New Numbers for a New Year

It’s 2024! In an age of unprecedented access to data and AI, it’s very easy to get lost in all the data we have access to. I’m intrigued and amazed by it all, but I’m also a rather simple man. I tend to find ways to simplify and synthesize things so I can actually do something with it, while also not getting too caught up in finding 10 different ways to essentially show me the same thing.

So what numbers are you focused on in 2024?

My partner and co-founder of Strategic Choice Partners, Alan Luce, used to coach clients that, if you could only track one number to determine the health of your direct selling business, track the ups and downs of your paid-as leaders. In other words, it’s one thing to track the number of Consultants who have achieved a certain rank in your company at some point, but what really matters are the number of Consultants who actually produce at those levels each month. Typically, if the number of Consultants achieving at each level rank increases for a month, some good things happened. If not, it was probably a weaker month.

Alan was right (he typically was). There can be exception to the rule, but tracking this one number not only typically captures the trends in revenue and recruiting for the month, but also the “pulse of the field.” Nothing causes more excitement than promotions and rank achievements. And, it has an interesting ability to track not only lagging indicators, but also predictive indicators in your business.

So, let’s start with saying this: If tracking paid-as leaders each pay period is not a part of your core KPI review each month, it needs to be.

As I’ve worked with clients the last few years, I’ve also noticed my fondness for tracking some often overlooked metrics that I feel have way more impact than most that we share. I even wrote about it here a while back.  Sure, we still need to track revenue, recruiting, new customer acquisition, order counts, order averages and more. But so often some of those data points can only capture a piece of the real puzzle. When you start asking questions like “why is recruiting important?”, or “why do new customers matter?”, you can find some deeper meaning in what I think are better numbers.

So, here are three numbers I think every direct selling company should start tracking diligently in 2024 and beyond:

Consultants Who Sold to a Customer

Enrolling new Consultants into your business is always important, and always will be. But why is it so important? Where the company may run campaigns for customer acquisition, it’s just acquisition by addition. The very nature of a “Consultant” should be that they are joining as a Consultant to sell to Customers (and maybe more). So they represent customer acquisition by multiplication.

But, of course, we know not every Consultant sells to a Customer every month. Or every quarter. Or sometimes even every year. We love ‘em all, but what we really need are Consultants who sell to a Customer.

So, start tracking how many Consultants sold to at least one customer in a month. Doesn’t have to be a new customer; just any customer. Some companies call these “Active” Consultants. Regardless of what you call them, set your baseline as to how many Consultants typically act like Consultants in a month, and then put together programs and campaigns to increase that number.

Focusing on multiplication efforts over addition efforts makes sense every single time.

Here’s a twist on these numbers to consider, too:

• What percent of total “Active” Consultants on your roster actually sold this month? So, if you have 50,000 Consultants on the books, and 20,000 of them sold to a Customer this month, that’s 40%.
• How many sold to 2 Customers? 3 Customers? 5+?
• How many new Consultants sold to a New Customer? (However you want to define “New”).

Consultants Who Sponsored Another Consultant

Much like tracking how many Consultants sold to a Customer, we also need to track how many Consultants sponsored another Consultant, for all the same reasons. This number will be much lower than the selling Consultants number (and it should be). But again, you want to really track your producers, not just people who sign up with good intentions.

Here are some twists you can put on this data as well:

• Track it quarterly as well as monthly; for most Consultants, sponsoring once a quarter is still very reasonable and denotes a high level of involvement.
• What % of your total Consultant roster sponsored this month?
• How many new Consultants sponsored a New Consultant?

# of Customers Who Placed Their Second Order

Customer Acquisition gets so much attention. But what does one order get us, really?!? What we really need to do is turn that acquisition into repetition. So much goes into getting new customers, and we so often completely drop the ball when it comes to retention. Start tracking how many Customers place their second order.

In the work I’ve done with clients, just getting more second orders from a new Customer can lead to thousands, even millions in new revenue.

Once you start tracking this metric, you’ll be shocked just how much it will shape your sales and marketing efforts moving forward. And the cost for the second order it normally way less than the first, in terms of total effort and investment.

We all love third, fifth, tenth orders, but none of that happens until you get the second. Focus way more on getting the second order from your new customers and watch what happens.

Where Do I Start?

Ready to get going? Here’s a simple place to start:

• Figure out how (and who) will track these new metrics.
• Backdate these new metrics for each month in 2023 to serve as your baseline.
• Set aside 30 mins each month to review your numbers, comparing them to last year, and make decisions on how you can improve them in 2024.

I’d love to hear about your results. Just think of what 2024 could like if more Consultants sold and sponsored, and more Customers came back and ordered more.

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“After successful ventures into skincare and wellness, we’ve continued to innovate and expand by introducing cosmetics into our portfolio,” said Ray Urdaneta, MONAT CEO and Co-Founder. “MONAT Skincare Makeup delivers benefits beyond color.”

MONAT Skincare Makeup is the newest expansion of the company’s premium skincare line, which along with its haircare and beauty supplement categories has propelled the brand to a household name. MONAT currently has more than 700,000 VIP Customers and 157,000 active Market Partners worldwide.

MONAT’s skincare makeup lineup includes:

• MONAT Perfecting Translucent Loose Powder: A talc-free formula that can help extend the wear of your makeup throughout the day. This product helps hydrate the skin, improves the appearance of textured skin, blurs pores, and fills in fine lines and wrinkles.
• MONAT Brighten + Correct Concealer: Medium to full coverage shades that blend effortlessly into the skin for a brighter, smoother, more youthful look. Featuring the immensely popular Eye Smooth technology with niacinamide and peptides, MONAT Brighten + Correct Concealer instantly covers dark circles, under-eye bags, puffiness, and signs of fatigue while helping smooth fine lines and wrinkles.
• MONAT Liquid Lipstick: Available in six universal, buildable shades and a sheer-satin finish, MONAT Liquid Lipstick features a weightless formula that provides the color you desire without the weight.
• MONAT IR Clinical Mascara: A black-tinted, lash hybrid product that merges the benefits of a lash serum with those of a traditional mascara. Infused with groundbreaking IR Clinical technology featuring caffeine, melatonin, and REJUVENIQE®, MONAT IR Clinical Mascara instantly lengthens and volumizes lashes while nourishing and strengthening for longer, stronger, fuller-looking lashes over time.
• MONAT IR Clinical Clear Brow Gel: A long-lasting clear brow gel featuring our revolutionary IR Clinical technology that lifts, fluffs, and sets brows in place for all-day wear. The lightweight formula hydrates, conditions, and defines for thicker-looking brows with a polished finish.
• MONAT Hydrating Liquid-Gel Cream Blush: A hydrating, buildable formula that instantly moisturizes and nourishes the skin while adding a healthy-looking, dewy glow that lasts throughout the day. MONAT Hydrating Liquid-Gel Cream Blush helps improve the look of skin texture and elasticity while brightening the skin. The liquid texture allows for a smooth and seamless application without streaks and patchiness.
• MONAT Radiant Bronzer: A talc-free, lightweight, buildable bronzer with REJUVENIQE S and squalane that sculpts and defines while providing a radiant, sun-kissed look. Pigments work to blur lines and diffuse to create a lasting, luminizing effect with natural-looking warmth.

As with all MONAT products, MONAT Skincare Makeup products are naturally based, vegan and animal-friendly.

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Alan was a US DSA Hall of Famer and a member of the DSEF Circle of Honor. He served in executive roles at Tupperware, PartyLite and also other companies. Rest in peace, Alan.

Working Through a World of Misinformation

It’s everywhere. Misinformation now permeates nearly every aspect of our lives. Fake news, fantastical conspiracy theories and lies spread through social media and cable personalities who are have learned that they can make a lot of money propagandizing every conspiracy theory that will play well to their audience. Spreading misinformation is much more profitable than telling the truth based on provable facts and reliable data.

