When You Plan for a Crisis – A Crisis is Just Part of the Plan

Having an accomodating plan that is more about being pro-active than reactive and setting the expectation that nothing will go as planned but every change is planned for helps ensure success.

We’ve all stared out the window as falling rain and bolts of lightning dashed our hopes of what was to be that day. Growing up we were always told to have a Plan B. But as event planners, we plan for these variables because with so many people involved and so much at stake – the show must go on.

Event planners, the original pivoters, deal with many things from unpredictable weather making an elegant beach dinner a sandy nightmare to volcanic eruptions that ground flights stranding a keynote speaker in a locale that will require trains, cars and boats endless phone calls to get them to the stage. They happily solve these problems in order to achieve their goal; but 2020 had something different in mind for the world of events and travel, and for us all.

2020 didn’t just remind us that things change – it totally unearthed the fact that the best laid plans are riddled with vulnerability. And also, there is no amount of creative problem solving to effectively change what happens when the world runs headlong into a global pandemic. For most of us, the show didn’t go on in 2020. We were confused, surprised, disappointed and a little scared. In looking ahead to 2021, we had to shift our thinking, and plan inside of a pandemic not in case of one.

In designing our 2021 crisis management plan in late 2020, we were determined to make our events as crisis proof as possible motivated by the disappointment of cancelling our Annual Member’s Conference earlier in the year. Our solution (the plan) was to create three versions of our signature event: a face to face or physical (A), a hybrid of physical and virtual (B) and lastly, a completely virtual (C) and be ready to execute any single version or a combo at any given time knowing we were not through all of the upheaval that COVID-19 continues to cause. Every decision made had to work for all 3 scenarios (A, B and C) and be interchangeable and managed by a small team in a timely manner.

Our decision to hold the conference in Sydney was based on the fact that 70% of our membership resides in NSW. Meaning, that even with borders closing, we would still meet the minimum numbers per our venue contract and be able to hold a hybrid conference – a combination of A and B. This allowed us to pick the venue with the best COVID plan and the room to expand to accommodate all of our delegates even in a 4-square metre restriction and sell tickets that would automatically revert to virtual tickets if a physical event proved impossible.

A state lockdown the week before the conference gave us the opportunity to test the plan, when we lost nearly 15% of our delegates due to a travel ban for Victorians going into effect three days ahead of the conference start date. We were able to swap physical tickets for those banned or uncomfortable traveling to virtual ones within ten minutes of the travel ban announcement. Communications immediately followed allowing no room for confusion, speculation and most importantly, our virtual audience felt considered and valued.

The show was designed in two-hour blocks to ensure that our virtual attendees would feel as much a part of it as possible and in the down time our physical attendees were free to mingle. And as we were incorporating the necessary tech into the mix to allow for a combination of physical and streamed content; we knew going completely virtual was possible as well. This tech also allowed us to approach speakers and presenters from all over the world most of whom were more than happy to participate live from the comfort of their home base while interactively engaging our physical and virtual audience.

One presenter, scheduled to appear live on stage later that morning, woke to find his flight to Sydney cancelled effectively preventing his attendance. One text message and one email later, he was immediately placed into our virtual speaker setup and presented his slot that morning on time and without incident. Planning it in this way meant that for the DSA team there were no surprises, only pre-existing solutions. Our audience was told what happened during the introduction but no one would have known that it wasn’t planned (but it was, in a sense.)

What ultimately held our 2021 conference in good stead was employing a different way of looking at crisis management and keeping our delegates engaged regardless of their location. And in the over eight hours of content presented, only 15 minutes of it was pre-recorded by design, strategically to maintain as much of the live feel as possible. Just over two weeks later Sydney would be plunged into a lockdown that continues still.

Sure, we had some luck but we also had a sound plan and moving forward all events will have the same ABC planning with two dates, the published one and the back up one with all of our participants and presenters aware of and cleared for either.

We have had some great experiences and learnings in this year planning and hosting direct selling events with physical and virtual attendees and presenters. Some include:

• Check all contracts with a new lens
• Negotiate new minimum numbers
• Engage speakers ready for “physical” and “virtual” presenting
• Have crisis comms written and ready to send then it’s not a crisis
• Have back up dates with the venue and key presenters
• Make every decision with A, B and C in mind.

