Direct selling is at a serious inflection point. With the triple threat of inflation, post-pandemic malaise, and the invasion of Ukraine continuing to burden sales for industry leaders, companies must ask themselves: how have distributor and consumer desires, expectations, and behaviors changed? Many direct selling companies have made the mistake of focusing on their processes, operations, and business results without considering the psychologies and behaviors of distributors and end consumers.

What can direct selling companies today do to account for these changes? How should direct sellers evolve to compete in the New Economy of the 2020s? The answers to the questions are at once simpler and more complex than most people think.

1. Distributors Are Tired.

While direct selling is somewhat siloed off from the larger economy (due to the industry’s singular nature), still, it can’t help but be affected by some of the dominant trends in the workforce. Chief among them is the same sense of overwork that sparked, first, the Great Resignation, and second, “quiet quitting” in traditional organizations. 81%+ of the workforce as of last year felt overwhelmed, while threats of a recession looming will not have helped matters in 2023.

The story isn’t all that different in direct selling, where 2021, the latest year with conclusive data, showed a 5.2% decrease in direct selling distributors overall. At best, it seems that consultant turnover rates remained stagnant through 2022, with sales productivity not reaching the highs of the pandemic, when members of the field were stuck at home and more likely to spend more time on social business-building at a time when loneliness was rampant among older adults.

In addition, distributors have simple ways to earn money that in their eyes, might not require as much initial effort. They can sign up with a gig platform. They can create an eCommerce shop after registering with Etsy. They can find part-time or freelance work. How can direct selling persuade distributors to give it their “timeshare” in today’s marketplace? If the New Economy has been defined so far by trends like the Great Resignation and quiet quitting, direct selling decision-makers need a way around this.

Direct selling field operations cannot proceed as normal without enhancing reliability, capability, and ultimately sales performance at scale among field distributors. Leaders in field operations and sales must reconsider how they drive field efforts or risk further corporate downturns.

SOLUTION: Embrace digital transformation and the benefits of modern technology.

At a basic level, direct selling is at even more of a disadvantage than traditional companies here. Distributors are obviously not employees and cannot be compelled to perform or be productive. They must be subtly, continually persuaded to sell. And so the “tools” that direct sellers use to appeal to distributors take on outsize importance.

The “tools” that distributors have access to, the means by which they onboard, upskill, and sell to consumers, are the points of connection between the company and the distributor: they are the main hinge point that binds the company together with the individual. When distributors see the company’s tools as bare bones, their estimation of the company goes down. When distributors see the company’s tools as state-of-the-art, their estimation of the company goes up. We see this borne out at Rallyware, where we provide an all-in-one field Performance Enablement Platform for sales forces.

Last year direct selling companies, after adding “Incentives & Recognition” tools to their Distributor Experience (i.e., the set of tools the distributor has access to), saw a 3.4X average increase in user sessions, meaning that richer, smarter, more state-of-the-art tools–or points of connection–result in a more engaged, less “tired” field.

We’ll dive into this more later, because from this solution alone, it’s not clear what kinds of tools are useful for the New Economy.

2. Consumers Are More Cautious.

Today’s consumers have to navigate inflation, a more uncertain job market, and the pressures of interest rates, all at once. It makes sense, then, that consumer-facing industries like retail and direct selling have seen downturns even among leaders. Meanwhile, as of December 2022, consumer spending on services had jumped 8.7% year over year, reflecting a shift in priorities away from tangible goods.

So part of the reason why direct selling has seen flagging distributor enthusiasm is this–it’s just become harder to sell. It’s harder to get customers to part with their hard-earned money. This is particularly true in the wake of the pandemic, when many consumers were spending more freely and now are tightening their purse strings. How do direct sellers drive field sales performance and behaviors, and thus more revenue (as well as earnings for distributors themselves, encouraging them to stay in the field)?

Again, though this might seem to be a consumer-facing question, it really impacts field operations. A maximally empowered field will be able to convert more customers. Operations and sales leaders would do well to pay attention.

SOLUTION: Embrace digital technology that connects distributor activities to real, measurable sales results. and the achievement of distributor goals and corporate business outcomes, at every turn.

Many technological, distributor-facing platforms simply provide “onboarding tools” or “learning tools” to make these processes easier, “digitalizing” them. While such tools can be helpful, they do not quite meet the moment nor the market, which require field sales performance enablement at every turn. Largely, Rallyware’s “Performance Enablement” model of technology architecture has been built to address this reality.

