Direct selling has become an increasingly popular avenue for individuals to start their own businesses and earn income. To gain a comprehensive understanding of the perceptions surrounding direct selling, the Direct Sales Generational Engagement Study was conducted by Bridgehead Collective and carried out by The Center for Generational Kinetics, led by President Jason Dorsey.

In this first-of-its-kind study, Bridgehead Collective chose to partner with the Center for Generational Kinetics, which has led more than 100 research studies in all major industries. Their seminal annual study, The State of Gen Z, formed the basis for the best-selling book, ZConomy and has been consistently featured in national and global media including The Wall Street Journal, New York Times, CNN and many more.

I set out to discover America’s perceptions of entrepreneurship, the gig economy and—more pointedly—direct selling. Statistical significance was of ultimate importance in this analysis, so the study represents a wide-sweeping sample that is reflective of America, with an equitable mix of genders, demographics, employment status, education levels and location that allows for a 97 percent confidence level. This study aimed to explore the attitudes, motivations, limitations and beliefs about starting a business in America, as well as uncover perceptions of direct selling, recruiting strategies, onboarding methods, distributor retention and preferred payment structures.

We designed the study to provide actionable insights across 10 key categories:

• Perception of Industry and Channel
• Recruiting and Prospecting
• Motivations and Decision Criteria
• Onboarding and Getting Started
• Training
• Compensation and Value Proposition
• Recognition
• Incentive Trips and Events
• Retention
• Duplication and Role of Team Building

In this series, we will be digging deeper into each of these categories, focusing this month on Recruiting and Prospecting as well as Motivations and Decision Criteria. As we shared in last month’s issue, the news surrounding all generations is that their perception of our industry is actually far more positive than we sometimes think it is.

One Approach Does Not Fit All

An element that was a recurring theme in this study was how differently each generation responded to each key insight area. On one hand, that shouldn’t be surprising. However, I am struck by how often we, as an industry, tend to approach all prospects and distributors with one voice, one message, one point of view.

The data shows that a radically different approach is required. Each generation has distinct (and often competing) preferences, decision criterion and motivators. These differences were on full display when considering recruiting and prospecting.

The study took a comprehensive look at all facets of sponsoring including probing each generation for where, how, from whom and in what forum they wanted to hear about the earning opportunities that we provide.

We started first with finding out how comfortable each generation was learning about direct selling opportunities across a whole range of different scenarios. Options for them to rank included: a discussion with a friend or family member already involved; video or series of videos on YouTube; automated on-demand portal; group discussions; in-person meetings as well as several others.

Not surprisingly, the highest ranked selection with 74 percent of all generations choosing it as their top answer was learning about the business from someone they know already working it. BUT, coming in just one percentage point behind, was—wait for it—learning about the opportunity from a video or series of YouTube videos. When you isolate just Gen Z and Younger Millennials that increased to the top spot by a wide margin with over 85 percent of those generations indicating that was their preferred choice.

Action Item: Take a hard look at your YouTube channel. Don’t have one? Start one now!

The least preferred place to meet? A full 35 points behind the number one choices: meeting one-on-one or in a small group in a coffee shop or restaurant. This beloved and much-trained-upon method was deemed “old-school” and “cringey” across the board.

Action Item: Scrub your training materials for suggestions to schedule a 1:1 in person as a great prospecting tool. Maybe five years ago, but not today!

Then, we looked to understand what tools or resources they would find most helpful when first making the decision to join. This was intended to get us all some answers for how to best create/re-create those opportunity “leave-behinds.” Turns out, the highest scoring item for conversion was a one-to-three-month written roadmap for success. That was more pivotal in any decision making than success stories, income claims and projections, videos, brochures or even product samples. The only generation that didn’t rank this first was Gen Z. They wanted to see examples of people in their age range that had found success. So—sort of the same principle—but they wanted that roadmap to come from someone they could consider a peer.

Action item: Ditch the opportunity brochure. Create a one-page roadmap to success instead.

What Really Moves the Needle

Okay, so every generation has now been approached and provided with a roadmap for success…but what are they really looking for from us? We asked them what the biggest benefit was that they saw in direct selling. Again, the number one reason was sort of obvious—make extra money, of course! But second and third were a virtual tie between having control over when and where they worked and getting paid weekly. Weekly pay is a key benefit and decision driver.

Bringing up the bottom of that list were some old-school favorites that we may want to rethink how much we focus on, such as getting to attend celebrity events, keynote speakers and the opportunity to get recognized for their success.

Wow Stat: 75% of all generations and 92% of Younger Millennials were more likely to join a company that supported a social cause that they believed in and pointed to that as a key decision factor.

So, what will help them make that final decision? There are two major drivers that showed up as factors that would OVERCOME any skepticism they might still feel over joining.

1. A cost to get started UNDER $100
2. Generating sales and income in first month of business

This “less than $100” showed up clearly in all generations but particularly for Millennials.

Action Item: Take a look at those starter packs and your overall cost of entry. In all cases—regardless of generation—having an option less than $100 is critical for success.

Stay Focused (and Stay in Touch)

The Direct Sales Generational Engagement Study, conducted by Bridgehead Collective, sheds light on the perceptions of direct selling across different generations. It reveals varying levels of interest and motivations among different age groups; highlights effective recruiting strategies; emphasizes the importance of onboarding and retention strategies; and explores the significance of community in fostering success as a direct selling distributor.

By understanding these generational perspectives and using the information to precisely position all facets of your business, you can tailor your approaches to attract, engage and retain distributors effectively.

Next month we will walk you through Onboarding and Getting Started and share the shocking (yes, I said shocking) insights on how each generation—especially those Young Millennials and Gen Zers—want to engage with your company. I promise you it’s not how you think!