This toxic atmosphere leaves those of us looking to make decisions about our lives and our businesses based on facts, truth and reason in a constant and energy sapping search for answers.

Dealing with misinformation, whether spread through ignorance or intent to mislead is nothing new for those of us who have spent our careers in direct selling. For years, the critics of our industry have offered up ill-informed opinions that express a negative opinion about direct selling as an income opportunity. Too often these negative opinions are based on incomplete data combined with individual anecdotes of dissatisfied former sellers that the propagators of the misinformation then apply to the whole industry.

Now before we go any further, it is important to note that in some cases the criticism is fully justified and factually supported. Like any industry, direst selling has had its share of bad actors who use dubious and misleading recruiting pitches and other types of unethical practices that attract regulatory attention and deserved to be condemned. But too often the industry critics assume that the entire industry is guilty of the perpetrating the same bad practices.

What is not, or is rarely, acknowledged is that there are many, if not most, direct selling companies that have provided part and full-time income opportunities for decades without a single blemish on their record or regulatory action against them. Many of these companies sell products that have become well-known brands with thousands of loyal customers. The undeniable fact is that the ethical companies who follow industry best practices far outnumber the bad actors but you almost never hear about that from the industry critics.

So, back to some of the current and most egregious misinformation that is spread on social media are addressed in what follows:

1. Direct selling is in decline as a business model and has falling sales revenue.

The facts just do not support that conclusion in any way. Almost every public direct selling company has reported double digit sales and or revenue growth for the first quarter of 2021. Likewise, the privately held direct selling companies that are clients of Strategic Choice Partners all have reported that 2020 was a great year for sales growth and increases in the number of people selling their products and services. The annual Direct Selling Association review of industry performance has yet to publish for 2020 as the information is still being compiled, but all the early indications are that 2020 was a banner year for the industry.

The only possible conclusion based upon facts supported by credible data is that the direct selling model is doing well in this market environment.

2. Direct selling is behind the times and not suited to compete in today’s virtual economy.

Again, the facts say otherwise. In no small part direct selling has enjoyed strong growth because the companies and their sales forces were quickly able to move to using virtual platforms rather than the traditional face to face sales presentation. The companies quickly pivoted to providing online catalogs, product demonstration videos and order processing systems that could be used on both smart phones as well as desk top and tablet computers. The industry used its flexibility and resourcefulness to provide their sellers with all the tools to successfully conduct their sales of products and services online and the sales forces responded by growing in numbers and productivity.

3. Direct selling cannot compete with the plethora of new gig income opportunities.

It is true that the many new gig opportunities create a large and growing category of competitors for people to represent and sell our products and services. But, as the facts about the industry growth prove, so far direct sellers are competing quite successfully. Here are just some of the things that companies are doing to improve the competitiveness of their part-time income opportunity:

• Companies have been reducing the cost of joining the business and making the enrollment process much easier and capable of being quickly and easily completed on line from smart phones.
• Companies are quickly shifting the publishing of needed business information to being delivered to smart phones to ensure that the needed information is quickly and accurately published.
• Many companies have undertaken projects to amend the compensation plans to make part-time retailing more profitable than it may have been in the past.
• Most companies are reviewing their entire sales system with a goal of making their marketing and sales programs more customer-centric and focused on retail sales.

Added to what the companies are doing, existing sellers and potential direct selling candidates have discovered that selling online, rather than using the traditional face to face techniques, is actually more profitable than the old system. As online sellers they do not need to cover car expenses, lose the time to drive to and from an appointment and other expenses such as child care if a single Mom is engaged in the direct selling business. It turns out that the dollars earned for time spent is actually greater as online sellers. And, being an online seller for a direct selling company is safer than the traditional business. That they do not have to leave the security of their home is an important reason for single Moms to choose direct selling over other gig opportunities.

For more about the gig economy, I highly recommend the recently published book entitled The Ultimate Gig. This book and the related service and updates that the author will publish is must reading for all direct selling executives.

These are just three types of misinformation floating around in the social media realm. Each of these false claims can be easily debunked by simply looking at the actual facts and data. But to really combat misinformation nonsense, direct sellers must become engaged by challenging these false claims with the facts and truth. We need senior executives to speak out telling the true story of our direct selling model.

No responsible person will claim that direct selling is perfect as it is. There will always be places where we can improve and will have to change to meet evolving market trends. But the truth is mostly on our side. Direct selling has a good story to tell. We need everyone in the business to help tell that story online and in other communications formats.

Speak up folks!

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Strategic Choice Partners is a comprehensive business development firm that combines the consulting and executive expertise to help direct selling companies determine their best next steps, and the hands-on capabilities to help you make it happen. We’re equal parts consulting firm and boutique agency, and our clients love us.

Co-founded by the late Alan Luce and Brett Duncan, and currently owned and operated by Brett Duncan, Strategic Choice Partners (SCP) brings together experts from different areas of direct selling to provide companies with support in just about every area of their business. Brett is considered one of the top thought-leaders in direct selling today, and has contributed many times to World of Direct Selling.

We’ve worked with more than 70 direct selling companies since 2014. We help direct selling companies in so many ways, but here’s a short video highlighting the Top 10 Reasons Companies Hire SCP:

Our Services

Work with Us

Ready to learn more? Let us customize a team of experts for your next project or initiative, and partner with Strategic Choice Partners. Learn more

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This week’s article is a collection of 2021’s significant direct sales news. It was most certainly a tough year for all industry players. Yet we know there were positives alongside with all the negatives. Also included, you will find selected articles from The World of Direct Selling that stood out last year according to readers’ responses.

> Avon in North America Gets a New Name: The Avon Company
> Nu Skin Reports 16.5 Tons of Paper and 21 Tons of Plastic Savings in 2020
> How Pampered Chef Revolutionized Home Cooking
> Herbalife and LA Galaxy Unveil First-Ever Major League Soccer AR Fan Experience
> How the Pandemic Stoked a Backlash to Multilevel Marketing
> Rodan + Fields Ups Commitment to Refillable, Reusable, and Recyclable Packaging
> Scentsy CEOs Are Leaving for London. Here’s What They’re Doing
> Avon Partners with Fuse to Drive Sales with Active Learning
> Is Personal Selling Dead? The Rise of Virtual Selling

Most-Read Article in January on The World of Direct Selling:
Five Pillars of a Successful Direct Sales Company – Hakki Ozmorali

> Amway Reports $8.5 Billion Sales in 2020, Up 2% from 2019
> LifeVantage Announces Appointment of Chief Executive Officer
> Nu Skin Reports Fourth-Quarter Revenue Growth of 28%
> USANA’s Digital Improvements Bear Fruit with 14.5% Sales Rise in Forth Quarter of 2020
> Jeunesse Achieves $8 Billion in Cumulative Worldwide Sales
> Leggings Company LuLaRoe Settles Pyramid Scheme Allegations
> Herbalife Reports Record-Breaking 2020 Net Sales with 14% Growth versus Prior Year
> Medifast Reports $935 Million Revenue in 2020, Up 31% from 2019
> Nu Skin Announces CEO Transition
> Oriflame’s Sales Decline by 8% in 2020 to €1.157 Billion

Most-Read Article in February on The World of Direct Selling:
3 Reasons Social Media Should Become the Lifeblood of Your Company in 2021 – Max Pecherskyi

> Natura &Co Outperforms the Global Market in Q4 2020
> Tupperware Announces 17% Sales Increase in the Fourth Quarter
> Juice Plus+ Names Former Coca-Cola Exec Its First Female CEO
> Amway to Cut 6% of Global Workforce, More Than 800 Jobs at Headquarters
> Rodan + Fields Promotes Dimitri Haloulos to CEO
> Inside Farmasi’s U.S. Expansion
> Avon to Launch in Kenya
> Melaleuca Awards Its Employees $2.2 Million in Longevity Bonuses