Performance Enablement means that each action taken by a distributor gets leveraged intelligently by the platform to enable higher (sales) performance. Nothing happens in a vacuum. When the distributor gets recommended learning content, the platform intelligently calibrates the right content to company KPIs (does revenue need to rise? How about retention?) and the distributor’s self-defined goals and sales progress.

The result is not just a “learning journey.” It’s a business-building experience attuned to the shifting needs and goals of the distributor, with the aim of driving the sales performance and behaviors that will benefit her and the company. Learning becomes upskilling, the enhancement of field capabilities. What we see is knowledge for the sake of enablement.

The point here is that it’s not enough to digitalize field operations, but to digitally transform the field experience in a way that enables and prioritizes sales performance. This explains why we’ve calculated that direct selling companies on average +53% sales productivity growth via upskilling in the Performance Enablement model. Distributors become active salespersons, not just reps to be bought from.

3. Distributors Want Direct Selling Companies to Care About Them.

With a larger amount of direct selling companies competing for a smaller amount of distributors, organizations have to stand apart from the pack. Furthermore, consumers generally want brands to care about them, and there’s no reason why distributors shouldn’t feel this way as well: after all, logically speaking, they’re representing a brand, and they should feel connected to it. Distributors want a personalized experience with the direct selling brand they rep–that feeling of, “Oh, they know me.” Having this capability is at the very least a way for an organization to stand apart.

This is a tall ask at a time when companies are competing to see how much they can cut costs. Every week brings a fresh round of layoffs for major companies (Amazon, Meta, Disney, Lyft), and though that wave may not have hit direct selling yet, still there’s the imperative in an uncertain environment to slash expenses. Yet how can you invest in personalization and recognition for the field while trimming budgets?

Surprisingly, you can do both by digitally transforming field operations using the Performance Enablement model.

Solution: Embrace consolidation in digital transformation.

Tech consolidation helps you both cut expenses, by cutting out multiple vendors, and further personalize the distributor’s experience. At Rallyware, we’ve found that the Performance Enablement model for consolidating tech has borne fruit. Customers bring multiple tools under one umbrella, saving money and time spent on separate vendors.

At the same time, data from separate tools flow into the results and recommendations from the others. This leads to an optimally personalized experience, enabling the distributor for sales performance in the way that’s right for her. The business outcomes are significant and measurable. To be specific, on average, our internal research has found, direct sellers see 30.3% sales growth year-over-year when consolidating learning and rewards and recognition tools, versus customers who implement field enablement learning tools alone.

Further, as we discuss in our Performance Enablement Platform white paper, learning activities consolidated with business activities, smart notifications, and social features result in an average 38% increase in productivity.

Cutting costs while doing more with your technology sounds like a paradox, doesn’t it? It’s not, really. It’s simply what’s required to grow in, and transform field operations for, the distributor and consumer of the 2020s. And it’s what Performance Enablement technology is built to provide.

Finally, breakthrough technologies like an Artificial Intelligence (AI) Chat Agent will help the distributor feel a connection with the brand, the company, and its products. In essence, this Chat Agent, as developed and exclusively provided by Rallyware, uses the latest advances in natural language processing to deliver an AI-enabled smart assistant to the distributor, answering her queries and showing her not only answers, but sales aids and suggestions to help her sales performance. With an easy-to-use, mobile smart assistant, the distributor feels cared for. She also feels: this company is on the cutting edge of technology. She trusts them.

Rallyware invests in, and delivers, major leaps forward in direct selling technologies. We’re transforming direct selling today with the tools and products of tomorrow. Accelerate your digital transformation and clear the competition. Request your demonstration today.

The post Can Direct Selling Adapt? first appeared on Direct Selling News.

New opportunities do not guarantee new possibilities. Through my research and study, it has become apparent that the basic profile of society—relative to the distribution of wealth—remains about the same. This is a jarring truth to accept when considering that there are far more opportunities available to the average worker than there were two decades ago.

For the new year to be full of possibilities, opportunities must be chosen, embraced and—most importantly—leveraged. More than 60 million Americans have learned how to leverage their underutilized assets and talents to become active participants in the gig economy. Freelancers, independent contractors and micro-entrepreneurs have discovered how they are uniquely positioned to tap into income-earning possibilities that not only offer financial benefits, but also improve their overall quality of life.

How do direct selling companies attract talent from those interested in flexibility and freedom in how they work which are attributes that have fueled the growth of the gig economy? My research illustrated that six percent of workers participating in the gig economy were doing so as direct sellers. Why is that number so low? When we conducted additional primary research in October of 2021 the percentage of gig economy participants was down to four percent. What changes are needed in order to better attract the talent that is flooding the gig economy?

