Remember the Pepsi Challenge? It was most memorable during the height of the Cola Wars in the 1970s and early 1980s. PepsiCo upped the ante in its decades-long battle with the Coca-Cola Company, then the world’s most valued brand, by engaging in a head-to-head showdown that had consumers deciding the winner.
The strategy for the Challenge was to create a memorable consumer experience that would result in customer acquisition and long-term brand loyalty. PepsiCo executive John Sculley, the creator of the Challenge, realized that Coke had the greater brand recognition. But if consumers could try the two sodas in a blind taste test, then, perhaps, some could be won over to the Pepsi side. He was right. Millions did choose Pepsi, and within a few years his company was closing the gap on Coca-Cola’s market dominance.
That success caught the attention of Apple Co-founder Steve Jobs, who was as focused on “connecting the dots” on customer needs as he was about changing the world through technology. In 1983, Apple was getting ready to release the Macintosh, and Jobs wanted to develop a marketing strategy for it similar to the Pepsi Challenge, one that introduced the Macintosh but sold the experience of Apple. Jobs convinced Sculley to leave PepsiCo and join his company as CEO. Sculley did, and one of the first ads he produced was released eight months later—the dystopian “1984” commercial that challenged consumers to be as uniquely original and bold within a sea of conformity as Apple.
Jobs’ total commitment to the consumer journey— from the design and functionality of products to marketing, sales, and customer service touchpoints—helped Apple gain a fiercely loyal customer base. It also helped it become the first and, so far, only American company to reach a $2 trillion market value, and, according to Forbes’ 2020 World’s Most Valuable Brands, earn the mantle of the most valued brand in the world today.
The Customer Experience
The Direct Selling Association (DSA) recently reported in its annual Growth & Outlook survey that 2020 was a record year for direct selling in the United States. The industry achieved record highs in:
- retail sales—$40.1 billion,
- number of direct sellers—7.7 million, and,
- number of customers (preferred customers and discount buyers)—41.6 million.
Compared to 2019, direct sellers increased by 13.23 percent, and customers increased by 12.73 percent. Was the increase spurred by the pandemic? The answer is likely yes. So many workers were displaced in 2020, particularly women—who coincidentally made up 75 percent of the direct selling salesforce last year.
AdvoCare International, which offers wellness and weight management products, saw 4,000 new customers join the company over a threemonth span last summer. It occurred during the company’s largest customer acquisition event, Summer of Spark.
“We spent June, July, and August just emphasizing that product,” says Christina Helwig, Senior Vice President of Global Marketing at AdvoCare. “We introduced new customers through a sample pack. It was a really fun customer experience.”
The event was so successful—with new and existing customers posting about it on social media—that AdvoCare will relaunch it on June 1, 2021. The new event will initially begin with the Summer of Spark focus, but Helwig says it will become a permanent customer acquisition strategy, evolving seasonally with the offer changing.
Another acquisition strategy that helped the Richardson, Texas-based company was being more intentional with non-product information and education. During these events, they did not sell products but rather connected with customers to share what the company had to offer in terms of education around general health and wellness. The information was presented through the company’s Five Pillars of Wellness, which focuses on nutrition, and its Workout Wednesdays.
Helwig says the company did see an influx of customers last year through these customer acquisition strategies as well as its digital marketing efforts, which they will be increasing this year. In 2020, they also took advantage of hometown media, with a few segments on Good Morning Texas. The TV spots featured friends and partners in the nutrition space, including Dr. Lauren Horton, who leads AdvoCare’s internal scientific and development team, and former Dallas Cowboy Jason Witten, who is an advocate for the Spark product.
This year they will add something new to the mix— targeting potential customers through Connected TV, which is premium content streaming that allows brands to reach customers on smart TV devices like Roku and Apple TV.
Xyngular, based in Lehi, Utah, had what Senior Vice President of Marketing Wendy Garrison calls “an astonishing year.” She says the growth the health company experienced last summer was unprecedented.
“In May and June of 2020 we had an astonishing number of both distributors and customers join,” Garrison says. “We had spent several months promoting and reinforcing important foundational messaging for both our distributors and our customers. Just as we started to see it take hold in our field, the pandemic hit.”