Most-Read Article in March on The World of Direct Selling:
2020 in Five Major Companies’ Figures and Charts – Hakki Ozmorali

> Why COVID-19 Could Be Pushing More People to Multi-Level Marketing Companies
> Virtually Beautiful: Mary Kay’s Digital Showroom Is a 360-Degree, 3D Beauty Experience
> The Carlyle Group Acquires Major Stake at Beautycounter, Valuing Company at $1 Billion
> Natura &Co Expects US$8.5-$8.8 Billion Consolidated Revenue in 2023
> Tupperware Launches Its Innovative Channel “Homeshop” in India
> Euromonitor: Herbalife Is World’s #1 Weight Management and Wellbeing Brand
> Tyler Whitehead Is the New CEO of Arbonne
> LR Health & Beauty’s 2020 Revenue Rises by 27% to EUR 285 Million
> Young Living Study Shows Pandemic Heightened Importance on Wellness
> The Avon Company Sets Digital Retail Ambitions on Livestream Shopping

Most-Read Article in April on The World of Direct Selling:
Celebrities in Direct Selling – Hakki Ozmorali

> Tupperware’s Turnaround Plan Well Underway with Sales Growth of 22%
> Medifast Announces 91% Sales Increase in Q1
> Natura &Co: Digital Social Selling and Ecommerce Drive Revenue Growth in Q1
> Arbonne Elevates Customer Experience with New Mobile-First Website Redesign
> Multilevel Marketers in Health and Wellness Continue Their Streak
> U.S. Direct Selling Industry Study Reveals 13.9% Growth in 2020
> The Vorwerk Group Reports 8.6% Sales Growth in 2020, Reaches EUR 3.2 Billion
> The Lessons Avon Learned from Joining TikTok

Most-Read Article in May on The World of Direct Selling:
Working Through a World of Misinformation – Alan Luce (1945 – 2021)

> ACN Reaches Agreement to Acquire Kynect (formerly Stream)
> Now Worth $1 Billion, Beautycounter Aims to Take Big Leap
> doTERRA Expands in Southeast Asia with Thailand Opening
> Door to Door, But Digital: Avon CEO on How a Historic Firm Gets with the Times
> Natura &Co Launches Investment Firm, Fable
> German Direct Seller LR Health & Beauty Readies Asia Foray – from Korea
> Tupperware-Style Retail in UK Smashes GBP1 Billion in 2020
> TINA.Org Lobbies FTC to Use Penalty Offense Authority Against Direct Sellers

Most-Read Article in June on The World of Direct Selling:
New Data Reveals Canadian Direct Selling Grew Significantly in 2020 – Peter Maddox

> WFDSA Announces 2020 Global Direct Selling Statistics
> L’Occitane’s Direct Selling Business LimeLife Is Its Fastest-Growing Brand
> More Trouble for Embattled Rodan + Fields: Its Insurer Is Suing
> Market America | SHOP.COM Partners with Verb to Launch SHOP LIVE
> Direct Sales Industry Legend Alan Luce Passed Away at the Age of 75
> Camelle Kent Named Chief Executive Officer of Thirty-One Gifts
> Longaberger Gathering Celebrates Brand’s Relaunch
> PM-International Expands into the United Kingdom

Most-Read Article in July on The World of Direct Selling:
Fulfilling Your Orders Should Be Like Turning the Light On – Doug Finnie

> Herbalife Reports $1.6 Billion Sales, Double-Digit Growth for Fourth Straight Quarter
> Francois Renard Joins Amway as Chief Marketing Officer
> Natura &Co Reports 36% Sales Growth in the Second Quarter
> Rodan + Fields Welcomes New Chief Global Sales Officer and Chief Marketing Officer
> Amazon Unveils Trailer for ‘LuLaRich’, Investigative Docuseries About LuLaRoe
> Rex Maughan, Founder of Forever Living Products Passes Away
> How Dan Chard Healed Medifast, the Company That Helps Thousands Feel Better
> Neora Celebrates A Decade of Making People Better

Most-Read Article in August on The World of Direct Selling:
5 Tips to Improve Productivity and Retention – Daryl Wurzbacher

> Amare Global Announces Jared Turner as CEO
> Belcorp Digitally Transforms their Consumer Shopping Experience
> Pampered Chef Launches ‘Table’, a First-of-Its-Kind Virtual Party Platform
> Beauty Brands Opt for Multipart Livestreaming
> Turkish Direct Seller Farmasi Introduces Sleek Makeover with Plans for North America
> Avon Revamps Digital Sales Model as Clicks Replace Calls
> L’Occitane Launches Social Selling Platform “MyL’Occitane”
> Tupperware to Set Up 1,000 Retail Stores in India in Five Years
> U.S. Direct Selling Association Issues Statement on “LuLaRich”

Most-Read Article in September on The World of Direct Selling:
3 Easy Ways Every Direct Seller Can Start Cranking Out More Videos​ – Clark Diemer

> Avon Opens First Flagship Store in China
> FTC Puts Hundreds of Businesses on Notice
> Natura &Co: Environmental and Social Impact “The Next Chapter” for Cosmetics
> People, Culture and Their Safety Is of Prime Importance to Oriflame
> Is Younique Going Out of Business? Not Yet, Despite Challenges
> Tupperware Sells Its House of Fuller Beauty Business in Mexico
> Is Direct Selling the Answer to Women Empowerment in Africa?
> Plexus Promotes Gene Tipps to President of Global Operations
> Mary Kay Rolls Out Beauty App for Skin Care, Makeup, Fragrance and More
> To Be More Sustainable, Beauty’s Biggest Companies Are Teaming Up

Most-Read Article in October on The World of Direct Selling:
Trust and Communication: The Foundation of Success in Direct Sales – Brett Duncan

> US Direct Selling Association Announces 2021 Award Winners and 25 Largest Companies
> Herbalife’s Strong Q3 Results Good Sign for Continued Demand for Supplements
> Amelia Warren, Epicure’s CEO Named One of Canada’s Top 40 Under 40 for 2021
> PM-International Announces Plans for Launches in Americas, Asia and Africa
> ASEA Announces Changes to Its Exective Team
> Seldia (The European Direct Selling Association) Elects New President and  Directors
> Longaberger Is Transforming Itself into the Largest Marketplace for Artisans
> India’s Direct Selling Market and the Pandemic: What Lies Ahead?

Most-Read Article in November on The World of Direct Selling:
Direct Sellers – How Much Did They Earn Last Year? – Hakki Ozmorali

> Amway CEO Milind Pant: “Online Is the Best Thing That Happened to Our Industry”
> Newsweek: Tupperware Is One of America’s Most Responsible Companies
> Medifast Named to FORTUNE’s Fastest-Growing Companies List for a Third Straight Year
> Nature’s Sunshine Co-Founder Gene Hughes Passes Away at the Age of 91
> CEO of QNET: People Defaming QNET Have Not Investigated the Realities
> Cosmetify’s Hottest Beauty Brands of 2021 Ranking
> Scentsy Hits $1 Billion Revenue in 2021
> doTERRA CEO David Stirling Steps Down, Corey Lindley Appointed as Successor

Most-Read Article in December on The World of Direct Selling:
Need to Pivot to a Customer Focus? Here’s How – Nancy Tobler

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Alan Luce was most recently the Co-founder and Managing Principal of Strategic Choice Partners (SCP). SCP is a consulting firm dedicated to providing services to direct sellers and specializing in guidance for both established companies and start-ups. He provided strategic advices to dozens of direct selling firms including Avon, Princess House, PartyLite, Inc, Initials, Inc., Mannatech and Amway. In addition, he served on the boards of directors of various direct selling companies.