COVID is not done and neither are we. As with every direct selling company in the last 18 months, Direct Selling Australia has become proficient at the pivot, or as we now like to term it, the twirl. We feel like, as I’m sure you do, that we are constantly twirling as we navigate this new way of doing business. And yes, all this twirling sometimes leaves us a bit dizzy; but the plan keeps us anchored and able to move forward.

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It is evident that we are globally going through unprecedented times. Within this, the direct selling industry is facing immense difficulties. That being said, there are things that can and should be done by company management. Below you will find what several prominent figures of the industry have to say on this. Feel free to add your own comments.

“What will be your most important advice to direct selling companies, in times of the global pandemic?” was the question.

Oscar Canio Arias, Managing Director of Direct Selling Europe

“At the time of writing this article, COVID-19 continues to expand. The priority for the industry should continue being safeguarding the lives of our employees, collaborators and customers. Beyond the health implications, together with the contingency plans being currently implemented, companies should be working on a two-steps approach: 1) In the short term, work to return to business as soon as confinements are over; and, 2) Furthermore, prepare your company for a new post COVID-19 scenario, where both policy makers and consumers’ priorities and behaviour will be heavily shifted by the crisis.”

Tamuna Gabilaia, Executive Director and COO of the WFDSA

“In light of the global CoVid19 pandemic WFDSA is supporting the global direct selling industry by planning virtual global networking sessions for the leadership of direct selling associations and companies to enable them to share best practices and strategies designed to overcome the challenges posed to direct sellers by the CoVid19 pandemic. These challenges range from distribution channel disruption to limitations on the traditional person-to-person business model. Equally important will be ways for companies to innovate with digital sales and the opportunity also afforded by direct selling distance selling that has advantages over retail businesses. While WFDSA’s paramount priority continues to be consumer protection and adherence to the highest standards of ethical business practices enshrined in the WFDSA Code of Conduct, WFDSA will also be a leader in convening and facilitating global events and seminars that explore ways to navigate the challenges of the CoVid19 pandemic while also identifying opportunities that can position direct selling in a competitive posture in the changing marketplace as a consequence of the CoVid19 pandemic.”

Vince Han, Founder and CEO of MobileCoach

“COVID-19 is the first pandemic that many have experienced and the accompanying uncertainty, fear and disruption to jobs and life can wreak havoc on one’s well-being. In trying times, people are going to cling to their most meaningful relationships. More than traditional retail brands, direct sellers enjoy a greater sense of kinship between them and their distributors and customers. This is a time to find ways to genuinely come together as a community. Be there for your community in times of trouble and you’ll enjoy the ensuing goodwill and loyalty for years to come.”

Brenton Kugler, Partner at Scheef & Stone, LLP

“In such an uncertain time, it is critically important for companies to focus on the things they can control rather than spend time and energy on the growing number of things that are beyond their control. For sure, this is easier said than done. If corporate staff is working remotely, provide regular communication, preferably via video conference, to keep employees engaged and focused. Maintain regular contact with manufacturers and suppliers so that your company is prepared for supply chain interruptions. It is critical to maintain operating capital and companies and suppliers should determine if they are eligible for benefits available from the COVID-19 stimulus loan programs.  Most importantly, have a plan in place for quickly resuming full-scale business activity once the pandemic finally ends. You don’t want to be slow out of the gate because opportunities will likely be available to the companies that are the quickest to return to full operating capacity.”

Alan Luce, Senior Managing Partner at Strategic Choice Partners

“My most important advice to direct selling companies would be for them to recognize that this event will forever change us as a society. While the pandemic will eventually recede driven back by science and social distancing, some of the social and business practices that societies and nations have adopted will stay with us for generations. For example, most may not remember that the US Social Security program began during the Great Depression of 1929 as a program intended to alleviate the extreme poverty of senior citizens. This crisis and the social boundaries both imposed and self-activated will, in some ways not fully foreseeable at this time, change the way we think about subjects like the role and size of government, universal income assistance, pandemic and other types of catastrophe planning and preparation, health care as a right or an option, safety nets for independent contractors and how to pay for them and, whether direct selling becomes much more virtual on line rather than traditional person to person. Pay attention to what our most effective online sellers and team builders are doing now! Going forward these may become the backbone of direct selling standard operating procedure. This experience is changing us. We just don’t know all the ways it has yet!”

