Modernizing the Direct Selling Channel

 “A good name is to be chosen rather than great riches, and favor is better than silver or gold.”

–Proverbs 22:1

A good name, indeed. The last year has brought great success to many direct sellers. Yes, 2020 was a record-breaking year for total direct sales in the United States. Who could ask for anything more? We could. Despite the success, and maybe because of it, direct sellers have probably received more attention in the press and mass media than ever before, and much of it has been skeptical at best.

Why now, especially in a time that seems to be crying out for the opportunities and products that direct selling offers? That is a question that has been vexing many direct selling leaders across the globe. To be sure, myths, misunderstandings, and misrepresentations about the channel are not new phenomena. Perhaps they are by-products of our unique approach to gaining market share. After all, we are different from fixed retail businesses and other sellers that, for years, have purchased their marketplace credibility and understanding with paid advertising. Direct sellers have always eschewed that approach, preferring instead to devote resources to compensating independent sellers.

This approach may have come at a cost. We have been a “quiet giant” largely invisible to investors, the press, regulators (except for their focus on bad actors), and even the public at large. For us inside the channel, that may be hard to believe when, day in and day out, we have millions of people involved in the business, and we draw thousands to company meetings and celebrations.

The media void left by an industry loathe to spend advertising dollars has, it seems, been filled. Social media has offered an effective tool to the disgruntled, the disaffected, the disappointed, and the disingenuous. Even as the vast majority of individuals who actually have been involved with direct selling have been more than satisfied with their experiences, those few critics, no matter their motivation, have been given a cheap and effective megaphone. And, as we have seen in politics and entertainment, the misinformation and mob mentality of social media has few governors. The megaphone is difficult, if not impossible, to turn off.

More disturbingly, perhaps, is the current willingness of more traditional media to rely upon social media as its barometer of truth. A social media troll is cited as an expert on direct selling, and thus gains greater credibility on social media, and the vicious cycle feeds itself. In turn, government authorities and investors look to social media, or its validating traditional media collaborators, as valid sources of information about the channel and take some misinformed action with potentially devastating consequences for an individual company and the channel. And, in a final ironic twist, the social media platforms themselves respond to the very same misinformation and limit the accessibility to the platform by direct sellers themselves, thus limiting our ability to combat the misinformation.

Not that we are absolved of some responsibility in this conundrum. Beyond our historical unwillingness to participate in the media buys that have traditionally been used by other businesses to earn credibility, we also add fuel to the fire through our use of confusing terminology and complex compensation plans. We would be wrong to ascribe any challenges to unscrupulous or unreasonable critics and our inability to get the real story out as a company or a channel. We have come to understand and acknowledge that there will be problems with a universe of millions of people and hundreds of companies,. However rare or frequent, those problems can be the ammunition used by critics to support their claims against the channel and companies. We must not only get our good story out, but we must also address the problems that do exist.

So, what to do? There have been efforts over many decades to modernize the channel’s image. A turn toward embracing consumer protection issues in the 1970s. The establishment of the Direct Selling Education Foundation (DSEF) to inform the public and key academic and consumer constituencies about direct selling and the public interest. The establishment of the DSA Code of Ethics and effective mechanisms to enforce standards within the Direct Selling Association (DSA). Enhanced membership admission standards and periodic review of DSA members for compliance. Ten years ago, a pilot campaign in selected US markets to test messaging about the benefits of direct selling. Most recently, the establishment of the Direct Selling Self-Regulatory Council (DSSRC) in conjunction with the Better Business Bureau’s (BBB) National Partners program to publicly enforce standards for all direct selling companies, whether DSA members or not. The Direct Selling Compliance Professional Certification Program (DSCP-CP) is available to help sharpen executive's understanding of key concepts related to their company’s compliance program.

These measures have had varying levels of success and hold the key to broader efforts in the future in light of the new social media issues I’ve described above. That’s why the World Federation of Direct Selling Associations (WFDSA) is exploring a global program to build on the previous efforts and address anew how we might modernize direct selling’s image. A special committee composed of direct selling CEOs and executives has been asked to develop options for a new program with considerations of:

  • The role of individual companies in helping to shape a modern image of the channel
  • The role of associations like the USDSA
  • Social media realities and possibilities
  • Self-regulation efforts and how they are viewed beyond the channel
  • Audiences and pilot markets for such a campaign
  • Timelines for actions

The committee has commissioned outside experts to better evaluate how the general market perceives direct selling companies and the channel. It is developing a plan of action to better equip companies and Associations to find new approaches for modernizing the channel's image. A specific plan is anticipated for 2022.

Ultimately, the wisdom of Proverbs will be borne out. And hopefully, the good name of direct selling will result in prosperity for many.