NEW COMPETITION. NEW RULES. By Darren Jensen
NEW COMPETITION. NEW RULES.
By Darren Jensen, CEO LifeVantage
I’d like to begin this article with two statements that I believe best sum up the current state of direct sales.
I’m sure there will be many of you who agree with me. I’m also sure there will be just as many who will call me crazy. And you wouldn’t be the first.
1. Our industry is the absolute best version of entrepreneurial marketing that exists.
2. Our industry is currently in the business of going out of business.
Allow me to explain.
We give entrepreneurial-minded individuals an opportunity to start, grow, and scale a business that nobody else can come close to.
But if we are, indeed, the best form of entrepreneurialism out there, how can we possibly be in the business of going out of business? It’s because we’re not doing a very good job – strike that – we’re doing an awful job of keeping up with our competition. In fact, I’d go so far as to say that the competition is about to lap us. To be clear, the sky is not falling. Nor is the challenge unique to our industry. In order for us to overcome the challenge, however, we need to understand it and face it head on.
Let’s start with the competition. If I were to ask distributors or even some of the corporate executives in our industry who their biggest competitors are, they might point to some of the largest network marketing companies. This is fundamentally incorrect. Even worse, this assumption distracts us. It forces us to take our eye off the ball while the game around us continues.
Today we’re in a battle for the side hustle.
And our biggest competitors are the companies that are winning over the minds and attention of everyone out there wanting to make money on their own terms. I’m talking about Uber, Lyft, Airbnb, and Shopify to name a few. Even Amazon is getting into the game.
I know what a lot of people reading this article are thinking. Yes, we do offer individual compensation that dwarfs these companies, that’s true. But they offer scale and market caps that would drop our collective jaw. Uber began a mere nine years ago. Today the company has a $50 billion market cap. Lyft started three years later and has a $15 billion market cap. In comparison, the entire direct sales industry in North America has annual revenues of $39 billion – and that’s with a 100-year head start on Uber.
We can no longer use the excuse that operating under a direct selling model precludes us from following best business and marketing practices.
Because today, the best companies on earth are competing for the talent we need to survive. Here’s how I think we can go beyond surviving to actually thriving in this new market dynamic.
Focus on brand
Much of the direct sales industry suffers from a self-inflicted industry misperception that I call Bikinis and Lamborghinis. Many companies perpetuate a culture that focuses on greed and consumption that the majority of people find repugnant today. It turns the modern entrepreneur away. Other companies within our industry operate in the moral gray area. The problem is that the moral gray area attracts people with bad intent.
We must focus on building and maintaining a modern brand that attracts talent, gives customers a reason to believe, and exists in the sunlight of transparency.
Build incredible products
Companies within our industry like to say they have the best products. In fact, it’s a refrain used so often that it has lost its meaning. If those companies honestly have the best products in the world, why do they struggle selling those products outside of their distributor base?
Competing effectively today means building incredible products. Products that work. Products that are researched. Products that are validated. The true calling card of any great product is wide-ranging customer appeal. As we continue to get smarter about marketing as an industry, we need to pay a lot of attention to our actual customer sales numbers. They’re critical, but often they’re overlooked.
Put a premium on convenience
Nobody, and I mean nobody, ever said they didn’t use Uber or Lyft because it was too difficult. Both companies have given their drivers and customers a simple, convenient tool that requires basically no thinking and minimal effort. It simply works.
Now contrast that with our compensation plans. Think about all the steps, and legs, and different payouts, and complex enrollment processes, and ranks, and order volumes. Becoming a direct sales distributor should be simple. From our sales models and enrollment processes, to how our customers purchase, we must simplify everything we do. As a matter of fact, at my company, one of our mantras is to “make it as easy to operate a LifeVantage business as it is to order an Uber.”
The fact that direct sales has survived so long without embracing new technology is probably case in point to my first statement – that we’re the best version of entrepreneurial marketing that exists. Because if not, we’d probably be extinct.
Artificial intelligence and machine learning do much, much more than improve the customer experience – they can completely enhance the distributor experience as well. Uber, Lyft, and Airbnb do an incredible job pushing customers to their drivers and hosts – and they do it with a completely seamless experience. Thriving today means using new and emerging technology to remove the friction in all of our customer and distributor interactions.
At LifeVantage, we’re tripling our efforts when it comes to technology. But that’s a whole other article for a different time. I will say that it’s staggering what technology is allowing us to do.
As for right now, we all need to get smarter about marketing. That means improving our perception through branding efforts, making our companies simpler and more convenient, and developing real products that customers – not just distributors – want to buy. This isn’t new. This isn’t a radical approach. The best companies on earth are already doing it.
If joining our companies can become equally as attractive to entrepreneurs as Uber, Airbnb, Amazon, or Lyft, we won’t just survive – we’ll thrive like we never could have imagined before.
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