The evolution of direct selling and network marketing to Direct Sales 2.0
Jessica Kane
Helping MLM’s Grow by adding a DTC Ecommerce Channel Strategy to Compliment the Direct Sales Channel Efforts ?? Ready to 10x? Your consultants are. Let’s chat ??
By Jessica Kane, Geniechat
Network marketing, also known as multi-level marketing (MLM), social selling, direct selling, has evolved significantly since its inception, leading to its integration with modern influencer culture and online sales innovations. Network marketing companies are at risk of falling behind or disappearing without adapting to a new climate of shopper, seller, and team building leader.
The Birth of Network Marketing
1800s: NWM Discovered
- Avon: Claims to be one of the first, having been established in 1886 as the California Perfume Company by David McConnel
Early History of Network Marketing
1940s-1950s: NWM Optimized
- Nutrilite: The roots of network marketing trace back to the 1940s with the Nutrilite company, which employed a multi-tiered sales system.
- Amway: In 1959, former Nutrilite distributors Richard DeVos and Jay Van Andel founded Amway, which became a prominent example of network marketing, using independent distributors to sell products directly to consumers.
1960s-1990s: Adapted with Expansion and Regulation
Growth and Popularity:
- The network marketing model gained popularity as companies like Avon, Tupperware, and Mary Kay adopted and refined the direct sales approach.
- International Expansion: By the 1970s and 1980s, MLM companies began expanding internationally, reaching new markets and diversifying their product lines.
Regulatory Challenges:
- The FTC (Federal Trade Commission) and other regulatory bodies began scrutinizing MLM practices, distinguishing between legitimate network marketing and illegal pyramid schemes. Significant cases, such as the FTC's actions against Amway in the 1970s, helped establish legal guidelines.
The struggle begins for network marketing as the world transforms into digital retail.
2000s-Present: The Digital Transformation and NWM Fatigue
The Rise of the Internet:
- E-commerce Integration: The advent of the internet in the late 1990s and early 2000s allowed network marketing companies to leverage e-commerce platforms, reaching a broader audience without relying solely on face-to-face interactions.
- Social Media and Online Communities: Platforms like Facebook, Instagram, and YouTube became crucial for network marketers to connect with potential customers and recruits, creating online communities and enhancing direct communication.
Influencer Marketing:
- Micro-Influencers: The emergence of social media influencers, especially micro-influencers with niche audiences, has paralleled the principles of network marketing. These influencers often use their platforms to promote products and recruit others into MLMs, blurring the lines between traditional network marketing and modern influencer marketing.
- Brand Ambassadors: Companies increasingly partner with influencers as brand ambassadors, leveraging their follower base to drive sales and recruit new distributors.
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Network marketing companies find themselves struggling to keep up and adapt to a new world of shopper behavior as well as technological expectation.
How to adapt to thrive in Direct Sales 2.0
3 Table Stakes for The Future of Network Marketing
1 - Digital Transformation: Omni-Channel
Suggestion:
- Investments will have to be made in order to update the technology. Complete a full tech-stack review and create a case to keep what you have. Do not allow "it is the way it is" or "its what we've always done" thinking which surely will lead to eventual failure.
2 - Avatar Behavior Across 4 Generations:
Understanding consumer behavior, optimizing marketing strategies, and personalizing customer interactions has never been more complicated.
Suggestion:
- Just like you would creating content in local languages and tailoring marketing messages to fit cultural nuances, you need to do so for generational differences. Map out persona touch points across the entire funnel for every persona, it's no longer one size fits all. Each persona will shop, talk, and learn differently.
3 - Marketing:
Marketing has fundamentally changed because the shopper has changed. Gone are the days of door to door, in are the days of "attraction marketing" and personal branding.
Suggestions:
- Train the sales field to create a personal brand, create the value content, and learn how to engage authentically. Engage 3rd party trainers and industry leaders like Jessica Kane.
- Create brand compliant content that can be shared and used at scale across the entire sales field with an app like Geniechat.
Conclusion - We are already behind, it's time to adapt to thrive
The history of network marketing showcases its adaptability and resilience, however the next generation of direct sales will be one that will surely shake up the industry like nothing we've ever seen before.
Solutions:
Former #1 Brand Partner in the US | Fractional Sales Manager for Sales Teams of 1-30 | Expert in Rapid Sales Team Turnarounds | Uniquely Agitated with Stagnant Sales | Proud Boilermaker | Expect Sports Analogies
8 个月Right on the money as always Jess! When companies shift resources toward influencer model success, we see KPI attainment! The old consultant role is dead.