Peter Maddox, President of the Direct Sellers Association of Canada

“There are so many unknowns right now, so giving advice is a fraught exercise. Nevertheless, here are some things for direct selling leaders to consider both during and post COVID-19: • Look after your people and get the payback in the future – relationships developed during tough times can become enduring and powerful, • Don’t forget ongoing compliance requirements – perhaps more than ever, regulators and others are looking for missteps around product claims and earnings, • Search for ways to grow your business and the economy – without appearing predatory, investigate opportunities to sensitively and intelligently promote the direct selling opportunity, • Work together with your industry colleagues – this is an important time for sharing problems, solutions and best practices with your peers.”

Gillian Stapleton, Executive Director of the Australia Direct Selling Association

“When my team in Australia chose our conference theme for 2020 back in 2019, we had no idea how topical it would actually become. ‘Right Here, Right Now’ is how we are all operating these days and things are changing daily, so planning effectively becomes nearly impossible. Make decisions based on what you know today, and know it will change and you will have to make that decision again. Right here Right now, my three-guiding principles in this time of crisis, when there is no rulebook: Back Yourself, Back Your Team and Make Decisions.”

Kevin Thompson, Partner and Co-Founder of Thompson Burton

“Press! I would encourage anyone to fight through this period. If they come out of this lockdown period without a new skill or a new strategy, they did it wrong. This is the perfect time to reconsider patterns of behavior, keeping the good and discarding the bad. In life, it’s always wise to recalibrate your business goals every few months. We get busy and generally fail to dig deep to think through our strategies. Well now that we’re all shut down, there’s no better time than today.”

Daryl Wurzbacher, CEO of ByDesign Technologies

“Stay Positive! Our industry has a strong history of growth during economic downturns. This current issue is no different. Now is the time to plant seeds with relationship building, supporting your online communities, and preparing for the growth that is just around the corner. This is an excellent time to focus on the fundamentals of your business: optimize your supply chain, develop consistent onboarding, and leverage this as an opportunity to make ourselves and the industry better. Let’s make the direct sales industry the leader in helping people become truly self-reliant.”

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We have come to the end of 2019! I had asked some of the prominent persons of the direct selling community to offer their perspectives on what they see coming in 2020.

“What will be the most important issue, whether it be an opportunity or a threat, in the direct selling industry that will need a closer focus Next Year?” was the question.

Last week’s article covered the first group of responses. You will now read the second group below. Feel free to add your own comments at the end of the text.

Brenton Kugler, Partner at Scheef & Stone, LLP

“MLM companies operating in the U.S. must take a fresh look at their compensation structures in the wake of heightened FTC scrutiny of MLM compensation plans and new criteria announced by the FTC for determining what is and is not a legally compliant compensation plan. Companies should review and update antiquated compensation plan terminology and concepts, and where necessary rewrite the compensation plan so that it is easy to understand (and conversely, is not capable of being misunderstood or misconstrued by a regulator). The FTC has promised further “aggressive” enforcement activity directed at MLM companies operating in the U.S. Companies should ensure that their compensation plans in structure, practice and terminology make it clear that compensation paid to program participants is primarily based on verifiable sales of products and services to non-participant consumers.”

Marie Lacroix, Executive Director of European Direct Selling Association (Seldia)

“It is clear by now that companies who miss the digitalization train will not survive in the coming years. Besides that, at least in the EU, there has been a great deal of attention afforded lately to the opportunities arising from flexible working conditions. In the context of a changing world of work where people stop working from 9 to 5 the same job all their lives, one of the strengths of our industry is salesforce training. In the near future, companies should focus on transferable soft skills, as well as a strict ethical framework benefitting both consumers and sellers”.

Sebastian J. Leonardi, President & Chief Business Strategist at DSXgroup

“For direct sales and social commerce companies, the current state of market transformation is a board level agenda item. An imminent threat facing traditional direct sales models is failure to recognize that transformation isn’t just here, it’s accelerating. Today, while some DS companies explore the impact of Gig Economy pressures, companies such as Uber (a favorite DS comparison) are expanding and multiplying opportunities for independents through Uber Works and other technology-driven growth initiatives. Simultaneously, retail brands are continuing their pursuit of omnichannel nirvana by honing personalization, strengthening emotional connections, and innovating fresh experiences- all designed to retain and capture new customers. Aside from simplifying compensation plans, refining messaging, and initiating compliance audits; what’s your strategy for driving customer acquisition, brand loyalty, and network growth in the retail transformation age?”