With 20+ years of cross-functional experience in direct selling, Heather Chastain brings a solid understanding of sales, marketing, technology, manufacturing, operations and C-Suite challenges as well as a strong collaborative and relational style of leadership to the table. Heather has held executive roles at Shaklee, Arbonne International, Celebrating Home and BeautiControl. Heather also serves as the Strategic Advisor at DSN and is the Founder & Chief Executive Officer of Bridgehead Collective.

From the September 2023 issue of Direct Selling News magazine.

The post GENERATIONAL INSIGHTS / Recruiting & Prospecting in Direct Selling first appeared on Direct Selling News.

Direct selling has become an increasingly popular avenue for individuals to start their own businesses and earn income. To gain a comprehensive understanding of the perceptions surrounding direct selling, the Direct Sales Generational Engagement Study was conducted by Bridgehead Collective and carried out by The Center for Generational Kinetics, led by President Jason Dorsey.

In this first-of-its-kind study, Bridgehead Collective chose to partner with the Center for Generational Kinetics, which has led more than 100 research studies in all major industries. Their seminal annual study, The State of Gen Z, formed the basis for the best-selling book, ZConomy and has been consistently featured in national and global media including The Wall Street Journal, New York Times, CNN and many more.

I set out to discover America’s perceptions of entrepreneurship, the gig-economy and—more pointedly—direct selling. Statistical significance was of ultimate importance in this analysis, so the study represents a wide-sweeping sample that is reflective of America, with an equitable mix of genders, demographics, employment status, education levels and location that allows for a 97 percent confidence level. This study aimed to explore the attitudes, motivations, limitations and beliefs about starting a business in America, as well as uncover perceptions of direct selling, recruiting strategies, onboarding methods, distributor retention and preferred payment structures.

We designed the study to provide actionable insights across 10 key categories:

• Perception of Industry and Channel
• Recruiting and Prospecting
• Motivations and Decision Criteria
• Onboarding and Getting Started
• Training
• Compensation and Value Proposition
• Recognition
• Incentive Trips and Events
• Retention
• Duplication and Role of Team Building

In this series, we will be digging deeper into each of these categories, starting right now with Perception of Industry and Channel.

The good news (and alternative title for this article) is “They Don’t Hate Us.”

I say that somewhat tongue-in-cheek given what have felt like pretty significant headwinds on our category, industry, who we are and even what we call ourselves. The data tells a different story. But before we get into that, let’s just review what the study showed about starting a business in general.

Perceptions Around Starting a Business

The study revealed that half of Americans expressed interest in starting their own businesses within the next five years. Younger Millennials, in particular, showed a significantly higher likelihood (63%) of pursuing entrepreneurship. Men were also more inclined (59%) compared to women (41%), and individuals with a graduate degree showed the highest likelihood (71%) of venturing into entrepreneurship. Furthermore, 76% of Americans expressed a desire to own their own business within the next three years, with younger Millennials exhibiting the highest aspiration rate (83%).

That’s a lot of potential new people interested in doing what we do. But what kind of business? Interestingly, approximately 42 percent of Americans reported having considered working in the direct selling industry. Notably, Gen Z (18-26) and younger Millennials (27-35) displayed a greater inclination towards direct selling, both in terms of considering it as a career option and actively working within the industry.

WOW STAT: 60% of Americans think owning their own business is harder than being an employee at a business.

But what about direct selling? We have long heard about the negative perception this channel has, particularly among the next generation of direct sellers.

Again (sensing a theme here?) the data tells a different story. But in an industry that has been playing the “name game” for quite some time (direct selling, social selling, digital selling, affiliate marketing, referral marketing, social marketing and on and on), so we decided to test them all! Which of these, if any, had a negative perception and which did not.

Americans have the most positive perception of:

• Digital Marketing (60%)
• Referral Marketing (58%)
• Direct Selling or Direct Selling Industry (55%)

Did you see that….55+ percent of all Americans have a Positive or Very Positive perception of Direct Selling. The only category of business that scored less than 50 percent positive was Multi-Level Marketing, but we can’t really pretend to be surprised by that, can we?

This is great news, everyone. That means that we don’t have as much resistance to the very language that describes what we do as we may have thought.

Where it really gets interesting is when you break it down by generation. Younger generations, especially younger Millennials, have a significantly more positive perception of all direct selling businesses or categories tested compared to older generations.

And look at those Younger Millennials—across the board—significantly more positive than any other generation about our industry. No matter what we call it.

So, ultimately what does this mean? Words matter. Precise positioning of our opportunity, using language that resonates based on the specific and targeted generation you are trying to attract can radically improve the effectiveness of your messaging and your results.

Next month we will explore the ever-critical world of Recruiting and Prospecting and learn how each generation wants to hear about your business opportunity: in what setting, with what technology and using what words!

Spoiler alert: Digital is not the all-powerful solution we tend to think it is with the younger generations!

Words That Resonate

The Direct Sales Generational Engagement Study—conducted by Bridgehead Collective—shed light on the perceptions of direct selling across different generations. It revealed varying levels of interest and motivations among different age groups; highlighted effective recruiting strategies; emphasized the importance of onboarding and retention strategies; and explored the significance of community in fostering success as a direct selling distributor.

By understanding these generational perspectives—and using the information to precisely position all facets of your business—you can tailor your approaches to attract, engage and retain distributors effectively.

With 20+ years of cross-functional experience in direct selling, Heather Chastain brings a solid understanding of sales, marketing, technology, manufacturing, operations and C-Suite challenges as well as a strong collaborative and relational style of leadership to the table. Heather has held executive roles at Shaklee, Arbonne International, Celebrating Home and BeautiControl. Heather also serves as the Strategic Advisor at DSN and is the Founder & Chief Executive Officer of Bridgehead Collective.