A New Way to Work

The Great Resignation we recently experienced left a lasting impression on the workforce as we know it. Traditional forms of work are an essential thread in the fabric of society, but a growing number of workers—not only the youngest generations, but also displaced Gen X employees and retirees witnessing their retirements dwindling—are discovering that there are opportunities for multiple streams of income and flexibility that can’t be found in a nine-to-five setting.

Approximately 50 percent of traditional workplaces adjusted their work models to appeal to this hunger for flexibility through the designing of hybrid work models or customizable work hours.

Work from home is no longer a temporary adjustment to a pandemic. It has become a new norm in many cases. Brian Chesky, founder and CEO of Airbnb recently announced the importance he now places on flexibility. His company wants to attract the most talented into its ranks and the most talented may not always be living, or even want to live, in close proximity to the geography which his offices currently reside.

Shopify Founder and CEO Tobi Lutke announced in 2020 that he predicted the office-centric era to be ending and therefore, Shopify employees would not return to an office-centric environment. Shopify, one of the most valuable companies in Canada, allowed most employees to work remotely permanently. In March of 2022, Goldman Sachs CEO David Solomon insisted that all employees return to regular work hours five days a week. It is reported that barely 50 percent showed up!

Those who have leaned into the gig economy, however, find income earning opportunities that are built on more simplistic models. Gig opportunities are typically easy to understand, quick to engage with and don’t require consuming interviews to get started. Pay is prompt and performance based. Gig workers basically hire themselves so they become their own boss as the work is always flexible and dependent upon how and when they would like to work, not a predesigned schedule. The manner in which the work can be done is not dictated by the gig providing company.

Utilizing Leverage

Creating multiple streams of income in a world where inflation is outpacing the average wage increase by three or four times is becoming a possibility, not simply a dream. Through the concept of leverage, workers can learn how to better utilize their underutilized assets to develop these new income possibilities. Underutilized assets can be physical, like a car or extra bedroom, while others relate to time, knowledge, skills, experience or even personality traits.

But assets alone do not a possibility make. Simplicity makes it easy to embrace a new opportunity because it aligns well with the assets you currently possess or minimizes the complexity of a new venture. Where simplicity removes barriers, flexibility removes limitations. Finally, the freedom to choose is the lever which removes restraints. Freedom of choice is not automatic, but rather must be a deliberately chosen path. Freedom of choice now allows the employee to become their own employer, choosing their work terms, their earning potential and their tasks.

The Duo of Direct Selling and Personalized eCommerce

The pandemic accelerated consumer adoption of eCommerce, and the growth now looks to be exponential. By 2040, it is expected that 95 percent of the global retail market will be happening online. This is a generational change, meaning it’s unlikely to be easily reversed.

This paradigm shift has been a boon for online influencers. The personalized marketing touch provided by affiliates can lend incredible benefit and credibility to the big-name brands they partner with. Much like affiliate marketers, direct sellers can earn commissions on the purchases made by customers as a result of their influence. In many cases, direct sellers also benefit when they sponsor others who also influence purchases made by more customers.

Unlike eCommerce offered by the company solely, direct sellers, as intermediaries, can add personality, personal and persuasive attention and follow-up which demonstrates a customer focus. The result: more personalized eCommerce enhanced by more personal relationships, increasing the probability of repeat purchasing and growth through a network of customers. There are no boundaries, limitations or geographical constraints because the direct seller is the intermediary. The company fulfills all of the business-related infrastructure needed to serve customers and other business partners.

The cultural shift that makes online sellers a trusted source and name brands adopting affiliate marketing programs means direct selling, as a channel of distribution which engages people as the intermediary, is in the perfect position for success. Direct selling can be a more preferred choice for those seeking ways to leverage their underutilized assets while seeking new income possibilities. However, direct selling opportunities are often muddled with unnecessarily complex product trainings and confusing compensation models.

The direct sales method can be as simple as find a product you love, share it with others and allow the company to ship directly to customers on behalf of the direct seller who influenced the transaction. Values such as flexibility and freedom of choice should always be honored. Hierarchy, deadlines (if any) and imposed requirements to participate might be reconsidered to become more competitive with the many choices made available by a gig economy that is forecasted to continue to grow at an impressive CAGR of 16.18 percent through 2027.