Alan Luce, Senior Managing Partner at Strategic Choice Partners

“The next five years will see direct selling become more retail-oriented with the focus on customer acquisition, customer retention and customer service. At the same time, direct selling sales force attraction will focus more than ever on having an attractive, competitive and compelling part-time income opportunity for people looking to earn $500 to $1,500 a month.”



Peter Maddox, President of Direct Sellers Association of Canada

“I believe that the most important issue for direct selling in 2020 is ensuring that our business practices continue to evolve – to a point where we can consider ourselves a positive role model to all industries. This doesn’t mean always agreeing with regulators, nor does it prevent us from fighting back when we are unfairly targeted. But it does mean working together through forums such as DSA Canada, questioning colleagues when we are not sure that their actions are best for the industry, and investing in compliance. In this changing landscape, DSA Canada membership provides excellent value. We act as our member’s extra set of eyes and ears, helping to protect their investments in this market.”

Nick Mallett, Director at Pan European Solutions

“Whatever the political, social or economic view one takes, surely our General Election creates certainty that BREXIT will happen, on 31 January 2020. BREXIT is still shrouded in uncertainty, as regards the timing and substance of the all-important trade deal, even down to whether there will be a “deal” or not. BREXIT does not raise any concern that the UK-origin law should be changed – quite the opposite, given the clamour for recovering sovereignty. EEC/EU-origin law was all implemented into UK law by UK legislation, so that will remain in force indefinitely. For the UK government to voluntarily change any law of relevance to the direct selling industry would damage the integrity of the single market, which would surely be unwise. So, the status quo is bound to prevail for quite some time, as there is no BREXIT-related need to change any law in this area.”

Gillian Stapleton, Executive Director of Australia Direct Selling Association

“In 2017, Direct Selling Australia celebrated its 50th anniversary with a conference theme of ‘Disrupt Yourself Before You Get Disrupted’. Two years on and shifts both domestic and global mean we can linger no longer. Right now, the media target our industry with relentless frequency, regulators have the channel on their radar and consumers seeking flexibly and remote working options have many choices. The industry must address education and training of the distributor, improved compliance and compensation and change the culture of recruiting. In Australia, DSA is focused on making the industry attractive once again, by sharing the realities of our best product – our people, always with the aim to enhance reputation and better protect and promote our members. When they succeed, we succeed. Disruption is here but now, like a Phoenix, the channel will gain new life that is stronger, that connects across cultures and celebrates another 50 years of growth.”

Kevin Thompson, Partner and Co-Founder of Thompson Burton

“2020 is going to be a challenging year in our sales channel. The negativity in mainstream media will continue to climb, making it more difficult for distributors in the field.  Then there’s the litigation between the FTC and Neora. The stakes are high and I expect there to be some consequences to come out of that case, for better or worse. There’s a stampede coming and the intelligent companies are going to find ways to ‘climb up a tree’ to avoid being crushed.”

Terrel Transtrum, President and Founder of ServiceQuest

“Direct selling works when companies understand that humans are hard-wired for connection, growth, and significance. Service is the key to helping people see their way to success, by clearing hurdles, lifting burdens, and building hope. More than ever before, 2020 is the year to focus on serving customers and reps. From cracking down on hold times or using social media as a contact center touch-point, to one-call problem resolution and amazing on-boarding, the prize will go to the business that understands who is king (the customer) and who is the heart of direct sales (the distributor).”

Daryl Wurzbacher, CEO of ByDesign Technologies

“We have a tremendous opportunity to elevate the credibility of direct selling with better reporting and tracking of retail sales to customers. Consumers around the world depend on the innovation our industry delivers, making retail sales the backbone of what we do. For companies that ship directly to customers, this is a given and easy to show; but for companies where there’s a “cash and carry” component, there needs to be a better solution. As an industry, we need an easy-to-use method to demonstrate objectively what we already know — that real customers are driving our sales.”

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The post In 100 Words: Looking Ahead to 2020 – Part 2 appeared first on The World of Direct Selling.

As we have left another year behind, I asked some of the prominent figures of the global direct selling community what they saw coming in 2019.

“What will be the most important issue, whether it be an opportunity or a threat, in the direct selling industry that will need a closer focus Next Year?” was the question.