From the July/August 2023 issue of Direct Selling News magazine.

The post GENERATIONAL INSIGHTS / Perceptions of Direct Selling first appeared on Direct Selling News.

A first-of-its-kind study details how every generation of Americans across all genders, geographies and socio-economic levels perceive, engage with and measure success and opportunity in direct selling.

Times have changed, but in the direct selling channel executives can easily assume (read: hope) that some things never will.

That belief was challenged last year when Jason Dorsey, President of the Center for Generational Kinetics (CGK), presented his generational research at Direct Selling University. Generational research identifies differences between generations in underlying motivation, actions, behavior and predictable tendencies. And while his findings illustrated how deeply the generational divide impacts how people perceive and engage with the world around them and detailed how companies cannot simply rely on one messaging style to effectively reach all ages, all the insights were borrowed from research done in other industries. As I dug deeper into this game-changing topic, I quickly discovered that no generational study of any significance had ever been done just for the direct selling industry.

As a (ahem) seasoned executive and the founder of Bridgehead Collective, a firm founded to help companies in the channel innovate, form and execute strategic plans in a dynamic digital environment, I know the importance of well-researched data. Operators at our core, we use data to help companies maximize every dollar spent. Data is the foundation for determining how to allocate investments; where to leverage human power to lead through change; how to identify and overcome internal and external obstacles to growth; and how to decide which strategies will have the most robust impact on measurable results. That’s why, as I listened to Jason, I knew that we needed to harness the power of original generational research in a way that would specifically analyze the direct selling industry. If we want answers that we’re willing to dedicate all our resources towards, then we must do the research. As much as we’d like to think we’ve been around long enough to have all the answers, we often need to reach out to those who actually do.

New Generation-Specific Strategies

In a first-of-its-kind study, Bridgehead Collective chose to partner with the Center for Generational Kinetics, which has led more than 100 research studies in all major industries. Their seminal annual study, The State of Gen Z, formed the basis for the best-selling book, ZConomy and has been consistently featured in national and global media including The Wall Street Journal, New York Times, CNN and many more. I set out to discover America’s perceptions of entrepreneurship, the gig-economy and, more pointedly, direct selling. Statistical significance was of ultimate importance in this analysis, so the study represents a wide-sweeping sample that is reflective of America, with an equitable mix of genders, demographics, employment status, education levels and location that allows for a 97 percent confidence level.

When we launched the study, my biggest fear was that I would spend a year immersed in this process, only to resurface with findings that were predictable. I anticipated a year full of “Well, as we suspected…” but instead, I was thrilled by the differentiated and potentially game-changing nature of our results, and I think you will be too.

We designed the study to provide Actionable Insights across 10 Key Categories:

• Perception of Industry and Channel
• Recruiting and Prospecting
• Motivations and Decision Criteria
• Onboarding and Getting Started
• Training
• Compensation and Value Proposition
• Recognition
• Incentive Trips and Events
• Retention
• Duplication and Role of Team Building

What did we learn? So, so much! Every generation has strong feelings about how we recruit, onboard and train. That maybe we knew. But no two generations are remotely the same in what motivates them to want to stay in or leave a business. In fact, as we looked at the data, it was common to see results that were significantly polarized. Each of these 10 key categories provided new, actionable insights that every marketing, sales, field communication and compensation team will want to design around. Following are just a few of these standout insights from one of those categories.

Leading with a one-size-fits-all approach is from a bygone era; I don’t think anyone is still stuck in that model. But many companies are still relying on a historical positioning of the direct selling opportunity that doesn’t really fit anymore. We must consider just how much perceptions have shifted and strategize with generational chasms in mind.

What we need is a new roadmap.

Precision Messaging

It’s common to hear direct selling executives and field leaders say they are eager to pursue Gen Z. They are the next generation of customers, after all, and represent the threshold to what’s next. In an effort to court the youngest shoppers, however, brands can jump on trend bandwagons that have the opposite effect for older generations, effectively alienating their already loyal customers and distributors in the Gen X and Millennial age brackets.

The key, then, is to deliver our messages with precision. No two generations have the same preferences, experiences and motivations, so our messaging shouldn’t either. We need to become students of generational divides, knowing how to fine-tune our communications so that they speak the language of each specific customer and what our sellers want to be called for maximum credibility (Spoiler alert: it’s not Ambassador).

This will create the trust we need with each generation to ensure our messages are heard, understood and embraced. With the right data, it’s possible to truly reach everyone by refining our audience and tailoring our messages for maximum impact.

The Sweet Spot of Opportunity

The good news is, across the board, Americans are generally interested in starting their own business. Even better, a whopping 42 percent have considered working in the direct selling industry. If we stopped there, we might be misled to think that a large segment of every generation is ready to receive the direct selling opportunity without reservation.

When we dig deeper, we find that Gen Z (ages 18-26) and younger Millennials (ages 27-35) are significantly more likely than older generations to be working or to have considered working in the direct selling industry. However, older Millennials (36-43) and Gen X (44-55) are much more likely than their younger counterparts to have never considered working in the direct selling industry.

In fact, the study told us that younger generations, especially younger Millennials, not only have a significantly more positive perception of direct selling compared to their older counterparts, they’re also considerably more comfortable learning about the opportunities it can offer.

From this survey question, another statistic was buried within the data that took us by surprise: men are 11 percent more likely than women to have a positive perception of direct selling and seven percent more comfortable learning about a direct selling opportunity.

For years, many direct selling brands have spent their energy courting Gen Z women shoppers and mom-preneurs, but the data is telling us that Young Millennial men, ages 27 to 35, are potentially our biggest missed opportunity.

If we use precision messaging, we can advance recruiting in this demographic while also tailoring our communications with the older, more skeptical demographic in a way that speaks to their doubts and concerns.

