In this new digital world, they expect whatever business(es) they choose to work with to be current with trends, simple to operate, profitable—and FAST! Plus, the competition to attract and retain field members is fierce in today’s workforce.

With a 3.7 percent unemployment rate, US employers are aggressively competing for workers everywhere—and the direct selling industry is no exception. Every direct sales business needs a strong, reliable, engaged and satisfied field, so the race for attracting talent in a competitive landscape can be challenging. The direct sales landscape (like all other industries) is unrecognizable compared to a decade ago and even more so in the past three years. Is this a good thing? YES!

The direct sales industry can compete within the gig economy and win! As a channel, we have so much more to offer. We are, after all, The Original Gig. Working from the comfort of home, low start-up cost, quick compensation, company support and personal growth can be much more attractive than many other gig opportunities out there.

Flexible Financial Freedom

How can we do that? Attracting new entrepreneurs means satisfying their expectations. Companies that offer flexible payment options and safe, secure, speedy payments—usually on the same day—provide a better experience; improve attrition rates; and become more attractive to those entrepreneurs looking for a side or full-time home business to join. Instant payments build loyalty, trust, belief and engagement. This, in turn, creates a desire to grow their businesses and the desire to increase income. It becomes a snowball effect.

Instant payments are key to unlocking the vast talent pool of the growing gig economy. The Future of Work: Insights into the 2023 Gig Economy Workforce study conducted by Dr. Robert A. Peterson and John T. Fleming and sponsored PayQuicker found that 83 percent of gig workers cite the importance of being paid immediately for performance when looking for a new gig. The importance of immediate pay for performance was endorsed by the gig workers surveyed, particularly women. A large percentage of the direct sales industry salesforce are female and being paid immediately for performance was stated as more important for female gig workers.

Instant Payment Supports Retention

When asked, “How do you primarily use the money you earn from your gig,” 49 percent of the gig workers surveyed in 2023 stated that they used their gig earnings to pay household bills. This percentage is a significant increase from 2020, when 37 percent of the gig workers surveyed stated that they used their gig earnings to pay household bills. This 12 percent increase for households indicates that independent contractors are relying on being paid on time to pay their bills. Getting instant access to commissions earned could create more loyalty to the brand and support retention of the salesforce.

Another important factor is security and fraud protection. This is extremely important to today’s salesforce. Having a secure, safe platform with secure commission accounts that ensures authentication of the user; has multifactor authentication; bank-grade security; and is compliant with regulations worldwide allows the field to feel safe with their earnings that are deposited into a personal account.

Additionally, a brand debit/credit card validates and helps to promote the entrepreneur’s business, while a reliable payment back office that tracks payments, expenses and even offers tax documents increases the loyalty, trust and belief of the entrepreneur.

Plus, the ability to purchase anywhere with personal branded debit cards (virtual and plastic) instantly, with the option of mobile wallets, is a competitive advantage in the marketplace. Multiple, flexible payment options are key as well. Instant access to a virtual card that they can start spending on immediately upon registration is also extremely important. They want to use their earnings immediately.

What Entrepreneurs Want—and Need

This is what today’s entrepreneur wants with their commissions. While faster payments are just one of many ways that the relationship between the field and the company becomes stronger, it IS known as one of the top items on their checklist when choosing a company to represent.

One last observation which I think is the most important is that those who have fast access to their earnings work harder and more frequently. People love getting paid for a job well done and seeing it in black and white. It helps as a motivator to work toward that $500 needed to pay bills, a mortgage, pay down debt, etc. This is the golden nugget, that intangible that makes a difference. There is no better satisfaction for everyone involved in this industry than seeing those goals achieved and success attained. I’m glad we are all a part of the equation to help their success in an ever-changing and complex economy.

In conclusion, direct selling organizations need a secure and compliant solution to deliver payouts to their salesforce with minimum overhead that caters to the diverse payment needs of all global demographics. Keeping sellers engaged in today’s competitive market is a top priority, while increasing internal efficiencies and reducing costs are key to business growth. Faster payments to your distributors mean they grow their business—and yours—faster.

With over 30 years of experience in the direct sales industry, Darla Brown is a seasoned executive who began her career as a distributor in the field and then moved into the corporate world of direct sales as an executive in sales, marketing and management. As Global Vice President of Customer Growth at PayQuicker, Darla supports new and existing clients with their global payout needs.

From the November 2023 issue of Direct Selling News magazine.

The post How to Get Ahead in the Race for Attracting Talent first appeared on Direct Selling News.

Amazon, gig economy competitors and other market forces have taken some wind out of direct selling’s sales.