Garrison says the company looked at all of the economic factors that played into the surge of customers and landed on a simple truth: being in exactly the right place at the right time.
“They were in a position to share amazing stories with people who were, for maybe the first time in their lives, considering having a side business to help as they were worried about the potential loss of jobs or income changing because of the shift and impact of the pandemic in their regions,” says Garrison. “We knew a lot of people were preparing for what may come. We were right there with an entry point that made it easy.
“I have to give credit to our amazing distributors,” she says. “I have never seen anything like this. I think they are why we have such a unique customer experience. Customers see that welcoming spirit and they feel proud to represent these products because the distributors are just so good.”
A Connected Journey
Today’s customer journey differs from that of just a decade ago. The difference can be attributed to innovations in technology and the preferences of generational cohorts, such as making purchases on smartphones, but it is also the outcome of the pandemic. The shopping experience changed during 2020, with customer demand for alternate payment methods and options for pickup and delivery continuing through today. What customers mostly wanted, however, was a personalized experience from the brand.
In Salesforce’s 2020 “State of the Connected Customer” report, 66 percent of consumers surveyed stated that they expect companies to understand their needs and expectations. The report also found:
- 80% of customers said that the experience with a company is as important as its products and services.
- 71% say they have made a purchase decision based on the experience quality
- 91% say they are more likely to make a repeat purchase after a positive experience
Customers also expect the dots to connect during their journey. Another Salesforce report, “Trends in Integrated Customer Experiences,” shared that 76 percent of customers expect consistent interaction across departments, and 70 percent say connected experiences such as seamless handoffs between departments are important to winning their business.
Disjointed experiences are less tolerated these days. Almost 49 percent of consumers have no patience for disconnected experiences, and 54 percent say three departments—sales, service, and marketing— appear not to share information.
There are times in every company, in every industry, when the vision for the customer experience just does not happen. But I think we have truly been able to create that—whether it’s a product promotion, a sales incentive, or a new product launch."
—Christina Helwig, Senior Vice President, Global Marketing, AdvoCare
Technology can enable companies to make purchasing products smoother and easier, but the consumer experience really is about personalized engagement, and the majority of the experience for the consumer is the interaction with people in the company—distributors and service representatives directly and, indirectly, the marketing, legal, and other teams tasked with creating the overall experience. In other words, while the purchased can be mechanized or digitized, the experience is human centric.
AdvoCare’s relationship with customers is unique. Almost two years ago the company made the decision to transition to a single-level compensation structure. While the revision of its business model caused changes to company operations, it actually allowed AdvoCare to be more successful during the pandemic, because when the transition began in May 2019, the company took time to investigate internal processes and research what its customers really wanted.
“It allowed us to develop the best partnership between sales and marketing than maybe we have ever had,” says Helwig. “There are times in every company, in every industry, when the vision for the customer experience just does not happen. But I think we have truly been able to create that— whether it’s a product promotion, a sales incentive, or a new product launch.”
AdvoCare’s new customer acquisition numbers have grown since the compensation structure change took effect in July 2019. From August 2020–December 2020, the company experienced a 15 percent increase in new customers compared to the same time period in 2019. And this year, from January 2021–April 2021, it had a 23 percent increase in new customers compared to the previous year.
We are a distributor success company. We cannot be distributorcentric without also being highly attuned to the success of our customers. Our distributors cannot be successful without customers. So we need to focus efforts on that experience for the customer. It’s our job to serve both of those audiences the best way we possibly can."
—Wendy Garrison, Senior Vice President, Marketing, Xyngular
Another change in the last year relates to the technology supporting the AdvoCare customer experience. Helwig says that the company had been considering a move from its existing IT platform to a fully cloud-based platform, and the events of 2020 helped to confirm that decision to transition.
“Once we saw customers’ needs changed across every platform last year, we determined it was the right thing to do,” she says. “We’ll be launching the e-commerce platform early this fall.”
The combination of cloud-based platform and the company’s digital experience will allow AdvoCare to provide a more personalized shopping experience, including product recommendations, alternative payment methods, promo codes for targeted customers, saved carts, full customer mapping for even more customization, and an email journey that is more specific than it is today.
“The pandemic pushed us to realize this investment is the best thing we could do, and we are excited for it to come out in the fall,” says Helwig.