Barriers by Generation

Being an entrepreneur is no easy task, so it’s no surprise that high startup costs (54%) and failure itself (46%) are the biggest barriers Americans face when considering a new business venture. But those challenges increase as we step into the direct selling genre.

Taking all ages into account, 46 percent of Americans who have a negative perception of direct selling just have a general belief that the industry is a scam or predatory, and 43 percent are convinced they would have to get their friends to buy something in order for them to be successful.

These are big numbers that represent big barriers for any prospective distributor or customer. How can we reposition our messages to assuage these beliefs?

By digging into the data. Our study exposed exactly what words to use to overcome these barriers; how to position the opportunity; where and how to reach them; and the most effective language to use for each generation.

Once we’ve addressed these gateway obstacles, we need to consider how Americans want to be approached with the opportunity. Most generations prefer an in-person conversation with a family member or friend—surprisingly, 70 percent or more of Gen Z and all Millennials favor this method.

What no generation preferred was a group discussion led by a distributor. Group meetings, whether on Zoom, at an event or in a coffee shop, scored low across the board. There was one caveat: Younger Millennials were the most receptive of all generations across a number of categories and approaches.

This was one of the most surprising insights from the entire study. Younger Millennials don’t really care where or how they learn about direct selling. They simply want to hear about it, even more than we might have thought.

What’s Their Win?

Making extra money is by far the biggest benefit Americans seek when getting involved as a direct selling distributor. From there, having control over when and where work happens (43%) was a strong driver.

For older generations, getting paid weekly significantly influences their likelihood of engaging in the direct selling industry, while younger generations prioritize learning new skills that can be used in their daily lives and building their influence and impact.

Money is the best and most welcomed benefit by a long shot, and getting paid and receiving money is what makes people want to stay working in the industry. In fact, it’s the highest predictor of whether or not an American would choose to keep working their business after the first three months.

While this is obvious, there is more to the story. In a generation-specific analysis, we see that Gen Z is also deeply impacted by a belief that they are part of a cause or movement, and that helping at least three other people get started would absolutely convince them to stay at a direct selling business after the first three months, significantly more so than older generations. For Gen X, it’s all about getting paid and seeing the product or service they’re selling work in their own life.

How Much Is Enough?

We have all been reframing our business opportunity in increasingly compliant ways, referring to “extra or additional or supplemental income” instead of a specific dollar or some other atypical earnings amount. The problem though is that this general approach to pitching opportunity will mean different things to different people. However, now, with this research, we know for the first time how much money “additional or extra or supplemental” income really is. An extra $500 a month is enough for 83 percent of Americans to say they would get involved in direct selling, but the exact amounts vary significantly by generation. For older generations, $1,000 or more in the first month convinces them that direct selling is worth it. For younger generations, that number is only $250-$499 and the mention of more than $1,000 can raise red “ick-factor” flags that will deter them from ever joining! We have the data to show you why.

Much to my surprise, cash bonuses for hitting certain sales thresholds beat out a simple consistent selling percentage as the number one preferred performance incentive across the board. In contrast to Gen X and older Millennials, younger generations valued recognition in front of their peers or at a national or international meeting as a highly effective performance incentive.

It’s important to take note that respondents rated some of the most common industry recognition tools as the least likely to make them feel valued as a distributor, which when armed with this data, should have some of you rethinking how you recognize on social or those increasingly ubiquitous give-back trips.

Unlock Untapped Opportunity

The study clearly shows us that generations perceive this industry in vastly different ways than we may have thought.

The often-touted homogeneous, funnel marketing technique may appear more efficient, but this study proves that it is likely also less effective. We must balance efficiency with effectiveness. When we think about investment, we need to also think about changing the lens with which we’re viewing that investment. What’s a bigger spend: one cheaper, ineffective communication approach or a multi-pronged message that may cost more but delivers results?

For instance, if you want to go after younger Millennials, talk about the opportunity to earn an extra $250 a month and offer them a trusted guide to help them develop the skills they need. If you want to go after Gen X, focus on the potential to earn an extra $1,000 a month and the efficacy of your products.

There are wide bands of Americans that genuinely want and are looking for what we have to offer. All of the insights above were from just one of the 10 categories of questions, and they all offer equally insightful and actionable data we can apply to every facet of our businesses. When we fine-tune our target market and let the data guide our message there is vast opportunity waiting to be unlocked.

Want to learn more? Join us at the DSN Deep Dive event happening Friday, May 19 in Flower Mound, Texas. Jason and Heather will share their biggest surprises from this game-changing research and provide key action items to keep your messaging and methods on point for each generation. They will also be joined at the event by direct selling and social selling executives.

With 20+ years of cross-functional experience in direct selling, Heather Chastain brings a solid understanding of sales, marketing, technology, manufacturing, operations and C-Suite challenges as well as a strong collaborative and relational style of leadership to the table. Heather has held executive roles at Shaklee, Arbonne International, Celebrating Home and BeautiControl. Heather also serves as the Strategic Advisor at DSN and is the Founder & Chief Executive Officer of Bridgehead Collective.

From the May 2023 issue of Direct Selling News magazine.

The post Direct Selling’s Roadmap of the Future­—Precision Positioning first appeared on Direct Selling News.

Nu Skin scientists presented a scientific poster discussing the potential impact of a proprietary blend of green tea and alpha-tocopherol on cellulite; Nu Skin Vice President of Research and Development Dr. Helen Knaggs moderated a panel on how technology could influence the future of beauty; and Paul Cox, Ph.D., executive director of Brain Chemistry Labs and Nu Skin Scientific Advisory Board member gave a keynote address on his own research that looks into using ethnobotanical ingredients as drug candidates for neurodegenerative diseases. 

