Clues from the World Economic Forum on the Destiny of Direct Selling

Michel Bayan, Co-Founder and CEO of DirecTech Labs

One central theme at Davos this year is equal opportunity for women. Another is the concept of raising the bar in terms of what it means to be an ethical business that does good by its customers, communities, workers and shareholders.

 

We are the industry of women. The industry of giving back. The industry of global equal opportunity. But in this rapidly evolving world, what we still need to work on is the experience people are having with our brands from the beginning, all the way through the lifecycle.

 

Our customers and fields are so incredibly diverse, but the way we communicate with them is far from it. Another theme in Davos is AI and automation. One of the biggest areas this technology is being put to use is in the area of behavioral science. Understanding that people aren’t just diverse in terms of culture, race or gender, but diverse in terms of potential and the kind of communication they need to maximize that potential.

 

It used to be that we didn’t have the data or the means to analyze and understand our people as individuals. So we gravitated towards a macro view of them. We searched for the one approach or system that would advance a higher and higher percentage of them up the ranks of a comp plan. A tremendous amount of thought, planning and energy has gone into this mode of thinking about how to grow a DS business. What’s that one message? One training program? This mode has served many companies in the past, but now it’s beginning to suffer a painful death.

 

There is now an inflection point of big data, AI, transparency and behavioral science. These advances are coming together to raise the bar on how companies should ethically and effectively interact with people.

 

When used properly, they pave the way for the direct selling of the future solving the Achilles heel of the channel. This has been so incredibly effective and capital efficient, yet hyper inefficient in terms of maximizing the potential and value of people.

 

The evidence is there in Incredibly high churn rates, terrible PR issues, impatient and sometimes hostile government regulators and an overall negative industry image. There’s a lot of room for improvement. A few DS companies are beginning to abandon the “one system” philosophy. Instead, they are using technology and behavioral science to understand their people more deeply to create communications and programs designed to appeal to the individual in front of them. The DSA took a big step in this direction by popularizing the concept of segmentation: the concept that different people behave differently within a DS context.

 

Our studies reveal that there are more than 3 segments. We’ve analyzed the life cycles of 5.4M distributors in 30 countries. We interview a countless number of executives and sellers, and we continue to help larger DS companies create hyper-targeted communications designed to maximize the value and potential of each individual.

 

During this time of uncovering deeper truths behind what really motivates sellers and customers to stick with our companies (and in parallel with many conversation happening in Davos this week), many deeply ingrained ideas and practices will be challenged. Some will dig in their heels. Some will take a stand and play a role in reshaping the soul of direct selling. And when they are inevitably successful, we will arrive at a form of direct to consumer, social selling, marketing and servicing that will make the old system look like a horse and buggy in the age of self-driving, electric cars.

 

Michel Bayan is the CEO and Co-Founder of DirecTech Labs, a behavioral science and AI company partnering exclusively with direct selling companies. Known as a futurist within the DS space, Michel has been working with DS companies around the world since 2011.

Learn more at www.directechlabs.com