After years of significant growth, our industry’s U.S. revenue was down 1.6 percent in 2016 and nearly two percent in 2017, according to DSA’s Growth & Outlook Survey.

The surge in alternatives to direct selling and pressure from e-commerce has knocked us back. And we’re just now regaining our balance. Last year U.S. direct selling retail sales was slightly up again, a paltry 1.3 percent over 2017 to $35.4 billion, and the number of business builders—those who regularly buy product at a discount and sell it for a profit—was up 1.6 percent to 6.2 million. The Direct Selling Association (DSA) projects that U.S. direct sales revenue will continue to rise, between one and three percent annually for the next three years.

“We have to be willing to change what used to work. Because although it may have worked in the past, it was never sustainable.”

That seems doable, right? If we can grow by 5.9 percent—our high between 2011 and 2015—surely, we can manage a percent or two. But we have to be willing to change what used to work. Because although it may have worked in the past, it was never sustainable. We must find new tactics, set new expectations and rephrase our recruiting message because times have changed. The “You, too, can have the house, the boat, and retire a millionaire in five years!” hard sell our industry has been known for has done us more harm than good. “The appeal to greed is repugnant,” said LifeVantage President and CEO Darren Jensen at DSA’s 2018 Fall Conference. “We keep going back to that well time and time again, and we need to shift away from it.”

Putting Field Leaders Back To Work

The lure of network marketing was this grandiose plan to work hard for a few years until the big money rolls in and then coast on the residual income. Direct selling companies have themselves to blame since they have traditionally organized their compensation plans to reward these top earners to coast on the work their downline does. It’s time to start rewarding activity that directly brings in new customers and representatives. This strategy not only will energize your ground-level representatives, it should motivate those veteran team members to re-engage in business building.

There are examples of this priority shift all over the channel, notably what happened with AdvoCare earlier this year. In May, the Plano, Texas-based company announced it would abandon the multilevel marketing model, no longer paying distributors on the sales of the salespeople in their downlines, but paying only on sales to retail customers. “Over the years, we have made many changes to the AdvoCare policies as the regulatory environment has shifted,” said AdvoCare Chief Executive Officer Patrick Wright in a statement. “Based on recent discussions [with the Federal Trade Commission], it became clear that this change is the only viable option.”

Other companies are still offering tiered compensation plans, but those plans are getting flatter and easier to understand.

“The more our industry focuses on being customer-centric—the more our business will work in the future.” —Gordon Hester, direct selling analyst

The compensation plan at Salt Lake City, Utah-based Perfectly Posh pays Posh influencers commission on their own sales and a maximum 15 percent commission on the sales of influencers on just two additional levels, or “spheres.” Said Perfectly Posh CEO Ann Dalton in May, “Our new Influencer Pay Plan transitions away from the more typical pyramid pay structure in direct sales, which is neither simple nor transparent. We’ve taken a modern approach to compensation, ditching the complex and often confusing steps it takes to build a successful business.”

Brand ambassadors for Provo, Utah-based Nu Skin can earn same-day sharing bonuses when registered retail customers buy directly from Nu Skin or through the company’s mobile app, the Velocity pay plan. “When we looked at the desires and the needs of [our sales force], we found there was a fairly large group of people building a Nu Skin business because they needed income today—not six weeks or even a week from now,” says Nu Skin President Ryan Napierski.

Companies with comp plans similar to those at Perfectly Posh and Nu Skin understand that customer acquisition and increasing retail sales have to be their main goals. The bottom line is that most people who come to our doors are just looking for premium products at a fair price. They’re not interested in selling it. Lehi, Utah-based Xyngular puts front and center on its comp plan description that only 20 percent of its members are business builders. When we recognize and respect customers’ motivations, they’re more likely to become repeat customers because they don’t feel pressured to become anything else.

“The more our industry focuses on being customercentric— the more our business will work in the future,” said direct selling analyst Gordon Hester at DSA’s recent annual meeting. “That’s what the data is saying.” The data he’s referring to includes a 48 percent growth in preferred customers in 2018. Preferred customers purchase at a discount, often as a perk of signing up for automatic repeat shipments.

“As the strength of the customer base—what we call ‘customer density’—grows, then all of a sudden, everything around it grows,” Hester continued. “We’re going to see a longer customer lifetime value and longer customer lifetime stay, and we’re going to see distributors staying longer and engaging at higher levels.”

A New Reality

Engaged, loyal distributors take time to cultivate—and it’s more challenging now that direct selling no longer dominates the work-for-yourself market. According to Statista, 57.3 million people are earning money from some kind of gig economy job—Uber driving, Airbnb renting, etc. This likely includes the 6.2 million direct selling business builders, but it also includes 51 million others who aren’t working in our channel. Why do so many people choose these other opportunities?