“Each year, Nu Skin scientists are conducting significant research that is published in scientific journals and presented at conferences all around the world,” said Nu Skin Vice President of Research and Development Dr. Helen Knaggs. “Our global team of scientists span a broad range of disciplines to drive innovation across our product portfolio and provide customers with proven results.” 

The post Nu Skin Scientists Present Research at Cosmetic Chemistry Convention  first appeared on Direct Selling News.

“The pandemic showed how much people use social platforms as the entry point for everything they do online—news, entertainment and communication,” said Robin Murdoch, global Software & Platforms industry lead at Accenture. “The steady rise in time spent on social media reflects how essential these platforms are in our daily life. They’re reshaping how people buy and sell, which provides platforms and brands with new opportunities for user experiences and revenue streams.” 

Driving this growth are social media users within the Gen Z and Millennial demographics, which are anticipated to make up 62% of global social commerce spending by 2025.  

Social shoppers cite loyalty as a key factor in their purchasing decisions, and 63% said they are more likely to make repeat purchases from the same seller again. This aligns with the sentiments of half of the survey participants, who say lack of trust about the authenticity of social sellers and poor return policies is their biggest barrier to adopting this commerce method. 

“Social commerce is a leveling force that is driven by the creativity, ingenuity and power of people,” said Oliver Wright, global Consumer Goods and Services lead at Accenture. “It empowers smaller brands and individuals and makes big brands reevaluate their relevance for a marketplace of millions of individuals. Getting social commerce right will require creators, resellers and brands to bring their products and services where the consumer is, and will be, rather than the other way around. It means working together within a dynamic ecosystem of platforms, marketplaces, social media and influencers to share data, insights and capabilities to deliver the right incentives and best consumer experience across an integrated digital marketplace.” 

Majority of social media users surveyed (64%) said they made a social commerce purchase in the last year—data that reflects an already estimated 2 billion social buyers globally. The report indicates that by 2025, 18% of all social commerce shopping will be for clothing, but beauty and personal care will also be a significant draw, with an expected 40% of digital spend in key markets by 2025.

The post Social Commerce Projected to Reach $1.2 Trillion by 2025 first appeared on Direct Selling News.

Direct selling is experiencing many positive changes—both in its growth and its perception. The outdated notions and beliefs surrounding our channel are evolving, and direct selling is becoming more mainstream and accepted.

Many factors have contributed to this boost in reputation. A renewed emphasis on customer acquisition, the rise of the gig economy and shifting perspectives and beliefs surrounding social selling and sharing all play important roles. The challenge for direct selling companies is spreading the word—overcoming the obstacles of lingering bad press and celebrating all of the positive things happening in the channel.

At Direct Selling News (DSN), our mission is clear: to serve and inform the channel. We achieve this by being the channel’s daily resource for breaking global news, emerging trends and powerful stories. DSN is always looking to broaden and deepen our scope by providing new tools designed to help hard-working direct selling companies and distributors educate the public about the channel.

An Important New Resource for Direct Sellers

With that in mind, we have added an exciting new resource on our website. Found under the research tab are several scholarly papers co-authored by University of Texas at Austin Professor Robert A. Peterson and former DSN Editor John Fleming.

Based on extensive research and surveys, these papers provide key insights into the gig economy and the people who succeed in it. They tackle misconceptions and inaccuracies about who is involved and what kind of work they do. Most importantly, they give concrete and powerful proof of the long-term viability of the side hustle culture.

We will continue to build out this resource over time in order to provide a current and compelling snapshot of the gig economy. We encourage and invite our readers to utilize the content and data these papers have compiled to educate your field and prospects and edify the industry.

Here’s a sneak peek at the valuable insights and information found in the papers.

1. Surprising Demographics Surrounding Gig Workers

One of the research papers, The Implications of the Gig Economy, discusses the scope of the side hustle movement and addresses several of the issues and complexities surrounding it—for the government, for the companies that hire independent contractors and for the contractors themselves.

Several interesting demographic facts about gig workers are uncovered in this piece.

•  55% work more than one gig
•  31% work more than three
•  41% work via online platforms

The paper also dispels commonly held myths about gig workers—including that they are making less money than they expected to. In fact, 80 percent of gig workers earn what they anticipated.

The paper further illuminates the lifestyle changes the gig economy contributes to. Overall, the workforce is looking for more flexibility. Gigs allow people to not only work when they want to and how they want to, gigs give them the freedom to be unrestricted by location as it eliminates the need to commute to a traditional office.

2. Separating Fact from Fiction

The second paper, Dispelling the Myths of the Gig Economy, disputes some of the negative connotations surrounding direct selling’s legitimacy and viability with powerful and compelling evidence.

One of the prevailing myths about independent contractors is that they are somehow exploited or mistreated by the companies that utilize them. The responses from participants in the side hustle culture clearly refute this.

The vast majority of gig workers—87 percent—rate their experience as positive, and 86 percent would recommend gig work to a friend or colleague. Additionally, 90 percent have healthcare coverage, which is contrary to the claims that it is difficult for them to obtain health and retirement benefits.

The idea that gig workers are somehow on the margins and vulnerable to exploitation is also based on misinformation. The paper documents that gig workers tend to be well educated; nearly three quarters indicate they have college degrees.

In fact, a relatively large proportion of gig workers are attorneys, accountants, web designers and coders, freelance writers and other professionals who simply prefer flexibility and whose primary clients are corporations, rather than individual consumers.

3. Redefining the Nature of Work

The final paper, Independent Contractors: Efficient and Very Satisfied, addresses the impact the gig economy has on how work is defined and rewarded. Much gig work is performance based. Rather than being strictly compensated by hours worked or a predetermined salary, gig workers are most often compensated on the basis of completed tasks.

