2021 is coming to a close in a few days… Just like 2020, 2021 was not an easy year and the difficulties are far from being over.
I wanted to find out how some of the prominent figures of the global direct sales industry view next year:
“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?”, I asked.
Their responses constituted a two-part article and I shared the first group’s comments in the first part. This week’s article comprises seven different insights. Feel free to add your comments at the end.
Dan Jensen, Compensation Plan Specialist, Founder of Dan Jensen Consulting,
“Things that do not change will remain the same… Never before in our industry has the need for improvement been so intense as we are forced to question traditional thinking. 2022 will be a wonderful year to think out of the box and ‘up our game’. I see a greater emphasis on customer acquisition, customer centered pricing strategies, more companies leading with unique product stories and fewer leading primarily with opportunity. These strategies are driving growth today and will continue to do so. Social media technologies and adoption will continue to improve. It will be a great year for our amazing industry.”
Robert Kreklewetz, Founding Partner of Millar Kreklewetz
“As we break out of the COVID haze that has slowed most of our economy and lives, our biggest threat will be intransigence. That is, a collective refusal to breakout of COVID-thinking (and frankly, COVID-panic). For many – and particularly in government – COVID has become a convenient excuse for restricting individual freedoms! But there is no reason now for border restrictions. And little reason for shutting down businesses, or reducing capacities. (For pro-vaxers, the COVID vaccines work! For anti-vaxers, they are unnecessary!) Either way, let’s get moving and get open! If we can bust out of the COVID-panic and get back to ‘life before COVID’, the sky is the limit for everyone, and for direct selling specifically!”
Brent Kugler, Partner at Scheef & Stone, LLP
“Companies in the U.S. face new regulatory uncertainty in 2022. After the Supreme Court’s unanimous decision in AMG Capital Management, the FTC adopted a new strategy utilizing the Penalty Enforcement Authority. In October 2021, FTC sent identical ‘notice of penalty offense’ letters to hundreds of MLM companies. These letters rely on decades-old FTC determinations of what constitutes an unfair or deceptive practice and are a statutory prerequisite to FTC seeking civil penalties of up to $43K per violation. Notably, the letters do not identify any specific conduct by a recipient company that the FTC views as illegal. This new strategy is problematic because it does not provide fair notice of alleged violations or due process before subjecting a company to significant civil penalties. It remains to be seen to what extent the FTC will rely on this new strategy but one thing is clear: The U.S. regulatory environment remains hostile towards the MLM industry.”
Peter Maddox, President of the Direct Sellers Association of Canada
“I see two important and related issues that will be central to the channel in 2022. Firstly, direct selling will continue to be an increasingly technology-driven business. The companies that will have the most success in 2022 and beyond are those that find optimal ways to marry the latest technology with direct selling’s unique feature, personal relationships. Related to this, a second major trend is the challenge of managing the exponential growth of messages that technology creates. With growing scrutiny from regulators and media, it is incredibly important that sales consultants, companies, suppliers and industry groups, like the DSA, work together to tell the true and positive story of the channel, no exaggeration necessary.”
Kevin Thompson, Partner and Co-Founder of Thompson Burton
“In 2022, we are going to see the Federal Trade Commission re-engage with the industry and test out its new toy. They recently resurrected the ‘Penalty Offense Authority’ that they intend on using to punish companies that they believe deliver false and misleading income claims to the public. Since we have yet to see the FTC use this approach, it’s largely unknown what these enforcement actions will look like. We are going to learn a lot more in 2022. Companies, sensing the change in the tide, will take compliance monitoring more seriously.”
Terrel Transtrum, President and Founder of ServiceQuest
“The supreme opportunity in the coming year will be found in the fundamental purpose of business: To create and keep a customer (Peter Drucker, 1909-2005). With the customer at the center of the direct sales model, distributors are more successful in finding and keeping customers, regulators move to greener pastures, and shareholder value skyrockets. The customer service imperative is next year’s frontier to conquer.”
Daryl Wurzbacher, CEO of ByDesign Technologies
“Data from Forbes shows 40% of employees from large companies would rather quit than return to the office and lose their flexibility. As the appeal of Direct Selling expands with affiliate and influencer marketing models, it’s going to be even more critical to focus on providing a truly turn-key experience for this new audience. In the past, highly motivated reps sought and secured their own tools for live video, social selling, and in-person selling. To win with this expanding audience, Corporate will need to identify the tools that make sense for their specific culture and product; and integrate them to make it easy to use for new inexperienced reps to sell products to anyone anywhere.”
We send our appreciation to everyone who contributed to this two-part article.
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