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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