The New Ultimate Gig

The emergence and success of the gig economy is proof of concept that the marketplace is ready for and receptive to flexibility and freedom in how work can be accomplished. Choices are now abundant, and 2023 represents a year when direct selling companies have the opportunity to flawlessly execute on the shifting views surrounding work that we’ve seen widely accepted over the last two years.

This could be the year that direct selling becomes recognized as the Ultimate Gig!

John Fleming is the author of Ultimate Gig: Flexibility, Freedom & Rewards which provides an in-depth glimpse of the future of work and how the gig economy has fueled the growth and appeal of flexible work opportunities. John is principal of Ideas and Design Group, LLC and in both the DSA Hall of Fame and DSEF Circle of Honor. John is also a recipient of the DSN Bravo Lifetime Achievement Award. John has recently released LEVERAGE, a free eBook download.

From the January/February 2023 issue of Direct Selling News magazine.

The post Leveraging the Gig Economy first appeared on Direct Selling News.

The number of Americans who have some form of side hustle to make extra money—or even need one to get by—has skyrocketed the past three years. The COVID-19 pandemic, rising inflation and technology advancements have helped fuel the rising trend. This is good news for the direct selling industry seeking part-time independent distributors.

According to a survey by small-business insurance company Insuranks, 93 percent of Americans in 2022 have attempted to make money outside of their main source of income with 44 percent saying they need a side hustle to cover monthly bills. That’s up from around 34 percent in December 2020. Many respondents (28 percent) said rapid inflation has pushed them to search for additional ways to earn income. Around one-third said they just enjoy working side gigs.

“Unfortunately, due to high inflation and other financial burdens, more side hustlers are working a side job just to make ends meet,” shared Ted Rossman, Senior Industry Analyst for Bankrate. “Instead of using this income to boost savings, knock out debt or pay for a vacation, there has been a big increase in people who simply use these funds to pay for everyday living expenses.”

Studies by Zapier dig a little deeper into who is starting side hustles, how long they spend on working them as well as the average income they make. On average, Americans spend 13.4 hours per week and are earning more than $12,000 per year working their side hustle. Nearly 37 percent say they make $5,000 or more annually. Roughly 36 percent of people started or planned to start a side hustle in 2022, compared to 24 percent who said the same for 2021. Men and young adults are most likely to start a side hustle, with 44 percent of men and 37 percent of women saying they currently have one.

In terms of age groups, Gen Z (ages 18 to 25) and Millennials (ages 26 to 41) are more likely than Gen X (ages 42 to 57) and Boomers (ages 58 to 76) to say that they currently have a side hustle. However, older adults are spending more time working, while younger adults are earning a higher income per hours worked. Sixty-four percent of Gen Z say they spend less than 10 hours a week working their side hustle compared to 40 percent of Millennials, 36 percent of Gen X and 42 percent of Boomers. On average, Gen Z earns roughly the same amount per year compared to Gen X ($9,537 vs. $9,628).

According to surveys by Self Inc., people spend their side hustle money on: regular bills and household expenses (34.7 percent); disposable income (32.2 percent); and savings and investments (29.8 percent). More than 60 percent of respondents said their side hustles began as a hobby.

While the number of people working a side hustle has drastically increased, more than three-fourths of respondents in the Self Inc. survey say they have been working one for less than three years. Just 9.5 percent said more than five years; 18.3 percent said two to three years; 20.8 percent said one to two years; and 19.7 percent said less than six months. Nearly 50 percent said they started their side hustle because of the COVID-19 pandemic uncertainty and job market downturns.

From the December 2022 issue of Direct Selling News magazine.

The post Gig Nation first appeared on Direct Selling News.

The policy highlighted misrepresentation, such as a company’s promise of independence while also tightly prescribing and controlling a worker’s tasks; diminished bargaining power, meaning little leverage to demand transparency; and concentrated markets, which reduce choices for workers, as areas of concern for gig workers. 

In the policy, the FTC states that they have the authority to enforce both competition and consumer protection laws in the gig economy, regardless of how a company chooses to classify its workers, and reiterated that companies who violate these protection laws could be “obligated to pay consumer redress and civil penalties and may be ordered to cease unlawful business practices.” 

“No matter how gig companies choose to classify them, gig workers are consumers entitled to protection under the laws we enforce,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We are fully committed to coordinating our consumer protection and competition enforcement efforts within the FTC as well as working with other agencies across the government to ensure gig workers are treated fairly.” 

The post FTC to Crack Down on Companies Taking Advantage of Gig Workers  first appeared on Direct Selling News.