He was a frequent industry spokesman and expert lecturer at college and university business schools on behalf of the Direct Selling Education Foundation. Keen to share his wisdom and knowledge with all, Alan wrote numerous articles for The World of Direct Selling, Working Through a World of Misinformation being the last one.

We will miss this direct selling legend.

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The Makings of a Modern Compensation Plan for a Direct Sales Company

In April, I shared with you my thoughts on The Makings of a Modern Marketing Team for a Direct Sales Company. As so many areas of direct sales has shifted over the last 10 years, in light of both changes in direct sales as well as around direct sales, it is imperative that members of the corporate team, those who are stewards of the brand and the model, proactively shift components of the business to keep up, if not stay ahead.

But marketing is not the only area that deserves our attention here. In fact, while my firm, Strategic Choice Partners, has always worked with direct sales companies to create or adjust their compensation plans, we’ve seen a massive increase in both the number of companies and the breadth of changes requested over the last 18 months.

This makes sense, of course. The regulatory environment alone is requiring every company to take a hard look at the structure of how it pays compensation. There’s no need for me to go into those details here; plenty has been written about it already. I will say that I have been a tad surprised at the lack of urgency that most companies have had in making what appear to be obvious updates in their plans in light of these new regulatory insights.

Beyond these regulatory changes, however, is an even bigger question that seems to be at the top of every executive’s mind, either consciously or subconsciously, when it comes to thinking about compensation plans. That question is this: “What exactly am I paying for?”

It’s a simple but extremely profound question. And it is of utmost importance when working through any updates to your compensation plan. If you aren’t clear on what you’re paying for (and what you’re not), then you’ll never really be clear on what your compensation plan needs to accomplish.

As I mentioned in my Annual Checkup for 2021: “As direct sales companies continue to dish out 40%+ in commissions, they find themselves asking a very important question: “What am I getting in return for that 40%?” The expenses and responsibilities of the home office in today’s direct sales landscape is much more involved than in decades past, and yet the payout of the compensation plan in most cases has not been adjusted to account for those additional expenses. It makes for quite a tight margin!”

So, what are you paying all of your commissions for? Are you leaning on Distributors to acquire new Customers, and let the corporate office do the rest? Are you leaning on Distributors to do much more? Are Distributors your primary marketing channel, or are you having to invest more in things like online advertising, influencer outreach and video production?

Here’s the fundamental thought: If you’re still paying a 1990s compensation plan for a 2021 deliverable, you’re probably finding it very hard to finance “all the other stuff” that the corporate office has to do now.

With the rest of this article, I want to merely skim the surface of a few areas that are becoming bigger and bigger parts of compensation plan design today. It’s not intended to be comprehensive. But as I’ve had conversations with so many executives over the last few months, I’ve noticed these areas and ideas always seem to resonate with them most.

1. Your Preferred Customer Program

A Preferred Customer program is nothing new in direct sales. That said, many companies (especially 10+ year-old network marketing companies) are still struggling to find the right fit in this area. This struggle is due mostly to the hope that a simple Preferred Customer program can be incorporated without impacting much of the rest of your compensation plan.

This, of course, is futile. On the one hand, to create a Preferred Customer program that doesn’t require some other shifts in your compensation plan creates a Preferred Customer program that no customer actually prefers. If we prioritize keeping our comp structure in place, paying out the way it does, hoping we can just add this new component, then it’s extremely difficult to a) create a program that’s attractive to a Customer while b) incorporating compensation components that are attractive to the Distributor for obtaining Preferred Customers.

If the last two years have taught us anything, it is that we must prioritize the Customer. The modern comp plan needs to start with putting together the best offer for your Customers, and appropriately attractive compensation for those who find and serve those Customers. Figure that out, and try to work your way out from there.

2. Your “Hourly Rate”

Compensation plans don’t pay by the hour, but the normal Distributor is certainly going to think in those terms. In a world where gigs are abundant and easy for anyone to tap into, and where time and attention are more precious than they’ve ever been, a direct selling opportunity must prove (quickly) that it’s worth someone’s time to become a Distributor.

On average, what does someone make per hour spent sharing your products with new and prospective Customers? In our experience, reaching a rate of $30/hr. is a great target.

This doesn’t need to be an exact algorithm, but rather just simple, back-of-the-napkin math. If you’re a party plan company that offers 25% retail commissions, and the time spent to prep for, present and close out a party is 4 hours, and the typical sales of that party is $400, then your Distributor essentially earns $25/hr ($100 earned for 4 hours of work). Not bad, but you may want to consider a) raising your commissions to 30%, b) finding ways to increase the average party size or c) decreasing the time needed to conduct a party.

For a more one-to-one approach, if your company offers 25% retail commissions, and the time it takes for someone to post a live-streamed video to show your products takes about one hour total, and they sell $150 worth of product during that time, then that’s $37.50/hr.

As you can see, so much impacts the earnings per hour beyond just your retail commission rate. As my partner Alan Luce explained in his most recent article, “Added to what the companies are doing, existing sellers and potential direct selling candidates have discovered that selling online, rather than using the traditional face to face techniques, is actually more profitable than the old system.”

Dig into what this hourly rate could be for your company, and across the different selling scenarios.

3. Compensation Isn’t Just Commissions

One of more refreshing components of modern compensation plan design is recognizing that not all people are actually motivated by money alone. In fact, given that the vast majority of Distributors don’t expect their direct selling opportunity to provide anything close to a full-time income, we can sometimes find ourselves increasing compensation in ways that actually doesn’t resonate best with our constituents.

Many companies are starting to incorporate very creative loyalty and/or rewards programs that operate outside of/alongside the compensation plan. In some cases, these programs are only for Customers. In other cases, they include Distributors, too. Regardless, these programs offer all kinds of fun ways to earn discounts and credits toward product purchases, among other things. I’ve been involved in a few of these programs, and I can tell you, if done correctly, they can provide a very powerful motivation for otherwise overlooked Customers and Distributors, and a powerful lever for the corporate team to access as needed.

And a quick side note here: for party plan companies, the most common concern I hear is with Hostess programs. Namely, more and more, hostess programs are being used by Distributors to collect orders. While this isn’t “wrong,” it’s certainly not why the Hostess program was created. In its purest form, a Hostess program is a very rewarding referral program. Your Distributors have likely found very creative ways to take advantage of this program. This is all fine, but when you realize how much you’re paying out in Hostess Rewards, you want to make sure this is actually getting you maximum referrals. This has led many companies to consider incorporating a broader Rewards program instead. It’s worth looking into.

4. Learn from Affiliate Marketing

I think direct sales offers a much better overall platform than traditional affiliate marketing. That said, I believe we can learn so much from affiliate marketing programs. And the modern compensation plan design will look more and more like a multi-tiered affiliate marketing program than a traditional direct sales program.

I won’t go into all the details and differences of affiliate marketing, but I believe there’s a space between traditional direct selling and “traditional” affiliate marketing that represents the future of our industry. On the one hand, direct selling provides a community and culture that brands crave to have and customers love to be a part of. Ultimately, this is what everyone loves when they look at the companies within the direct sales channel. Relatively speaking, our compensation plans are massively more lucrative than affiliate marketing programs.

That said, affiliate marketing is simple, and proves that commissions probably don’t need to be so lucrative. Affiliate marketing is asking for help with brand awareness and customer acquisition, and that’s about it. The company will take it from there. So their commissions and rewards align with that.

Several direct sales companies have added and Affiliate level to their programs over the past few years. While I think this is a step in the right direction, we must get away from simply adding on components while ignoring the rest of the program. The modern direct sales compensation plan (and overall program) needs to be attractive to an affiliate marketer, and also to existing Distributors to acquire new affiliates. This requires a holistic look at your plan.

