Would you invest in networking marketing
Direct sales in the age of online trading - what is the secret of success?
Ms. Heitmüller, can you briefly explain what distinguishes direct sales from other types of sales?
In direct sales, personal contact and individual advice are the focus of the sales pitch. Therefore, direct sales are particularly suitable for high-quality, innovative products that require explanation. In addition, there are no intermediaries. In most cases, a direct sales company works with independent sales partners or sales consultants who sell the products to their customers in personal sales meetings or at sales parties.
Is it the flexibility that comes with working as an independent sales partner that makes the industry so attractive, especially for women?
The industry is particularly interesting for career changers, as it is very easy to get started. For example, there is no age limit and no education that is required. Many women use this opportunity to get back to work after the parental leave break.The industry is particularly interesting for career changers, as it is very easy to get started.
The independence and flexible time management help women build a career and at the same time take care of their families as much as they want.
However, there are also men in direct sales. They often work for companies that sell technical or construction products. The proportion of men in the BDD member companies is 28 percent.
According to a study by the Society for Consumer Research, 99% of Germans are familiar with Tupperware and over 80% of households own at least one product. Can you explain how Tupperware got this notoriety? What's stopping other direct sellers from getting such results?
For the most part, direct selling companies do without loud, intrusive marketing measures. The advertising budget you save in this way is invested in the quality of your sales team. Tupperware has been active in Germany for over 55 years and has had a lot of time to establish itself.For the most part, direct selling companies do without loud, intrusive marketing measures. The advertising budget you save in this way is invested in the quality of your sales team.
The company owes its fame primarily to the invention of the sales party or Tupperware party in the USA at the end of the 1940s. For Tupperware, the sales concept of inviting several women in private and presenting them to the products that required explanation and having them tested was the breakthrough. The informal get-together and the effect of being able to buy popular products on the side naturally got around among the women. Organizing a Tupperware party became increasingly popular and well known. By the way, not only is Tupperware very well known, but also the Avon consultant, who has been selling cosmetics to women for over 100 years.
Ok, that was the 40s and 50s, but today Amazon is driving public perception. How does direct sales manage to keep growing despite the steadily increasing sales figures in online trading?
Compared to internet trading, direct sales have the great advantage that guests receive personal and individual advice. The fact that only every 100th order with our member companies is canceled speaks in favor of direct sales. In online trading, around every 10th order is returned. The sales consultant gets to know the customers personally and can therefore ideally respond to their needs. So the customer is also more satisfied in the long term. In times of online shopping, people long for personal contacts and individual advice that meets their needs. Sales parties have thus established themselves as the counter-trend in online shopping. This trend goes on and on. The industry has doubled its turnover in the last ten years.
You said earlier that, among other things, the casual get-togethers brought the Tupperware party forward in the 50s. Is that why sales parties are still so popular today?
Sales parties are also today for sociable hours with friends. Of the almost 11.2 million orders recorded by the BDD member companies in 2016, 72 percent were placed at sales parties.Sales parties are also today for sociable hours with friends.
The sales party is therefore the most popular form of direct sales. You can try out the product with friends and exchange ideas and make recommendations. The advantage of a sales party is that customers do not have to queue at the cash register or the changing room. Of course, the fun factor should not be underestimated either.
In addition to reputable direct sales companies such as Tupperware, one hears again and again of pyramid schemes in connection with direct sales. How does legal and legitimate network marketing / multi-level marketing as a form of direct sales differ from pyramid schemes and what is your association doing to combat illegal pyramid schemes? Are there currently still pyramid schemes in Germany?
Unfortunately, there are black sheep everywhere, but they have little chance in direct sales. Our industry is very well networked. Unfair business practices get around quickly among sales partners and customers and are combated with all available means. Our association has clearly formulated standards of conduct, which all members undertake to adhere to. Only those who behave fairly can be successful in the long term. A pyramid scheme can be recognized, among other things, by the fact that the focus is on recruiting new sales partners, in which a company enriches itself through mandatory investments. In addition, dubious companies often advertise with unrealistic incomes. For reputable multi-level marketing companies, the sale of the products comes first. Potential sales partners are informed in detail about their income opportunities.
When you say your industry is well networked, does that also mean digitally? Has the direct selling market become more digital? Do you see an increased use of e.g. CRM, newsletter or analysis software in direct sales?
Direct sales have adapted and are increasingly using the advantages of digitization to their advantage.A CRM system that is perfectly tailored to the needs of the company, the sales partners and the customers can have a sales-promoting effect in the hands of an experienced salesperson.
In a direct selling company, the sales team is the most important link between the customer and the company. With a successfully implemented CRM tool, this connection can be strengthened and significantly improved. A CRM system that is perfectly tailored to the needs of the company, the sales partners and the customers can have a sales-promoting effect in the hands of an experienced salesperson. To achieve this, these tools must strengthen personal customer contact and improve the quality of advice. Analysis tools have been used in companies for a long time. However, it is important to convince the sales team of the advantages of digital helpers.
How important is the acquisition of existing customers for the sales team? Are customers often “repeat offenders” or is new customer acquisition central?
Every sales partner who starts anew has to build his own customer base. New sales partners acquire new customers more often than the established salespeople. Nowadays, acquisition often takes place via social networks. There you can invite to a sales party and turn first-time party guests into regular customers. The enthusiasm for the product that is being sold is often carried over to the customer. After the purchase, the quality of the product is usually convincing, which makes the customer a "repeat offender". An honest and trusting relationship between consultant and customer also helps to retain the customer.
Thank you for the interview, Ms. Heitmüller!
Are you interested in direct sales? In addition to this, the following additional articles have appeared in this series:
What is Direct Selling? Definition and examples of the traditional sales channel
Network marketing vs. pyramid schemes - do pyramid schemes also work in summer?
Direct sales in the age of online trading - what is the secret of success?
The pictures contained in this article were kindly made available to us by the BDD.
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