Below are their responses:

Oscar Cano Arias, Managing Director of Direct Selling Europe

“2019 will be a crucial year for the sector in the EU from a regulatory perspective. First of all, 1Q will see the closure of the amendment of the Unfair Commercial Practices Directive, which will change the way to operate unsolicited marketing sales in the EU. Another important piece of legislation to be completed soon will be the new EU law on Collective Redress, which will have some similarities to the American one. Furthermore, in May 2019 a new EU Parliament will be elected for a new 5-year-term period, in parallel to a new EU Commission – the EU executive branch. Direct Selling Europe is working with all key decision makers and industry representatives to ensure that the interests of well reputed and sustainable direct selling companies continue well preserved with the new EU decision-makers.”

Jeff Babener, Legal Counsel at Babener and Associates

“In 2019, dual challenges, business and legal, face direct selling. On the business front, can the industry leverage the personal touch of direct selling to overcome the satisfying Amazon consumer buying experience, and the instant earning experience of gig opportunities such as Uber and Lyft? On the legal front, can the industry continue to cement its independent contractor exemption under state unemployment laws in such states as Connecticut and Oregon, and develop a strategy with the gig industry in California and at the federal level to avoid application of fair labor standards laws that require minimum wage and hours?”

Michel Bayan, CEO of Directech Labs

“Direct sellers will need to continue to step even further out of the box, questioning ideas that may seem completely fundamental to us, and become the attainable “gigs” that people around the world are looking for. In order to do that we’ll first have to let go of selling the idea of riches. Some people are setup to achieve this, but most are not. We’ll have to lever our data to better understand our customers and sellers, offering them the experience that’s right for them, and not the experience we wish they would have. Those who experiment and learn rapidly will win big.”

Sean Eggert, CEO of Hanna Shea Executive Search 

“According the the U.S. DSA 2017 Direct Selling Report the largest age segment within the industry is now millennials. This is a group that has often been misunderstood and in my opinion unfairly labeled in a negative way. They have been brought up in a world that is very different from the one previous generations grew up in. The failure of a direct selling business to understand this group in terms of how they learn, socialize and share opportunities could severely limit the growth potential of an organization. The companies that embrace this unique group and offer solutions to them that compliment their learning and selling style along with having a strong mission statement will have a much better chance of success.”

Tamuna Gabilaia, Executive Director and COO of the WFDSA

“This year marked a milestone WFDSA 40th Anniversary. We saw sustained growth in all regions – global retail sales increased by 1.6% and the industry experienced 3.7% CAGR. As I look around, it gives me an immense satisfaction to see that millions of people are involved in direct selling and we have played a part in impacting ordinary people’s lives. Our industry’s future is bright as we move in 2019. Direct selling is an omnichannel marketing – marriage of traditional direct selling with internet tools while maintaining individual approach. Little advertising, word of mouth recommendations, best products at competitive prices. Mobile tools help run a business and present products, social media gives direct sellers an ability to reach their customers in new ways, live/interactive training makes learning more accessible. Therefore, we must continue proudly promoting the positive story of our industry and solutions we provide for people all over the world while maintaining individual approach which our industry does better than any other industry!”

Ed Jarrin, President and Co-Founder of Exigo

“Long before innovation created the ‘Amazon Effect’ for consumers, ‘direct sales’ software providers spearheaded our own technological revolution by developing the capabilities to connect and pay millions of distributors simultaneously and differentially with the same ease of paying a one-time commission on a simple retail sale. Without those breakthroughs, their is no gig economy, no downloading a biz opp from a smartphone faster than you can make a phone call or should I  say, “Send a Snapchat.” Our greatest opportunity in front of us, is to create a new direct sales experience that transports customers to a new destination of personalized and authentic real-time data centered right in the palm of their hand.”

Robert Kreklewetz, Founding Partner of Millar Kreklewetz

“The Canadian direct selling marketplace continues to be dynamic in terms of compliance concerns. First and foremost is the Competition Bureau’s evolving administrative position on legal and illegal recruitment requirements, and all direct sellers operating in Canada should be revisiting their compensation plans. Low US tax rates are also making many current Canadian ownership structures stale, at the same time that the USMCA and Canadian retaliatory tariffs threaten to impose duties on imported goods. Clearly, international tax and customs reviews are called for in 2019. We have been fielding a lot of calls and emails on all of this lately, and I think it is just going to get worse!”

Roberta Kuruzu, Head of Business Development and Services at Kuruzu & Marostica

“Both for 2019 and for any short-term planning direct sales companies should focus on developing tools to digitize its sales force, as well as position itself strongly in attracting the new generation of entrepreneurs (millennials and new retirees who are highly qualified and will lose their jobs in the near future).”