5. Plans Are Getting Flatter (Not Fatter)

The real hallmark of the modern direct sales compensation plan is that most plans are getting flatter. “Flatter” can mean a lot of different things, but it generally refers to plans not paying out on as many downline levels, and/or plans not paying quite so much to the very top leaders over time.

This trend is typically what stops 10-year-old+ companies in their tracks. And that’s mostly because the field leaders that have their ears the most are the leaders at the highest levels of the plan. I have a completely separate article on that I’ll share at a later time ;-).

Simply put, with a compensation plan, you get what you pay for. As any of us with any corporate experience can attest to, the field has uncanny ways of showing us what we’re really paying for, and you can’t blame them for that. But as stewards of the company, our responsibility is to help stabilize the company, and grow the company. This normally occurs at the lower to middle parts of our “plan”. Which is why the modern plan will be a little flatter than what we’ve been used to.

Especially when a company is experiencing a decline in sales, it is very common to introduce new bonuses, new levels or new compensation plan elements to motivate your top leaders, thinking these All-Stars, if they could just give a little more, will help make things right. This very rarely works. The reason it rarely works is because there’s only so much more your All-Stars can give you, incrementally speaking. They already give so much. And while it may be natural for them to want a bigger slice of a shrinking pie, your job is to increase the size of the pie.

Don’t look for ways to make the top levels of your plan fatter. Look for ways to motivate the new Distributor, the new Customer and the young leader. Not only will it help the company overall, but the fact that the pie is getting bigger will actually reward your top leaders more than anything else you could come up with.

6. Simplicity

The modern direct sales compensation plan will be more committed to simplicity that ever before. We’ve touted the importance of simplicity in our industry for a long time, but few companies have really made it happen. Sadly, is a running and well-known joke that compensation plans are too confusing. We laugh about it, and then we do nothing about it.

But the modern company won’t just talk about it. They will build plans that are simple and straightforward. New companies have the advantage of starting from scratch to make this happen. Existing companies have a tougher job, having to morph their existing plans into a more streamlined model. But the innovative ones will do it, no matter how hard it is.

For a plan to be truly simple, a company cannot start their plan design with figuring out how someone can make $500k per year, and then work your way down. The modern plan also won’t be as concerned with creating massive income for its top producers. Don’t get me wrong: There will still be plenty of high incomes with the modern plan design, but that will be because the sales volume warrants it, not because of “17 ways to earn income” and infinity bonuses and the like.

There are so many other intricacies and ideas that constitute a modern direct sales compensation plan. I’m sure many of you have incorporated some great improvements into your own plan over the last few years. I’d love for you to share them in the comments.

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Alan is a US DSA Hall of Famer and a member of the DSEF’s Circle of Honor. He’s served in executive roles at Tupperware, PartyLite, DK Family Learning and other companies, and has been a part of launching more than 30 direct selling companies over his career.

Working Through a World of Misinformation

It’s everywhere. Misinformation now permeates nearly every aspect of our lives. Fake news, fantastical conspiracy theories and out and out lies spread through social media and cable personalities who are have learned that they can make a lot of money propagandizing every conspiracy theory that will play well to their audience. Spreading misinformation is much more profitable than telling the truth based on provable facts and reliable data.

This toxic atmosphere leaves those of us looking to make decisions about our lives and our businesses based on facts, truth and reason in a constant and energy sapping search for answers.

Dealing with misinformation, whether spread through ignorance or intent to mislead is nothing new for those of us who have spent our careers in direct selling. For years, the critics of our industry have offered up ill-informed opinions that express a negative opinion about direct selling as an income opportunity. Too often these negative opinions are based on incomplete data combined with individual anecdotes of dissatisfied former sellers that the propagators of the misinformation then apply to the whole industry.

Now before we go any further, it is important to note that in some cases the criticism is fully justified and factually supported. Like any industry, direst selling has had its share of bad actors who use dubious and misleading recruiting pitches and other types of unethical practices that attract regulatory attention and deserved to be condemned. But too often the industry critics assume that the entire industry is guilty of the perpetrating the same bad practices.

What is not, or is rarely, acknowledged is that there are many, if not most, direct selling companies that have provided part and full-time income opportunities for decades without a single blemish on their record or regulatory action against them. Many of these companies sell products that have become will known brands with thousands of loyal customers. The undeniable fact is that the ethical companies who follow industry best practices far outnumber the bad actors but you almost never hear about that from the industry critics.

So, back to some of the current and most egregious misinformation that is spread on social media are addressed in what follows:

1. Direct selling is in decline as a business model and has falling sales revenue.

The facts just do not support that conclusion in any way. Almost every public direct selling company has reported double digit sales and or revenue growth for the first quarter of 2021. Likewise, the privately held direct selling companies that are clients of Strategic Choice Partners all have reported that 2020 was a great year for sales growth and increases in the number of people selling their products and services. The annual Direct Selling Association review of industry performance has yet to publish for 2020 as the information is still being compiled, but all the early indications are that 2020 was a banner year for the industry.

The only possible conclusion based upon facts supported by credible data is that the direct selling model is doing well in this market environment.

2. Direct selling is behind the times and not suited to compete in today’s virtual economy.

Again, the facts say otherwise. In no small part direct selling has enjoyed growth has had strong growth because the companies and their sales forces were quickly able to move to using virtual platforms rather than the traditional face to face sales presentation. The companies quickly industry pivoted to providing online catalogs, product demonstration videos and order processing systems that could be used on both smart phones as well as desk top and tablet computers. The industry used its flexibility and resourcefulness to provide their sellers with all the tools to successfully conduct their sales of products and services on line and the sales forces responded by growing in numbers and productivity.

3. Direct selling cannot compete with the plethora of new gig income opportunities.

It is true that the many new gig opportunities create a large and growing category of competitors for people to represent and sell our products and services. But, as the facts about the industry growth prove, so far direct sellers are competing quite successfully. Here are just some of the things that companies are doing to improve the competitiveness of their part-time income opportunity:

• Companies have been reducing the cost of joining the business and making the enrollment process much easier and capable of being quickly and easily completed on line from smart phones.
• Companies are quickly shifting the publishing of needed business information to being delivered to smart phones to ensure that the needed information is quickly and accurately published.
• Many companies have undertaken projects to amend the compensation plans to make part-time retailing more profitable than it may have been in the past.
• Most companies are reviewing their entire sales system with a goal of making their marketing and sales programs more customer centric and focused on retail sales.

Added to what the companies are doing, existing sellers and potential direct selling candidates have discovered that selling online, rather than using the traditional face to face techniques, is actually more profitable than the old system. As online sellers they do not need to cover car expenses, lose the time to drive to and from an appointment and other expenses such as child care if a single Mom is engaged in the direct selling business. It turns out that the dollars earned for time spent is actually greater as online sellers. And, being an online seller for a direct selling company is safer than the traditional business. That they do not have to leave the security of their home is an important reason for single Moms to choose direct selling over other gig opportunities.

For more about the gig economy, I highly recommend the recently published book entitled The Ultimate Gig. This book and the related service and updates that the author will publish is must reading for all direct selling executives.

These are just three types of misinformation floating around in the social media realm. Each of these false claims can be easily debunked by simply looking at the actual facts and data. But to really combat misinformation nonsense direct sellers must become engaged by challenging these false claims with the facts and truth. We need senior executives to speak out telling the true story of our direct selling model. No responsible person will claim that direct selling is perfect as it is. There will always be places where we can improve and will have to change to meet evolving market trends. But the truth is mostly on our side. Direct selling has a good story to tell. We need everyone in the business to help tell that story on line and in other communications formats.