This is a model that easily translates more efficiently to digital platforms which is evidenced in service fields such as child care, dog walking and long-haul trucking. Professions such as college instruction and architecture, which could be characterized as “pay for performance,” could easily follow suit.

Perhaps most importantly the research and papers clearly demonstrate that people engage in gig work because they want to control their work schedules. Gig workers seek flexibility associated with their work location and hours—which is why the model is proving to be so popular and to have real staying power.

The most apparent problems with gig work could potentially be lack of training and reduced loyalty due to the transient, transactional nature of these endeavors. But the overwhelming majority of gig workers are satisfied with the compensation and lifestyle side hustles afford them.

These three papers and the research and surveys that were conducted to produce them can be a valuable resource for direct selling companies to utilize in better understanding the wants and needs of gig workers and to promote relationship marketing as a viable option for them. 

From the July 2021 issue of Direct Selling News magazine.

The post Gaining Respect. Building Credibility. first appeared on Direct Selling News.

The article illustrates that sometimes it’s better to leave things alone because it can just bring more attention to the story.

But, there are times when you need to respond to an unfair attack on an entire industry, especially when the attack is coming from a respected publication that operated fast and loose with the facts.

A recent Washington Post article by Laura Richards titled “How MLMs are Hurting Female Friendships,” currently gaining traction in multiple media outlets across the U.S. is a perfect example.

On January 21, the Post article referenced a report on the Federal Trade Commission (FTC) website in which Jon Taylor, Ph.D., claimed that 99 percent of people involved in direct selling do not make any income at all:

According to a report by Jon M. Taylor of the Consumer Awareness Institute posted on the Federal Trade Commission’s website, less than 1 percent of MLM participants will profit, a far worse rate than for “legitimate small businesses,” of which 39 percent are profitable over the lifetime of the business. “MLM makes even gambling look like a safe bet in comparison,” the report states.

Here is the misleading part: The FTC, nor any other government agency, requested or conducted a report of this nature. The report cited in the article was not an official FTC report. It was part of a comment posted on the FTC website.

Here lies the dilemma, as noted in DSN’s January story: When a negative and misleading story appears, do you respond to it, or do you leave it alone so as not to bring more attention to it?

In this case, the story in the Post, which is a highly respected publication, impelled U.S. Direct Selling Association (DSA) President & CEO Joseph N. Mariano to offer a swift response, largely due to the inaccuracies regarding the income potential of direct sellers:

The report mentioned in this blog post written by Laura Richards erroneously implies that it was published by the Federal Trade Commission (“FTC”) in support of how few people make money participating in direct selling. The fact is, the FTC has never published a report of this nature and the citation of such a report in this manner is simply inaccurate and flat out wrong. There are no government reports of any sort which address the issue of how much money direct sellers across the business channel earn. The link referenced in the article is directly linked to a public comment provided independently to the FTC site from a very outspoken critic of the direct selling industry. Should you conduct a brief research of the FTC site, you will also see many positive direct selling reports provided as public comment on the FTC site.

Here are the facts: DSA’s 2018 Growth and Outlook survey found that more than 18.6 million Americans were involved in direct selling in some capacity in 2017, and the retail channel generated more than $34.9 billion in sales. 5.6 million were building full-or part-time businesses. Another 4.1 million were involved to purchase products or services for their personal use. Close to 9 million people stopped being active direct sellers for reasons as varied as those that motivated their initial involvement in the business.

According to DSA’s 2018 National Salesforce Study, 80% of respondents rate their experience in direct selling as good, very good, or excellent.In addition, DSA’s 2018 National Salesforce Study shows that based on the DSA sample, 90% of people involved in direct selling work part time (fewer than 30 hours per week) with more than 50% working fewer than 10 hours per week. You can see additional data from the DSA at www.dsa.org.

I suggest you also take a look at the research conducted by the Direct Selling Education Foundation Fellow, Dr. Anne Coughlan, Polk Brothers Chair in Retailing, Professor of Marketing, Kellogg School of Management, Northwestern University. Dr. Coughlan discusses her independent research on the individual motivations of direct sellers who become involved in the direct selling industry.

Finally, those who find direct selling meets their needs and interests, do so because it provides them with a flexible, economical, protected way to generate additional income to support their families, and because the community, training and support available to them is unmatched in other secondary income opportunities.

Due to DSA’s response, the Washington Post added a correction to the end of Richards’ story that states the following:

Correction: Earlier versions of this story incorrectly referred to an independent report on the profitability of MLMs that was written by Jon M. Taylor. It was submitted as a comment to the Federal Trade Commission, not written by the FTC.

When reporters fail to do their due diligence in researching stories, people are misled, even after the correction is made. The damage in most cases is already done. That is what is most disconcerting. And that is why we will continue to support the DSA’s efforts to debunk myths like this one by requesting corrections and clarification with media.

The post Keeping the Media Accountable first appeared on Direct Selling News.

Izhak Ben Shabat

SEACRET DIRECT Founded: 2011 Headquarters: Phoenix, AZ Top Executive: Izhak Ben Shabat 2017 Net Sales: $200 Million 2018 Global 100 Rank: 72 Products: Cosmetics, Personal Care

Their parents sold everything they owned, their extended family in Israel funded their flights to the U.S., and the Ben Shabat brothers prayed that their plan would work. Each week the family would work together to make this new venture a success. Every Friday Izhak and Moty’s mother would host a home cooked meal for the family, a tradition that continues to this day. Four months and $4 million in revenue later, the entire family was ready for the next phase of the business.

Following the success of their first kiosk venture, the Ben Shabat brothers chose to focus on Israeli skincare products made from minerals, salts and mud from the Dead Sea. That strategic shift, from toys to Dead Sea skincare products, would change all of their lives.