Sebastian J. Leonardi, President & Chief Business Strategist at DSXgroup

“Direct sales companies must recognize that retail’s transformation and the rise of e-commerce marketplaces have set the tone for all customer expectations. As retail continues to prioritize relationships over transactions, direct sales has to evolve to remain competitive, relevant and sustainable in what is clearly a global omnichannel marketplace. One that has been transformed by technology, culture and generational shifts in buying power. Direct sales is no longer an impenetrable bubble and we cannot escape the influence of transformation. To survive, companies need to be proactive and preemptive. Focusing on a ‘Reactionary Approach’ to define strategy will lead you to extinction.”

Alan Luce, Managing Partner at Strategic Choice Partners

“The most serious issue facing direct selling in the new year is the fact that the US direct selling industry is becoming ever more fragmented. Not so long ago the Direct Selling Association membership included nearly all the top names in the US industry and could claim to represent nearly 90% of the independent sales forces. Today that is no longer true. Many of the largest and best-known companies no longer belong to DSA and more and more small and start-up companies for various reasons are choosing not to join. At some point this lack of universal representation in the association will weaken its ability to speak for the whole industry in regulatory and legislative matters. Industry leaders must work to find consensus and support a unified voice again that benefits and will attract all direct selling companies.”

Peter Maddox, President of the Direct Sellers Association of Canada

“In 2019, I believe that we must continue building a positive narrative about our industry. We can do this by emphasizing the trustworthy and ethical business opportunity that direct selling provides, and by showing that our distribution model creates solutions to help build strong economies and communities. Our CEOs, staff and entrepreneurs must place ethics at the front of their minds and never be afraid to proactively proclaim what makes this industry so great – wonderful people, acting with integrity and building dreams. The DSA Code of Ethics is at the heart of this commitment.”

Brian Palmer, CEO at Krato

“In 2019 there will be a burst of new direct selling companies who will be able to launch in just a few months and with a quarter of the budget that it used to take to launch a company five years ago. Here’s why: Technology is making everything possible. People with the right knowledge and tools can launch a new direct selling company using an affiliate model. While limited in levels and back office access a company can test their concept faster. This will allow many e-commerce stores to give direct selling a chance without investing a lot of money.”

Rich Schubkegel, V.P. of Business Development at Thatcher Technology Group

“Direct selling has always prided itself on offering individuals an opportunity to earn extra income and build a business while accomplishing it around their own personal schedules. Now that the “Gig Economy” has validated the attractiveness of those same concepts, the threat that direct selling faces is whether we can execute the model as well as these new competitors. Ask yourselves a few simple questions: How easily can someone find out about your opportunity among thousands of alternatives? How easily can they sign up? How easy is it to sell your products or perform your services? Then, if you have gotten them that far, how quickly will they be compensated, incentivized and recognized for their performance?”

Gillian Stapleton, Executive Director of the Australia Direct Selling Association

“The direct selling channel is fueled by passion but this alone will not drive growth and innovation. With digitization, the growth of the gig economy, the channel must stay relevant to meet the changing needs. We have for a longtime stood out as being connected to our customer base but this is being eroded away by the changing nature of commerce. Fear or excitement towards this change depends only on your point of view. In my mind, the channel has never been as relevant as it is now. Flexible work, more time and money are on everyone’s agenda and the channel has always been able to offer that. The fundamentals remain solid; customers still respond to personal touches and moving stories and they as consumers, want to feel empowered. Exceptional products, great value, fair and rewarding plans and distribution systems that meet the needs of the consultants and consumers will ensure sustainability and relevancy of the channel I have loved for 30 years.”

Kevin Thompson, Partner and Co-Founder of Thompson Burton

“2019 represents a great opportunity for the industry to implement self-regulation in a meaningful way. Dubbed the Direct Selling Regulatory Council, or “DS-SRC,” the effort looks like a solid step towards having true, independent accountability in the industry.  The current FTC seems to be cooling off, which makes it more important than ever that the industry work together to weed out the rotten companies.  I expect this entity to make a meaningful splash in 2019, teeing it up for greater importance in the future for both companies and consumers.” 