Speak up folks!

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Alan Luce: John Fleming has been one of direct selling’s most consistent and strongest advocates over a great many years. The March issue of Direct Selling News lists John as a “Direct Selling Legend”. Most importantly, John is a personal friend, and I have had the pleasure of being a contributor to his most recent work: Ultimate Gig, published by Emerald Publishing, U.K., which is being released March 25, 2021. The book will be available via Amazon U.K., Amazon U.S., and the Emerald Publishing Bookstore. Ultimate Gig is the most recent, in-depth look at the gig economy’s incredible growth and appeal in mature markets throughout the world.

John, thank you for joining me for this interview. My key questions are: What does the book say about the role direct selling/network marketing plays in the broader gig economy phenomenon? And, what motivated you to do the study, research and writing that goes into publishing a book with a major global publisher?

John Fleming: Alan, first of all, I wish to thank you and Hakki Ozmorali for the opportunity to share thoughts with this audience.

I became motivated to embrace this work because I have been involved directly and indirectly for quite some time. When executed well, there is no other business model quite like direct selling.

People from all walks of life can participate in a channel of distribution in which all of the stakeholders win. The customer receives excellent products and services and also benefits from the intermediary – the direct seller, adding personal experiences to the marketing and promotion of the products or services. The direct sellers benefit from an income-earning opportunity based upon customer acquisition, retention, and sharing with others how they too can become direct sellers and benefit from doing what I just described. The provider of the opportunity to be part of the channel of distribution – the direct selling company, benefits by being able to build a brand based upon the personal experiences of those who engage the brand.

Alan: John, tell us more about what motivated you to do this work and what we can expect.

John: I created the Ultimate Gig Project and embraced the work required to write the book because I observed the gig economy exploding throughout mature markets all over the world while the direct selling model, overall, had been experiencing a flat to shrinking year-over-year growth rate since 2015.

Technology changed the game. We are evolving from the industrial economy model to a digital economy where more can be accomplished with less. Complexity is being reduced to simplicity. The gig economy has explored and executed upon the preceding faster and very effectively!

We have more choices in terms of how work can be done efficiently. The gig economy is showing us how “underutilized assets” and “underutilized time” can be converted into income-earning opportunities. Micro-enterprise opportunities and opportunities associated with being an independent contractor have never been greater, and I wanted to tell a story that needed to be told.

Overall, the direct selling model has not kept pace with the growth and utilization of digital platforms in a new digital economy. However, the direct selling model is quickly catching up. The unique attributes of the model will become even stronger than ever before.

Ultimate Gig is inclusive of the role direct selling plays. We interviewed four C-level executives who are leading a phenomenal transformation within their companies. However, the book is about much more. The book is about the future, the changing definition of the word “work,” the importance of flexibility and freedom in how work can be done, inclusive of when and where the work is done, plus more. The gig economy is unleashing uncommon freedoms relative to work opportunities, and direct selling companies will certainly play a growing and even more significant role from my perspective!

Regardless of how one may be participating in any form of microenterprise, I truly believe the book will add value to their thinking about their goals and objectives. The reader will learn a lot about the gig economy. As an adjunct to the book, we also created and are sharing five digital assets — our Ultimate Gig Resources — that we developed during our study and research. It’s hard to believe, but we have been working on the Ultimate Gig Project for approximately three years. Ultimate Gig Resources, via a one-time subscription, is now available through our website.

Alan: I recommend the book as a must-read for all of us who have embraced the direct selling/network marketing channel of distribution. The resources you created for the one-time subscription are also fascinating and valuable. Most authors do not share their assets in this manner.

As we continue our march into the future, the labels will not mean as much as what we do with our models and how we position our models to be considered the ultimate form of gig work. John is quick to remind us that his work is not about direct selling; it is about the gig economy. However, he is also quick to remind us that the direct selling channel of distribution had to be included in a significant manner because it is probably the original form of gig work.

Thank you, John, for your time and for providing this message for world of direct selling.

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Your 5-Step Annual Checkup for 2021

Happy New Year, everyone!

In years past, I’ve shared my resolutions for direct selling around this time of year. That’s always been fun; you can read my resolutions for 2017 and 2019 here. I didn’t make any resolutions for 2020 (Thank goodness, who would’ve seen that coming!), but I did summarize the top marketing challenges based on some time spent with colleagues in the industry, which you can read here.

I think it’s fun to look back on these looks ahead, if for no other reason than to see what still hasn’t changed, or, hopefully what seems like “old news” because we actually did do something about it.

This year, I think 2021 deserves a different approach. So, rather than taking the resolutions route, I wanted to take more of an “annual checkup” approach. Let’s face it, after 2020, we could all use an annual checkup!

And while any checkup could consist of all kinds of tests and components, I feel like there are five areas in 2021 that especially require our attention.

1. Your New Distributor Onboarding Journey

This is one of those things that needs to be a part of every annual checkup. But I think it’s especially needed in 2021. You may have put off some necessary updates in 2020 as you waited for things to shake out. Now, even though the shaking isn’t over yet, I think we have a much better idea of what may phase out in time and what changes in how we do business are here to stay.

So, when a new distributor joins your company, how do those first 30 days look for them? For most companies, this starts with a) a Welcome kit, b) an automated email sequence of 7-15 messages, c) a specific section in your back office for new distributor training and d) possibly an app or third-party tool used for training and communication.

I’ve harped on this area for years, and so have others. This previous WDS article from Daryl Wurzbacher offers some great thought-starters when it comes to your onboarding process.

The first question to ask yourself is this one: Do we have a “New Distributor Onboarding Journey” in place already? My hope is you do, but if not, congratulations: you just identified 2021’s top priority for your company ;-).

Assuming you do have some form of New Distributor Onboarding Journey in place, pull it altogether so you can review the entire process holistically. Here are some questions to ask yourself to help frame the proper review of everything you have:

• What portions of the current content is incorrect/no longer valid?
• What’s wrong about the tone/voice?
• What’s missing? Are you not talking about a certain product enough? Maybe a sales tool, or a web page? Maybe a new technique or training?
• Who’s missing? Are there corporate staff members that should be featured more? New field leaders? Maybe you highlighted a third party before that you don’t need to feature anymore.
• Is the pace right? Are they receiving the right messages at the right time and in the right order?
• What do the analytics say? What are the open and click-through rates on your emails? What % of all new distributors opened all emails? Half of the emails? None of the emails? On web pages, how many visits did they get? Are there certain videos or elements that seem to get more attention than others?
• Are you looking at the analytics regularly? Are they set up correctly?
• What new techniques or channels should you consider? Maybe a customized audience in Facebook? Or a Facebook Group for new consultants? Texting? Weekly webinars?
• How can you better equip your leaders who sponsor these new distributors to get more involved in the onboarding process?
• How quickly can you address all of this? This new and improved onboarding approach you’re planning does no one any good until it’s launched. So, if this isn’t something you can crank out ASAP, who can you hand it over to for help?

You can never give your onboarding journey too much attention. We work so hard to get new distributors to join our business. Put the same effort (or more) into crafting an experience that makes them glad they made the decision, and helps them succeed in finding new customers and sharing more products.

2. Your Shipping & Distribution

Above all else, I believe 2021 is going to be the year where your efficiencies and performance in distribution could make or break you.

Possibly more than anything else, 2020 accelerated the adoption of online shopping and exponentially increased the number of packages we all receive at our doorstep each week. It almost “broke the entire system! (Anyone still waiting on a Christmas item to deliver?)

And yet, while shipping volume increases, we’re also seeing costs increase, and by quite a bit. My colleague Rich Harkey recently shared some areas to keep an eye on in his November 2020 article “3 Ways to Best Prepare for Increased Distribution Costs in 2021.” Most of us just accept our shipping costs as an expense we cannot control. The details behind what we’re charged can be confusing. But if you don’t dig into those details, you could find yourself falling behind with a customer base that demands fast and cheap shipping.