“What we created resulted in a lot of success and through that we decided to stay (in America) and build a foundation for the business, a business based on the force of Dead Sea minerals,” says SEACRET Direct Co-Founder Izhak Ben Shabat. “That’s our heritage, that’s where we come from.”

A Different Kind of Risk Pays Off

For the first five years in business, Izhak and Moty devoted their time to enhancing the kiosk shopping experience and developing skincare solutions with immediate results. “Our products work within minutes of the demonstration,” Izhak says. “Not in ten hours, not in 30 minutes, right now. That was the entire philosophy of developing the SEACRET products.”

“The company, with its new direct sales business model and new name—SEACRET Direct—made the transition away from kiosks to individual sales.”
— Izhak Ben Shabat, SEACRET Direct Co-Founder

By 2010, SEACRET had grown to a $100 million business with retailers in 30 countries. L’Oréal was now manufacturing the full line of SEACRET products, the first time the cosmetics giant was manufacturing a brand outside of its own. But as the recession began to unfold and affect every facet of retail, malls and shopping centers began to fail. The retail industry experienced a meltdown. Izhak and Moty’s dreams of transitioning from kiosks to larger SEACRET stores suddenly seemed like a potential misstep.

“We started seeing a huge collapse of the industry around us,” Izhak says. “L’Oréal was with us and had given us all these amazing tools. We had new technologies and access to the best manufacturer in the world. But (we thought) how can we grow when the retail industry is so challenging?”

With her experience in direct sales and network marketing, SEACRET Direct Co-Founder Betty Perez saw a solution: take SEACRET out of the mall. Put the products online and transition the entire business to the direct sales/network marketing model. “Before I introduced our groups to network marketing, SEACRET was already very successful,” Perez explains. “We had great products, manufactured by L’Oréal, with so much invested in the line.”

She could see the tremendous potential for the company in the direct sales arena, though it took some time to win over the Ben Shabat brothers to this line of thinking. “Initially we were very negative about network marketing and didn’t want to pursue it,” says Izhak. Then they stumbled upon the research that Warren Buffett had done about his acquisition of a network marketing company and his outlook of what the industry is going to look like. Buffett was talking about social economy and the fact that, if you want to survive this meltdown that is about to happen, you have to create a business model that will allow your customer to share and create excitement about the brand and participate in your business model. Network marketing practices an algorithm that’s been successful for over 100 years of how to compensate people for sharing products with each other.

The company, with its new direct sales business model and new name—SEACRET Direct—made the transition away from kiosks to individual sales consultants known as “SEACRET Agents” in early 2011. Since that initial transition, as of September 2018 and net sales have doubled in those seven years to more than $200 million. The transition was clearly a successful one.

The Rare Potency of Dead Sea Minerals

Paying homage to their heritage and home, the brothers initially offered various Israeli skincare brands from their kiosks, before creating their own formulations and product line as SEACRET in 2005. Today, the SEACRET line of products boasts the power of the Dead Sea and its therapeutic salt and mud, which contain 26 essential minerals—12 of those minerals existing in the Dead Sea exclusively. SEACRET’s products include facial cleansers, creams, serums and toners, as well as a line of hair care.

Betty Perez, SEACRET Direct Co-Founder

“The foundation for our product line is the Dead Sea,” Perez says. “We’ve worked with the government of Israel to get more research and obtain the highest concentration of Dead Sea minerals, so our customers get immediate results. Within the direct sales space, there are no other Dead Sea mineral products out there, so there’s really no competition.”

While there are no direct sales competitors that offer Dead Sea products, the world of skincare and cosmetics is a crowded one. In order to stand out and deliver best-in-class solutions to customers, SEACRET focuses on products with immediate results. “We offer what our customers call ‘wow products,’ products that make people say ‘wow’ within five seconds,” explains Perez. That’s something that they consider a cornerstone of their products at SEACRET, and as they continue to create products, they first focus on quality and then product integrity so that they’re providing amazing results every time. “I believe that’s what creates great retention—people can see today a glimpse of what they’re going to see even more in 90 days,” Perez says.

Aligning Two Approaches – Leading with Product vs Opportunity

As the business model transition became SEACRET’s new normal, the executive team noticed that their SEACRET Agents in the field were building strong businesses, but building them quite differently. Some Agents were focused on customers and products, while others were more focused on sharing the business opportunity. The company’s onboarding and training programs didn’t adequately address these two distinct business-building approaches.

“The customer loyalty we have is phenomenal…it’s because SEACRET has really gone out of the way to build relevant programs for customers.”
— Betty Perez, SEACRET Direct Co-Founder

“It became a challenge for us,” shares Perez. “We had people who really just considered themselves direct sellers of the products, never wanting to be business builders and vice versa. And we had a system that didn’t necessarily fit both.”

Pick up your print copy of the November 2018 issue in which this article appeared.

To align these two approaches, SEACRET developed their “XO System” that’s included in the starter kits that new Agents receive when they join the company. The system consists of two workbooks; an “X Book” that focuses on the product presentation side of the business and an “O Book” that leads with presenting the opportunity. “We found a way to bridge both of these styles where it doesn’t matter which (book) you start with, says Perez. “Both are focused on the product, and the system has been very well received.”

New Agents receive a starter kit that contains an introductory workbook and links to online training videos. Following the initial kit, Agents receive the XO System books that they review initially with their upline and then dive into on their own. These hard copy training materials are referenced in the SEACRET App as well, which sends notifications to Agents to help them follow the training.

Once they’re up and running, Agents can take advantage of sharing SEACRET’s various customer programs, designed to reward frequent buyers and foster loyalty and customer retention. From VIP and Elite Customers to Hosts who hold SEACRET Experiences in their homes, the programs are specific and effective. “As a company, we’ve developed many programs to engage our customers,” Perez says. “The customer loyalty we have is phenomenal—I truly believe it’s because SEACRET has really gone out of the way to build relevant programs for customers.”