Terrel Transtrum, President and Founder of ServiceQuest

“The threat: In general, business is driven to be more transparent than ever before. Yet direct sellers (though they think they are transparent) can be closed if for no other reason than they are remote and, some perceive, in a far-away fortress. Consumers want more than a transaction. They want a relationship. But a relationship depends on transparency, and too few direct selling companies are prepared to be that frank, to be that open. It’s a grave threat to direct sales as other direct-to-consumer companies embrace this expectation. We need to get serious about pulling back the curtain and inviting people to come in to build their trust. In practice, it means sharing things like ingredients, supply chains, and real compensation. These relationships matter, and they are fortified by giving people a reason to believe in us in the first place.”

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The post In 100 Words: Looking Ahead to 2019 appeared first on The World of Direct Selling.

As we come to the end of another year, I wanted to ask some of the prominent persons of the direct selling community what they see coming in 2017.

“What will be the most important issue, whether it be an opportunity or a threat, in the direct selling industry that will need a closer focus Next Year?” was the question.

You will read in this week’s article, their responses:

Oscar Cano Arias, Managing Director of Direct Selling Europe (DSE):

“Yet again, ethics will be a top issue in the year 2017. Due to the lack of serious and effective self-regulations in the US, the FTC is determined to react. In 2015, the FTC closes down Vemma accused of operating a pyramid scheme. Then, in July 2016,  it adopts a Resolution against Herbalife that could have not been tougher: “Herbalife is going to start operating legitimately, making only truthful claims”… “Herbalife will have to restructure its business so that participants are rewarded for what they sell”… “Herbalife will have to compensate consumers […] as a result of unfair and deceptive practices”. 2017 will see new FTC Guidelines for the US direct selling industry, likely to include main points of the Resolution against Herbalife. Direct Selling Europe (DSE) welcomes the FTC move and invites the FTC to publish its new Guidelines the earliest possible. In the meanwhile, DSE continues working with all stakeholders to make sure that the interests and image of the well reputed and sustainable companies are well preserved.”

Jeff Babener, Legal Counsel at Babener and Associates:

“The thrust of the message of the October 2016 presentation of the FTC Chairwoman, Edith Ramirez was “more FTC regulation is coming… live with it”. On notice going forward: The FTC would reject a legal standard accepted by courts for 40 years, The Amway Safeguards Rule, and proposes guidance to “upend and reject” decades of industry practices that recognize full credit for personal use by distributors, track qualification volume based on wholesale movement of product, allow for monthly sales volume activity qualification based on distributor purchase volume and encourage and reward autoship programs that deliver predictable volumes to distributors. A surprise: The 2016 Presidential election results may usher in an anti-regulatory climate. Sponsor of a bi-partisan anti-pyramid bill to codify recognition of personal use purchases and establish legitimacy standards acceptable to the direct selling industry, is Rep. Marcia Blackburn, member of the Trump transition team and potential Cabinet member. To its surprise, this may be the year of opportunity for the industry to seek refuge from over-regulation, with model legislation that has already been adopted as law in more than a dozen states.”

Jacques Cosnefroy, General Secretary of the France Direct Selling Association (FVD):

“In a world in constant transformation, where the cultural revolutions are exempted from principles of belongings of the majorities, where the faith in the other one has become a variable of adaptation, where the inherent values of our personal construction are no longer considered as sources of reference, where the fear of the next day is a component of the everyday life, where the transparency is not anymore an option, the direct selling industry creates for each and every one a solid bedrock for the future, which could be threatened by a lack of control of our communication. Communication has become an asset and a threat for our companies! An asset because it offers this incomparable universal dimension which connects the people, and a threat because if uncontrolled  it can convey unethical information that could severely damaged the image of the direct selling industry.”

Tamuna Gabilaia, Executive Director and Chief Operating Officer of The World Federation of Direct Selling Associations (WFDSA):

“2016 was a very exciting year for the industry. We saw sustained growth in all regions – global retail sales increased by 7.2% and the industry experienced 7.2% CAGR. We can see that people all over the world are increasingly interested in getting into business for themselves and we anticipate we will continue our growth pattern and will remain a vibrant industry bringing economic empowerment to people all around the globe. However, we still need to tell our story better. We need to align around messaging and a common narrative. There are widespread misperceptions and misunderstandings about direct selling. Explaining who we are and how our businesses work is an area we need to focus on. The WFDSA Messaging Guidebook developed under the WFDSA Advocacy Committee is a tool that will increase public understanding of direct selling and foster greater communication among member companies. Lastly, WFDSA World Congress XV “Rendezvous with the Future” which will be held in October 2017 will be an unforgettable event which will clearly demonstrate the key role our sector plays in the global economy.”