Here are just a few questions to ask yourself as you take a good look at your distribution operation:

• What was your average cost per shipment in 2020? Was it more or less than previous years?
• What was your average fee to customers for shipments in 2020? Was that more or less than previous years?
• Do you understand the details behind every fee in your bill?
• How well would you rate your distribution operation? In receiving orders? In packing? In timely shipping?
• Do you use a third-party distribution warehouse? Should you consider it? Should you consider a new one?
• Are there new ways to shave a few pennies on shipments in certain areas?
• When is the last time you negotiated your shipping costs with your carriers? Are you due for another discussion?

My expertise is not distribution and logistics, and it may not be yours, either. So it’s easy to just let someone else deal with it. But your shipping costs impact every single order that leaves the building. So it’s important. Find someone who knows how to get to the bottom line on your shipping expenses, and who can guide you through the process of getting more efficient in this area.

3. Your Online Analytics

I’ve personally worked with almost 100 different direct selling companies over the last seven years, and I can think of only one that has set up their website analytics properly, and actually uses that data to impact their business. Only one!!

“Online analytics” can mean a lot of different things, so I’ll narrow it down a bit. We’re talking about properly installing, setting up and reviewing your Google Analytics, as well as installing social tracking elements like the Facebook pixel to your website. You could probably include email analytics in this, too. There is not only a world of data waiting for you to uncover, but also a world of targeting opportunities waiting for you, that could make the difference in having an up year or a down year.

My experience has shown me that everyone wants to do this better, but they never get around to doing it. The problem with that is this data you gain grows exponentially more powerful the longer you’re gathering it. So it’s imperative that you get it set up the right way right away. You can see in this November 2020 article on Amway’s new CTO  that it’s a challenge that escapes no one, no matter how big or small you may be.

Simply having Google Analytics installed on your site isn’t enough. Most people don’t have it installed correctly or optimally, which means they are either getting faulty data or they are missing out on data. In addition, adding the Facebook pixel and other tracking elements to your site is something you should do even if you have no plans to use it currently. One day you will, and you’ll be glad you’ve already been tracking the data, rather than having to start from scratch.

Here are some questions to walk you through your annual analytics checkup:

• Do you have Google Analytics installed on your site? How confident are you that it’s installed correctly?
• How often do you or someone on your team review your website analytics? Should this be given more regular attention?
• Is the Facebook pixel installed on your site? Should you consider other tracking pixels?
• How often do you review your email analytics?
• How are you intentionally using these analytics to improve your marketing efforts? Your sales efforts?
• Is your tracking set up correctly to account for your replicated sites? (This is a big one; sometimes replicated sites can make it very difficult to accurately measure data if they aren’t tested and set up correctly).
• Are you using tools like Google Tag Manager and Google Search Console?
• Are you keeping up with the ongoing updates and capabilities of these platforms?

The beauty of the digital world is that you can track just about anything, and a lot of it is free. Most of us simply aren’t taking advantage of it all.

2020 accelerated adoption of ecommerce, so we must rush to catch up in running a top-notch ecommerce operation.

4. Your Events

If there’s anything we direct sellers know how to do, it’s how to throw a great event. And yet 2020 certainly challenged us in this most comfortable of all comfort zones. Some companies embraced the challenge, and others fell a bit short.

The good news, if you want to look at it that way, is the opportunity to embrace the challenge is sticking around through 2021!

As we all came to grips with “virtual events” in 2020, we also learned that “virtual events” can mean a lot of different things. Hopefully your trial and error in 2020 gave you some experience in what works best for your company. Is it a truly live event? Or do you produce the event prior and stream it live? Do you use Zoom or Facebook Live, or something else?

We probably all have our preferences based on our experiences this past year. And let’s not forget that in-person events will hopefully back on the table to some degree for most of us later this year. But… I think we all can agree that the future will be much more of a hybrid approach of virtual and in-person events, well beyond 2021.

So, here are some thought-provoking questions to get you going on your annual checkup for your events:

• What went really well in 2020 with our events?
• What did not go well in 2020 with our events?
• What is our preferred virtual event approach?
• What approach have we seen other companies use that we should check out?
• Should we increase the number of events this year, or decrease?
• Are we going to have an in-person event this year?
• What investments in equipment or software do we need to make? Or sales tools?
• What is our event calendar for this year?
• Who can we reach out to for some help or insights?
• How can we equip our sales force to conduct better online events?

5. Your Compensation Plan

More than any other year that I can remember, companies are taking a hard look at updating their compensation plan in fairly significant ways. Some of these updates continue to be driven by changes prompted by the quickly evolving regulatory environment. Most are wanting to look at an update to simply get more bang for their buck.

As direct sales companies continue to dish out 40%+ in commissions, they find themselves asking a very important question: “What am I getting in return for that 40%?” The expenses and responsibilities of the home office in today’s direct sales landscape is much more involved than in decades past, and yet the payout of the compensation plan in most cases has not been adjusted to account for those additional expenses. It makes for quite a tight margin!

More than anything, companies are interested in two things right now: 1) How do we increase customer acquisition, which then leads to… 2) How can I continue to pay so much to my top leaders when customer acquisition typically occurs at a much lower level in my distributor hierarchy?

It’s a tough nut to crack, and the answer is always “It depends.” But the questions are the right ones to be asking. Here are a few more worth your time:

• What percent was our commissions payout in 2020? Was it more or less than years’ past?
• What percent were other elements of our payout (like promotions and incentives)? More or less than years’ past?
• What’s the breakdown of payout to top tier, middle tier and lower tier of my Distributors? Does the activity as it relates to the payout for each tier align with our strategy for growth?
• What is the home office spending on lead generation (for customers or distributors)? What percent of total revenue does this account for?
• How well does your plan allow a new distributor to earn $500 a month on sales to new customers?
• Do you have customer programs in place, like a preferred customer discount, or a loyalty program? Should you? Are the ones you have working?
• Do you have a “Hostess Program”? Is it working the way it’s intended?
• Overall, as you look at the different components of your plan, do they incentivize and instigate the behavior that is actually going to make a difference for your company? Could there be better ways to invest that payout than how you are now?

My partner Alan Luce recently share some thoughts on creating a more retail-centric plan toward the end of his article Lessons from the Lockdown, Part 3. This is definitely worth five minutes of your time.

Overall, it’s a fundamental question you’ll ask over and over again when it comes to your compensation plan: Is this juice worth the squeeze? And … does it allow for us to keep going and growing for years to come?

There are so many other things worthy of your attention as you kick off this new year, but I heartily believe that these five areas mentioned above deserve everyone’s attention in 2021. The times they are a-changin‘, and the winners will be those who are the most agile in their adjustments.

What areas do you feel should be included in your 2021 Annual Checkup?

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This week’s article is a collection of industry news that stood out in 2020. It was most certainly a challenging year for the industry, yet we know there were positives alongside with all the negatives.

Also included are articles from The World of Direct Selling that attracted much interest last year.