Forward-Thinking, Family-focused Culture

Today, SEACRET continues to expand both its product line and international presence but has retained its focus on family. Currently operating in the United States, Canada, Mexico, South Korea, Japan, Australia and New Zealand, SEACRET is looking ahead to launches in Colombia and Vietnam. The company’s first Asian market was South Korea, which proved an excellent opportunity for the leadership team to focus on culture.

“I will serve whether it’s the warehouse employees all the way to the executive leaders of the company. It’s an oath we took—we don’t see it as a responsibility, we see it as a joy.”
— Izhak Ben Shabat

“Korea is one the most challenging markets in the industry because it’s so highly regulated,” says Izhak. “We said ‘we don’t know the culture very well,’ so we invited every single person that signed up in the business into the office, and we conducted interviews.” They knew they needed to get people connected to their culture first, and then the product and the opportunity. They were looking at a culture that is very respectful with a very clear definition of how people treat each other. SEACRET is now in the top five skincare companies in South Korea, with over 20,000 people attending their most recent event. They are the number 6 direct selling company in Korea.

SEACRET’s product roster has recently expanded as well, with the addition of nutritional products that launched this past summer. Though only available for the past few months, the SevenPoint2 series of organic shakes, supplements and nutritional products already accounts for 20 percent of SEACRET’s revenue. But no matter how much SEACRET expands, the commitment to a family-focused culture remains.

“When these 20 people came over from Israel to help my family when we were in crisis, my family took an oath to serve our community for the rest of our lives,” Izhak says. Today, Izhak’s mother is still standing on her feet from Tuesday all the way to Thursday or Friday to cook food for everyone. She loves it because it’s her passion. And when food is being served, it’s being served by his family and by the leaders of the organization. “I am the CEO, and I will serve whether it’s the warehouse employees all the way to the executive leaders of the company,” Izhak says. “It’s an oath we took—we don’t see it as a responsibility, we see it as a joy. We’ve had a lot of success and we are very grateful for that.”

The post Brave Beginnings, Rare Ingredients — SEACRET Direct’s Extraordinary Journey first appeared on Direct Selling News.

“I’m especially pleased that Steve Wallach has been elected to serve on the Direct Selling Association’s Board of Directors,” said DSA President Joseph Mariano. “We believe direct selling will play an increasingly dynamic role in the future of retailing, and the entrepreneurial spirit that enables Steve to empower Youngevity’s independent contractors in exciting new ways will be an asset to our board.”

The DSA represents the direct selling industry and advocates on behalf of its 200-plus member companies. Its board consists of 22 industry leaders who serve as officers and directors, as nominated and elected by their peers. In addition to leading and directing the affairs of the association, board members are charged specifically with promoting the DSA code of ethics. Board leadership also carries government relations, education, and research responsibilities.

“I’m extremely grateful for the opportunity to serve on the DSA Board of Directors,” said Wallach. “I look forward to helping advance the association’s global membership initiatives and being at the forefront of positive change in our industry.”

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According to the report, while China’s cosmeceuticals market is currently quite diversified and fragmented, it appears cosmeceutical products are resonating more and more with Chinese consumers.

Mintel’s research reveals that as many as seven in 10 (69%) consumers agree that using cosmeceuticals daily can prevent skin sensitivity. In comparison, 44 percent say that they only look to cosmeceuticals when they are suffering from certain skin conditions.

Reflecting increasing attention to the ingredients found in cosmeceuticals, up to three in four (74%) urban Chinese consumers agree that it is essential for cosmeceuticals to contain effective ingredients. Further, three in five (60%) believe cosmeceuticals formulated with fewer ingredients are safer.

Speaking at in-cosmetics Korea, an exhibition for personal care ingredients, Associate Beauty Director Jessica Jin of Mintel said, “The term ‘cosmeceuticals’ really only started to gain momentum in China over the past few years, yet more and more beauty retailers are expanding their offerings to include cosmeceutical products in store. Busier and more stressful lifestyles, as well as worsening environmental conditions, today, have created more concern around skin conditions among consumers who are looking for relative treatments as a result—and this is where cosmeceuticals come into the picture.”

“Our research shows that Chinese consumers believe that daily use of these products can prevent skin sensitivity,” continued Jin. “On the other hand, fewer consumers think cosmeceuticals are only needed when they experience certain skin conditions. This spells good news for the Chinese cosmeceuticals market given the favorable potential for such products to be included in consumers’ daily skincare routines. With more knowledge about and attention paid to ingredients and product safety, it is important for cosmeceuticals to highlight the efficacy of star ingredients.”

Consumer understanding of ingredients is currently at an all-time high. What’s more, it seems that men, like women, are also eager for ingredient information with little gap in ingredient awareness between genders. According to Mintel research, 56 percent of men have purchased facial masks that include collagen as an ingredient in the last six months; this compares to 58 percent of women who did the same. Other ingredients with significant penetration rates among men include essential oils (40% male vs. 33% female), vitamin (34% male vs. 32% female) and amino acid (32% male vs. 35% female).

In order to validate a product’s quality, Mintel research reveals that cosmeceuticals can do that via data and institutional endorsement. Indeed, over half of urban Chinese consumers say they believe that a product is high quality if it has precise data to support it (55%) or if it is authorized by a professional institute (52%).

“A product’s effectiveness and safety are both equally important to Chinese consumers,” said Jin. “When setting product claims against cosmeceuticals, it is essential that manufacturers are aware that consumers highly value scientific data and endorsement from professional institutes to substantiate a product’s quality and effectiveness. To further penetrate the Chinese market, cosmeceuticals can also consider providing in-store services such as skin type tests through the use of devices, as well as engaging pharmacists to increase credibility.”

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