Brent Kugler, Partner at Scheef & Stone, LLP:

“The winds of change continue to grow stronger in the direct sales industry. Companies must be proactive in addressing changes that can now be seen as inevitable, if not mandatory, in light of recent FTC activity and comments from FTC Chairwoman Ramirez following FTC- Herbalife. The “wait and see what others do” approach is no longer a viable option in today’s regulatory climate. Companies must retool their compensation plans and reinvest in technology to track verifiable retail sales to non-distributor customers and calculate commissions and rank advancement based on those sales. Companies should also be wary of promoting “optional” high-priced enrollment bundles, as recent enforcement actions make clear that regulatory authorities are increasingly focused on the percentage of distributors who are unable to earn enough compensation to offset the cost of enrolling with a company.”

Alan Luce, Senior Managing Partner at Strategic Choice Partners:

“Rising to the challenge to provide world class access and service levels to end user customers and salesforce members will be the defining characteristic of successful direct selling companies in the future. Those companies that meet or exceed world class status in access and service will succeed. Those who do not raise their game will wither and fail as both customers and sales people choose to go elsewhere regardless of how good or unique their products and services may be.”

Nick Mallett, Director at Pan European Solutions:

“The Internet has reached the stage where established social media platforms are now less essential to new entrants to networking businesses. There will be increasing instances of ‘private’ networking portals, worldwide. These represent a competitive threat to established network marketing businesses. We see a serious risk from the spread of such platforms in the regulatory sense of their being somehow above the law, through operating in the ‘virtual world’. The viral spread of such businesses is such that they are subject to the laws of the many jurisdictions in which they operate. On the one hand, they may be able to carry on business in multiple jurisdictions despite being closed down in one or more where their operation contravenes local legislation; on the other, a regulatory challenge in one jurisdiction might just cause them to close down altogether. In the meantime, they may have given network marketing such a bad name – perhaps worldwide – that the various regulators introduce a more restrictive regime of control such as to restrict the previously legitimate activities of our established network business clients.  We must be vigilant on behalf of the legitimate industry.”

Katarina Molin, Executive Director of The European Direct Selling Association (Seldia):

“In 2017, we expect the positive growth for direct selling in the European region to continue, which shows that it continues to be a vibrant retail sector and enjoys high consumer trust. From a policy perspective, Seldia will continue its close dialogue with European policymakers on the EU consumer policy. It will be crucial to focus on the proper implementation and enforcement of existing EU legislation, an area that needs more attention in the future. Addressing issues such as non-tariff barriers as well as how to effectively put a stop to the practices of rogue traders must be prioritized. It is also time to step up our efforts to communicate better and more transparently on how the sector works, on what the channel is – and is not. We must also explain that it is not outdated channel of distribution, but on the contrary – very receptive to innovations and technological development. In terms of communication, it will be important to engage in a constructive discussion about segmentation of the people involved in direct selling, to keep a continued focus on ethics, and to collect independently verified data to share externally.”

Gillian Stapleton, Executive Director of the Australia Direct Selling Association (DSA):

“The Entrepreneurial Consumer is both an opportunity and threat. Great service has long defined direct-selling: establishing great rapport in-home, the personal delivery of products and follow up every season. Will that define the industry in the next 5 years? Direct-selling faces the biggest challenge in service it has ever experienced. Next day delivery, packaged in tissue paper, a hand -written note signed by the packer, establishes a good relationship for me with that company. An offer to exchange the goods or have three alternatives shipped at no cost to me and send back what I don’t want. That cements it. I am the Entrepreneurial Consumer and I could be your consultant. Will your company attract me?”

Bobbie Wasserman, Managing Director of Wave2 Alliances:  

“The FTC is now distinguishing between Distributors, personal consumption and customer purchases. Direct selling companies can harness this opportunity to engage and attract more customers – helping build each company’s credibility for its own brand and contribute to enhancing the industry’s credibility. Public relation campaigns focusing on executives’ leadership, premium products/services and entrepreneurial successes can provide a corporate narrative and business tools for Distributors. In the future, the industry can argue the semantics of purchase behavior via legal battles. However, now is the time to impact decisions being made in the ‘court of public opinion’ – those decisions are often made swiftly and without access to an appeal.”

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