Xyngular made an investment in marketing intelligence and customer experience—building expertise internally to better understand customers, competitors, and new market opportunities. The efforts around intelligence have yielded a much deeper understanding of purchasing behavior, patterns, and consumer tolerance for change. This helps the company keep up with challenges that are becoming more commonplace, such as handling customers who are dealing with longer than normal shipping times because of supply chain issues.
As for customers, who are often also prospective distributors, the customer journey begins when they buy and continue with an onboarding strategy crafted to simplify their first experiences and help them find quick successes. The company is constantly working to improve both the buying and the onboarding experiences, knowing that its ability to deliver quick wins is essential.
“We have a robust collection of content online that keeps them involved in a community, and that has been a big play for us—to help them join in that community and then share information and ideas with each other,” says Garrison.
Since the pandemic the company has altered the way it communicates with customers, which has actually resulted in improvements in connected experiences.
“We have done a great deal of research to improve our ability to reach customers where they are—from how they consume content, to how that content drives their experiences with Xyngular, with each other, and with our products,” says Garrison. “We are uniquely invested in the success of those experiences and the relationships that result from them.
“We are a distributor success company. We cannot be distributor-centric without also being highly attuned to the success of our customers. Our distributors cannot be successful without customers. So we need to focus efforts on that experience for the customer. It’s our job to serve both of those audiences the best way we possibly can,” Garrison says.
Customer Retention Strategies
The influx of new customers and distributors has been a boon to many direct selling companies, but there is fear that once life returns to some semblance of normality, those who joined because they could not get products elsewhere or needed a Plan B to supplement their income might slip away. Hence, customer retention strategies are now even more important.
AdvoCare has increased its retargeting of ads on digital platforms, expanding beyond the main social selling sites like Pinterest and YouTube. The company also is using the Connected TV platform for retargeting. But the greatest change in its retention strategies is the use of artificial intelligence (AI).
In the past, AdvoCare’s retention tactics started when customers were about to leave the system, based on the renewal time period. Over the last nine months, however, the company has implemented more AI to try to pinpoint when customers become less engaged. When they find that moment, they then target the customer with an opportunity that will make it more simple and more fun to stay engaged and active.
“Whether it is someone early in their journey, like ninety days, or someone who has been with us longer but whose activity is tapering off, we try to pinpoint when to target them through AI so we can keep them engaged and hopefully coming back to shop again,” says Helwig.
That tactic is working. By using AI, the company is seeing success in its preferred customer renewal rates—an uptick of 6 percent up over the last six months in preferred customers who are up for renewal after their first year. In addition, it has seen a 19.4 percent order rate when targeting customers who otherwise are not likely to place another order.
“This is our biggest win,” says Helwig. “We are continuing to learn and continuing to dig into AI to drive retention.”
Xyngular also invested heavily in retention programs, adding new communication tools to its messaging arsenal. While it already had a strong email foundation, it added texting to amplify the foundational messaging in the emails and on its landing pages. According to Garrison, the communication strategy has changed dramatically to drive retention.
Garrison says Xyngular has also added additional communication tools designed to drive retention by providing actionable customer insights to distributors. Instead of the company engaging directly with customers with important reminders or notifications, Xyngular provides text-based reminders to distributors so that they better serve their customers—with a much better understanding about what drives and motivates them. The company wants customers to have an affinity for the brand and the products, but it also wants them to have an affinity for the person who introduced the products to them. Xyngular believes this will build trust with between distributors and customers and strengthen customers’ confidence in the company as well.
What is also driving changes to Xyngular’s retention strategies is an interesting shift that occurred in its audience last year. Historically, the company’s core group was the 35–55+ crowd; however, there was an unexpected influx of millennials in the last twelve months. The way they consume and share information has required a shift in how the company communicates and the tools it uses to reach them.
“This addition to our audience has brought new expertise to our teams and helped us bring new strategic insight to our base so that they can better, more effectively communicate with and serve this new audience,” says Garrison.
So the company immediately invested time in implementing a tremendous amount of social advertising and social messaging that would appeal to this cohort. The company also buckled down on education for both its products and business opportunity, and on using the data on customers and the field gathered by their customer experience and market intelligence teams to refine retention strategies.
