Could the Need for Self Regulation be a Symptom of Something Deeper?Michel Bayan, Co-Founder and CEO of DirecTech Labs
So much energy is being put into self-regulation. It’s needed of course to prevent bad actors. Symptomatic medicine is effective, but wouldn’t most people agree that getting to the roots of an issue is far more effective than cutting off the branches that grow from those roots? Part of the way this pressure to self-regulate came to be is due to a terrible inefficiency of the DS model. The inefficiency of people.
We all know direct sellers offer spectacular opportunities for people. But we also know that the vast majority of people that come into contact with our companies will not build a successful business. Yet we focus so much of our energy on training programs, incentives, and promotions in an effort to maximize the number of people who will get to where a small fraction of people ever do. This builds pressure into the system. Pressure to get to a goal in order to gain social acceptance from the community. Pressure to go for goals that are beyond the reach of most people. This pressure leads to a disproportionate number of people who leave their experience with a DS company frustrated, angry and sometimes feeling like they’ve been taken advantage of. Whether that is true is a completely subjective point. It all comes down to the feelings of the individual. Here’s what is objective about this: The voices of people with who perceive they have had a negative experience are louder than ever. Especially due to the high churn rates in the industry, as a company grows (plus all the companies in aggregate) the number of people out there with negative things to say about direct selling begins to outnumber those with a more positive sentiment. Those negative voices are amplified by social media. So it’s not difficult to imagine that consumer protection groups and regulators are going to look at us with increased scrutiny. Not to mention the fact that this negative sentiment hurts your distributors’ chances of gaining new customers and recruits, impacting their confidence and effecting attrition rates negatively.
But there’s a cure for this disease. It’s powered by AI. A very hocus-pocus term to many, “AI” or “machine learning” can be used to describe lots of things, but here’s a simple way to think of it in this context. A well trained AI can tell us which of our people will actually be someone with a real chance of building a successful business. It will also break people up into groups based their capacities. So we can identify those who are going to go big, support them in that and at the same time, give a totally different type of support to those who will never be that. Those who may just be happy making $300 a month every other month for 5 years. Or those who may just sell opportunistically. Even customers behave differently. It may sound overwhelming, but in truth, while hundreds of millions of people have been in and out of a relationship with a DS company, there are really only about 10 unique paths a person involved in your business can be on. Once you know which path that is, you can predict their behavior far in advance. Once you can do that, you can use behavioral science to communicate to people based on their behaviors, capacities, personalities, and potential. When that happens, imagine what that will do to drastically reduce the number of people coming out of our companies with a bad taste in their mouths. Imagine how much longer people will stay with your company. The lifetime value of a customer will go through the roof.
This may sound like something new, complex and out of this world, but the fact is, this kind of tech is being used to influence your behavior every day. Across virtually every industry. It’s even all over the news. Ever heard of Cambridge Analytica? Yup. That’s exactly what they did. We should certainly question their ethics, but the fact is the techniques are brilliant. Done transparently and in the name of service to our customers, this technology is making billions for the likes of Amazon, Netflix, Airlines, etc. It’s even helping the Chicago police predict when a citizen will commit murder and prevent that from ever happening. If it can predict murder, it can tell you what type of experience your people are looking for. Or when they aren’t getting what they need and are on a path to leaving you.
When more people are having their expectations met, the reputation and regulatory landscape of direct selling will be completely transformed. People will be happier and companies will make a LOT more money. Everyone wins.
So why don’t we put as much energy into that as we do into lobbying and self-regulation? A behavior therapist once told me, “It’s not about the why it’s about how you’re going to be different now.” So let’s invest in self regulation. But remember the roots.Want to learn more? Click here