The Direct Sellers Association (DSA) reports there were about 6.2 million Americans actively involved in direct sales or network marketing, at the end of 2020. Despite declining participation, the industry is still going strong with $40.1 billion in retail sales, 7.7 million direct sellers, and more than 41.6 million customers.
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Direct Sales Organizations Face Unique Challenges
The Direct Sales industry is not without its challenges. Increased competition makes it difficult to stand out in a saturated market. According to onlinemlmcommunity.com, 75 to 90% of people leave each year—and even more, staggering—GfK reports nearly 70% drop out within the first year. Knowing what incentives distributors and customers value would go a long way to keeping them active—and discounts alone aren’t enough. Direct Sales has a unique business model that includes multiple layers, and most brands don’t have the resources to focus on keeping the retail base and sales growing while motivating distributors at the same time. Many Direct Sales also aren’t equipped to handle the recruitment and retention of customers and distributors across multiple countries and languages. Direct Sales companies need to know who their top customers and distributors are and reward them in ways that are meaningful to them.
A Direct Sales Loyalty Program Enables Motivation and Engagement at Scale
Lack of sufficient people and technology resources limits a direct sales brand’s ability to keep retail customers and distributors engaged as well as add value beyond purchases—both of which are key for longevity. Implementing a solid loyalty strategy helps drive data-led distributor and customer engagement that builds lasting relationships.
Why launch a Direct Sales loyalty program? Here are just a few of the benefits you can expect:
- Increase Retention—Bain & Company reports a 5% increase in retention can increase profits up to 75%. Loyalty enables value-based engagement that can improve the retention of both retail customers and distributors.
- Accelerate Growth without Discounting—Reward profitable behaviors, such as holding events, completing training, cross-selling, hitting specific sales tiers, or referring others. Hold contests or create healthy competition with distributor leaderboards.
- Simplify & Increase Customer Acquisition—Help distributors gain new customers through advocates, referrals, and influencers.
- Identify and Reward Best Performers—Loyalty programs collect first-party data at scale to make it easy to identify your best customers and distributors, as well as understand what incentives they’d value the most.
- Free Up Distributors—Loyalty does the heavy lifting when it comes to communicating with, motivating, and rewarding end customers, freeing up their time to focus on finding new customers and downline growth.
- Offer Flexible Rewards—Go beyond discounts and commissions to offer products, SWAG, gift cards, exclusive access, VIP events, and more.
Examples of Direct Sales Loyalty Rewards
The possibilities of how to reward retail customers and distributors are only limited by your imagination. Robust loyalty data provides valuable insights about what types of incentives both value but here are a handful of options:
Reward distributors for:
- Signing up and/or buying a startup kit
- Completing a training program or module
- Sales volume (direct and downline)
- Hitting specific sales tiers
- Recruiting new customers and/or distributors
- Being at the top performer
- Participating in contests
Reward retail customers for:
- Hosting a party
- Referring customers or new distributors
- Completing a profile
- Downloading the mobile app
- Being a brand advocate and/or sharing on social
- Moving to a higher tier
- Signing up for a subscription/autoship program
- Being a top customer (offer exclusive benefits)
- Key milestones or events (birthday, anniversary, years as a customer)
Examples of Direct Sales Loyalty Programs in the Wild
Top Direct Sales brands like Mary Kay, Avon, Tupperware, Nu Skin, and Melaleuca know the benefits of loyalty firsthand. Nu Skin is an Annex Cloud direct sales client. Through their Nu Skin enJoy Rewards program, they give retail customers a welcome gift for their first order, reward them for signing up for autoship, and offer exclusive rewards and promotions to VIP members. Shaklee, another Annex Cloud Direct Sales client, offers rewards for referrals and birthday gifts, and lets members go to the front of the line for new products and exclusive promotions. The Avon Rewards program has six levels that include varying benefits—such as exclusive gifts, cash bonuses, higher commissions, and exclusive pins and necklaces for rising stars that hit specific sales levels. They also give out awards for being a Visionary, National Spirit (role model), and Guiding Spirit (nominated individual). Tupperware’s Loyalty Club rewards customers for creating an account, signing up for their mailing list, writing product reviews, and referrals. Higher tiers get double points, exclusive pre-release offers, and discounted shipping.
Annex Cloud Is Here to Help
Current Direct Sales back-office technology is focused on tracking quotas and commissions vs. retention—and ecommerce software is either proprietary or unconventional, making it difficult to integrate with typical loyalty providers. Annex Cloud’s Loyalty Experience Platform™ Unlike limited, siloed, transaction-based loyalty solutions, our Loyalty Experience Platform™ is purpose-built and extensible to become the heart of your digital technology stack, enabling direct sales organizations to build lasting customer and distributor bonds while accelerating growth. Combining best-in-class loyalty management with powerful engagement and communication modules, the platform is modular, so you buy just what you need. Learn more about our Direct Sales loyalty program.