“Retention is one of the most important measurements that we have, and our fear was that people would come in under unusual circumstances and not build the trust with us,” says Garrison. “We knew our retention numbers would be a critical measurement of how we truly weathered the pandemic and how well we prepared our field to come out of it strong. It is, and will remain, a key focus of our 2021 sales and marketing strategy as we move into a new normal.”
Lines of Communication
In the last year, communication with distributors and customers has been critical because of disruptions to normal business operations. The pandemic caused issues in several areas, particularly in supply chain, which impacted the fulfillment of product orders.
In a recent DSA survey, 85 percent of participating direct selling companies indicated global supply chain issues were impacting their businesses. Transportation delays outside the US were the most frequently cited issue (74%), followed by production delays outside (72%) and inside (64%) the US. In addition, 28 percent indicated supply chain staffing issues in the US.
The most important thing our market intelligence team does every day is talk to our customers. We are deeply involved in how they experience what we sell to them. We make sure we know how to talk to them and with them, and not at them. We are students of our customers all the time."
—Wendy Garrison, Senior Vice President, Marketing, Xyngular
Helwig says AdvoCare did experience issues with obtaining product ingredients as well as in manufacturing and packaging, but those issues have been overcome. They are still dealing with additional costs that arose as a direct result of the pandemic—a price increase in corrugated materials and surcharges from shipping carriers—that they do not anticipate going away. However, the company is absorbing the costs rather than passing them on to customers.
“We increased all our conversations in this area to be more transparent on both sides in terms of what we needed and what we were seeing,” Helwig says. “We met more frequently with manufacturers and started making projections further out that we normally do so we could place purchase orders. Internally, we were transparent with distributors and adjusted our promotions accordingly.”
Based upon internal conversations, the company updated out-of-stock dates and, for the first time, implemented “out of stock notifications” so customers could sign up to receive an email when the product they wanted came back in stock.
Xyngular ran into the same issues that AdvoCare and many other direct selling companies faced in that its supply chain was greatly affected by global issues. Products came in much more slowly than normal, and some suppliers could not deliver at all because of packaging troubles.
In the early months of the pandemic, when supplies were unavailable and product shipments delayed, the Xyngular team decided to break open its product systems so people who had recently joined the company would at least receive some product.
“What we found was their confidence in us grew pretty dramatically over the course of those weeks,” says Garrison. “We determined it was better to not make them wait. They had paid for the kit. Plus, they were feeling anxious and stressed in other parts of their lives because of the pandemic, so why make it any harder on them by making them wait?”
While sending out the partial orders resulted in a confidence boost with customers, Garrison believes that the greatest difference was the transparency and honesty with which the company communicated with customers. Not only did it help to strengthen the relationship, but it also resulted in increased participation from customers on surveys and questionnaires sent out by the customer experience team.
Listen and Learn
The business of acquiring customers, gaining their loyalty, and retaining them as brand ambassadors takes much operational planning and preparation, but each phase has two simple commonalities at which successful companies excel: the ability to talk to customers and, more importantly, the ability to listen to them. These attributes create the basis for a powerful and memorable customer experience.
“The most important thing our market intelligence team does every day is talk to our customers,” says Garrison. “We are deeply involved in how they experience what we sell to them. We make sure we know how to talk to them and with them, and not at them. We are students of our customers all the time.”
From a strictly operational standpoint, understanding consumer needs and motivations helps to drive business, and thus, profits. If a company does not know its customers, it will never be able to serve them well. It will never understand the importance of the customer journey.
But direct selling companies are unique in that most are mission-driven. While they obviously want to be successful, they also want to make a difference in the lives of others. The research and data they gather on consumers serves them well in bringing the lives of their customers clearer into view. And that clarity can bring hope—hope in the form of a product that meets the customer’s needs or allows the distributor to earn supplemental income in the event of a sudden job loss. Hope, for some, can also come in the form of a community of like-minded individuals that offer much-needed emotional support.
“What I saw more than anything else this past year was people finding hope,” Garrison says. “When they had a bit of success in getting healthier or building their business, it was incredible to see the confidence grow. The community was there to support them, cheerleading for the smallest wins.”
But small wins have always been the stepping-stones to greater success. And for direct selling companies, those wins are markers along the customer journey