Experts say it’s because gig companies not only offer the work flexibility and autonomy that direct selling used to own, but they have set new side hustle standards. Gig work often

• has low or no startup costs;
• pays instantly (sometimes up front); and
• provides customer leads—no sales experience required.

Gigs have put in stark relief the difference between wanting to earn extra money and wanting to be an entrepreneur. The two can be mutually exclusive, says Brett Duncan of Strategic Choice Partners.

“While direct selling companies keep promoting ‘business opportunities,’ the Gig Economy keeps showing us just how many people aren’t interested in that,” Duncan wrote recently. “ In fact, it may actually turn them off. Making an extra $300 a month isn’t typically considered ‘a business’ by a normal person. Sure, it technically is a business, but that’s not how most people think about it. So why do we keep pushing it?”

“The appeal to greed is repugnant. We keep going back to that well time and time again, and we need to shift away from it.” —Darren Jensen, Life Vantage President and CEO

Recruiting in our industry has no choice but to stop pushing against the expectations and motivations these gig opportunities have revealed. Yes, there are people who have entrepreneurial skill and drive and who see direct selling as the perfect way to achieve their dreams of business ownership. Most people pick up side work to make ends meet more easily and are bringing in less than $50,000 a year with their gig—only 11 percent are clearing six figures, according to Statista data. Even among direct sellers, only 16 percent of them are working full time (30 or more hours per week), according to the latest DSA’s Growth & Outlook Survey. That suggests that the majority are putting in part-time work because they’re looking for part-time income.

Direct selling companies need to develop recruiting messages and strategies that meet prospective distributors where they are and likely will be comfortable staying. If we don’t, we’ll become irrelevant, says LifeVantage’s Jensen. “We need to recognize we are in a battle of the side hustle.”

We’ve gathered some best practices for winning in this side-money, customer-driven era:

1. Set honest, realistic expectations. Tell prospective business builders what most distributors actually earn and what it takes to achieve and sustain that level. Xyngular’s comp plan states clearly that nearly 80 percent of its distributors earn $67 a month.
2. Offer quick payments. Instant commissions are one of the biggest trends in our space. Airbnb hosts get paid before their guest even arrives. So, we have to  get faster. Perfectly Posh pays in less than five minutes from the time of sale, at no additional cost.
3. Provide complete, accessible information about your opportunity. Make it easy for potential distributors to find your compensation plan and startup requirements on your website.
4. Watch your language. Reinforce the separation between customers and distributors at every stage. At Xyngular, for example, distributors enroll but customers check out, Jensen says. If a customer has to click “enroll,” there’s an implication that she is getting in deeper than she wants and she may bail on the purchase.
5. Emphasize product and experience sharing. Potential customers and distributors are more likely to respond positively to authentic content from satisfied product users.

Compliance Matters

Class action lawsuits across all industries are costing companies more money and time than ever.

According to the 2019 Carlton Fields Class Action Survey, the number of companies that reported facing class actions in 2018 dropped slightly to 54 percent, but the average number of matters per company increased from 6.3 in 2017 to 7.8 in 2018. And class action spending increased for a fourth consecutive year, to $2.46 billion in 2018, accounting for 11.1 percent of all litigation spending in the United States. The companies surveyed said most class action lawsuits brought against them last year alleged either consumer fraud or a labor and employment violation.

“Recruiting in our industry has no choice but to stop pushing against the expectations and motivations these gig opportunities have revealed.”

We don’t have class action lawsuit volume for our industry, but the general sense is that we’re feeling the pinch as much as or maybe more than other channels. “In my experience, we’re seeing more and more direct selling companies targeted by class-action lawsuits due to product and earnings claims,” says Crayton Webb, owner and CEO of Sunwest Communications, a Dallas-based public relations firm.

Most of these claims come, though, from a lack of understanding, training and awareness—and while distributors have a responsibility to represent our companies and products truthfully, it’s incumbent on our industry and individual companies to continually educate our field teams. We have to tell them often what they can and can’t say and then monitor our marketplace for statements and activity that come dangerously close to or go over the line.

Do The Right Thing

Amazon and other e-commerce players have rewritten the retail rules. The gig economy has rewritten the work-for- yourself and extra income rules. And regulators are watching us more closely than ever to make sure we stick to the ethical and legal rules—rules, by the way, that we should follow even when no one is watching. We have a choice to make—A) evolve and thrive or B) cover our ears and eyes and hope no one notices if we do business as usual. The thing is, though, A is really the only choice. Because “as usual” will put us out of business.

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