> The Future of a Natura-Avon Powerhouse?
> Stella & Dot Puts Focus on Ambassadors by Merging Its Three Brands
> Rodan + Fields Lays off 86 Employees, 15% of Its Staff
> Amway Sued by Independent Business Owner Claiming Employee Status
> Nearly 7,000 Convene for Mary Kay’s Annual Leadership Conference
> Isagenix Acquires Zija International
> Rick Goings to Retire from the Board of Tupperware

Most-Read Article in January on The World of Direct Selling:
Here is Direct Selling in Canada, Folks! (Hakki Ozmorali)

> USANA Reports $1.061B Sales in 2019, Down 11% vs. Previous Year
> Brazil DSA to Celebrate 40th Anniversary in 2020
> Nu Skin Reports $2.4 Billion Revenue in 2019, Down 10%
> Jeunesse Reaches Annual Sales of $1 Billion for Fifth Consecutive Year
> Oriflame Reports 2% Sales Decrease in 2019
> Herbalife Notches $4.9 Billion in Annual Sales Despite Hit in China
> Amway’s 2019 Sales Down 5%
> Medifast Reports $714M Revenue in 2019, Up 42%

Most-Read Article in February on The World of Direct Selling:
Trust and Communication: The Foundation of Success in Direct Sales (Brett Duncan)

> Industry Advocate Jeff Babener Passes Away
> Natura Reports Modest Q4 Profit, Weighed by Avon Acquisition Costs
> Mary Kay Pulls Out of Australia and New Zealand
> QNet Fires Over 400 Reps in 20 Countries
> Tupperware Appoints Miguel Fernandez as CEO, and Rich Goudis as Chairman
> US DSA Calls for Measures to Ensure Accurate Product Claims
> Industry Veteran John Agwunobi Assumes New Role as Herbalife CEO

Most-Read Article in March on The World of Direct Selling:
Five Key Insights from New DSA & Ipsos Consumer Attitudes & Entrepreneurship Study (Ben Gamse)

> Tupperware Announces New Organization Focused on Long-Term Growth
> US Cosmetics Market Experiences Sharpest Decline in 60 Years
> Stella & Dot CEO Jessica Herrin on Managing During the COVID-19 Crisis
> US Cosmetics Market Experiences Sharpest Decline in 60 Years
> COVID-19: Tupperware-Style Parties Drive Sales for DTC Sector
> FTC Sends Warning Letters to Direct Selling Companies
> Mary Kay Commits Nearly $10 Million to Global COVID-19 Support

Most-Read Article in April on The World of Direct Selling:
Lessons from the Lockdown (Alan Luce)

> WFDSA Chairman Magnus Brannstorm Addresses Global Direct Selling Community (video)
> CEO of Plexus Forgoes Salary to Award Bonuses to Employees
> More Canadians Becoming Entrepreneurs Amid ‘Direct Selling Movement’
> Lessons Learned During Chinese Regulatory Crackdown Help Nu Skin Weather Crisis
> 192 Million Customer Records Leaked by Natura &Co, 90% Brazilian Customers
> The Future of Retail Is Social

Most-Read Article in May on The World of Direct Selling:
Mixed Growth Performances in the First Quarter (Hakki Ozmorali)

> US DSA Releases Results from 2020 Growth & Outlook Survey
> FTC Sends Second Round of Warning Letters to MLM Companies
> How COVID-19 Has Sparked a ‘New Normal’ in the Health and Wellness Industry
> Avon Suffers ‘Cyber Incident’ Weeks After Major Data Breach at Natura
> Amway Establishes East Beauty Center of Excellence in South Korea
> 7 Predictions for How Coronavirus Will Change Retail in the Future
> Nearly 20,000 Attend Plexus Worldwide 20/20 Vision Virtual Convention

Most-Read Article in June on The World of Direct Selling:
Executive Q&A: Angela Cretu, CEO of Avon

> WFDSA Announces 2019 Global Direct Selling Industry Statistics
> Direct Selling Self-Regulatory Council Issues New Guidance on Earnings Claims in the US
> New Avon Announces Over $16 Million in Product Donations
> Pampered Chef Ex-CEO Tracy Britt Cool Takes a Stake in Thirty-One Gifts
> Direct Selling Continues to Grow in the EU in 2019
> Natura’s Asian Debut
> NewAge Agrees to Combine with ARIIX and Four Other Companies
> USANA Notches Sales Gain Despite Pandemic Disruptions

Most-Read Article in July on The World of Direct Selling:
Global Direct Selling Industry in 2019 (Hakki Ozmorali)

> Longaberger Baskets Selling Again, with Daughters Tami, Rachel Involved
> MONAT Ranks #653 on the 2020 List of Inc. 5000
> Mary Kay Ash Named Among USA TODAY’s ‘Women of the Century’
> Herbalife Agrees to Pay Over $122 Million to Resolve Corrupt Practices Case in China
> Isagenix Co-Founders, Shareholders Invest $35 Million to Foster Growth
> Nu Skin Invests $53 Million in New Production Facility in China
> How Lorraine Lea Reinvented Party Plan Selling for the Digital Age
> Tech for Health – Amway on Its Big Tech, Social Commerce, Big Data Ambitions

Most-Read Article in August on The World of Direct Selling:
A Glance at the Direct Sales Industry in Mid-2020 (Hakki Ozmorali)

> Laure Alexandre Appointed as Executive Director of Seldia
> Nature’s Sunshine Announces Company Transformation with New Business Model Launch
> Court Dismisses Neora’s Declaratory Judgement Suit Against FTC
> Avon’s Makeover: Five Things You Didn’t Know About the New Visual Identity
> Covid-19 Pandemic Gives Major Boost to E-Commerce
> WFDSA Releases 2019-2020 Annual Report
> Isagenix Names Sharon Walsh as New CEO
> Shaklee CEO Roger Barnett WFDSA’s New Chairman

Most-Read Article in September on The World of Direct Selling:
Mobile Messaging Best Practices for Direct Sellers (Vince Han)

> Message from WFDSA Outgoing Chairman Magnus Brannstrom (Video)
> Herbalife CEO Sees ‘Dramatic’ Demand Growth (Video)
> Ruby Ribbon Bolsters Management Ranks with Hiring of COO/CFO and CMO
> A Wrinkle in Time: Why Rodan+Fields’ Founders Lost Their Billionaire Status
> Natura Among Fortune’s World’s 25 Best Multinational Workplaces
> Melaleuca Turns 35
> Tupperware Profits and Shares Soar as More People Are Eating at Home
> Turkish Direct Seller Farmasi Plans to Build $25 Million Distribution Center in Miami
> Gig Economy and Micro-Entrepreneurship Are on the Rise, but Are We Ready to Manage That Successfully?

Most-Read Article in October on The World of Direct Selling:
The Joy and Pain of New Opportunities (Ben Woodward)

> Pampered Chef Continues International Expansion with Addition of France
> Kristi Hubbard Assumes CEO Role at Younique
> Natura &Co Significantly Outperforms Global Beauty Market with Strong Sales Growth
> NewAge and ARIIX Close Merger
> Youngevity Receives Notice of NASDAQ Delisting Due to Non-Compliance
> Direct Selling Could Be a Key Driver of Inclusive Economic Growth in South Africa
> In 2020, Beauty Is More Digital, More Hygiene-Focused and at Home
> From Turnover Point of View, We Are Already Back to Pre-Covid Levels: Oriflame VP Frederic Widell

Most-Read Article in November on The World of Direct Selling:
5 Essential Lessons on Success I Have Learned from Clients (Daryl Wurzbacher)

> Seldia Announces Winners of 2020 Astra Awards
> US Direct Selling Association Announces 2020 Award Winners and 25 Largest Companies
> Canada DSA Announces 2020 Award Winners
> ‘Tupperware-Style’ Retail Sees 45% Growth in 2020 in UK
> FTC and Law Enforcement Partners Crack Down on Deceptive Income Schemes
> TikTok Is Banning MLMs and Other Content That Aims to Deceive People
> SeneGence: How a Beauty Company Is Making Real Connections in a Virtual World
> Mary Kay: The Beauty of Sustainable Packaging
> WorldVentures Voluntarily Files for Bankruptcy

Most-Read Article in December on The World of Direct Selling:
The Crucial Role of P&P Documents in Direct Selling (Hakki Ozmorali)

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