faced with completely redefining the roles of distributor and corporate office beyond making and shipping products, and mailing checks.
The investment in skills, resources and budget to handle customer acquisition can be overwhelming for any company still using yesterday’s structure to handle today’s needs. How can a new approach be paid for?
No. 3. Complex Compensation Plans to Simple Plans
Compensation plan design still enormously impacts the success of a direct selling company, but not in the same way it used to. Before, the bells and whistles and potential payout was what attracted people to the business. Now, it’s critical the plan doesn’t rob the budget of the capital and cash flow needed for the business to actually be a relevant operation.
As we shift the focus to being a channel of distribution, as well as a customer-acquisition machine, it’s obvious we must also shift our thinking about compensation plans. Earning potential isn’t the most important factor anymore; simplicity and inclusiveness have replaced it.
The regulatory environment may help accelerate these decisions, but that’s not really driving the shift. The typical distributor looking for a way to earn an extra $200-$500 a month is looking for the easiest way to do it, not the richest.
While we’re busy comparing the payouts at each level among companies, we’re overlooking affiliate marketing. This is where we can actually stand head and shoulders above the other players, and still adjust our plans to do the marketing that today’s distributor is expecting. They’ve shown us what simple compensation can look like. What are we doing about it?
Link to share this article: https://socialsellingnews.com/link/3-fundamental-transitions-for-direct-selling-5672/