19 minute read
The Dawn of Phygital Movement in Direct Selling
The Dawn of the BY GORDON HESTER Phygital Movement in Direct Selling
HERE HAS BEEN A GREAT DEAL OF RESEARCH and ongoing discussion around the pandemic and its impact on direct selling. The data clearly demonstrates the power and agility of direct selling as both a distribution channel T and business opportunity. The pandemic has forced our industry to operate in a world that is more virtual than at any time in our industry’s history. We are facing new opportunities and challenges. The direct selling community is asking, “How will the pandemic require direct selling to evolve so that it remains relevant in the marketplace?” For the first time in history, direct selling is operating in a virtual world; where live meetings are replaced with Zoom calls and virtual events. Social selling became the buzz phrase used by many companies in the industry to differentiate their company from only being seen as a direct selling company. The focus on e-commerce, technology and data are growing at a rapid pace. Our industry is forced to learn new skills and to adapt quickly to succeed in the digital world. The pandemic has changed the trajectory in which direct selling will operate in the future.
The pandemic created a unique challenge for the industry that will continue even after the pandemic is over. The “new normal” will require us to build our business both online and offline. While social selling helped teach distributors how to sell in the digital world, the challenge we face is building culture and community in the world we live in today. Our strength has been defined by our ability to build culture and community offline. This will always be a timeless fundamental to our business model.
The value-add for direct selling has always been people building relationships with people. We always understood the powerful need people had to belong to something. We are masters of “Cultural Addiction,” the behavioral game of building a massive critical mass that included both customers and distributors. Direct selling was built around this fundamental concept. It differentiates us from many of the other businesses that use an independent contractor entrepreneurial model to drive sales, especially the GIG opportunities.
So much of business today exist in the virtual and digital world. I don’t see that changing. On the contrary, I suspect it will grow. Our customers live there. Our distributors live there. Our employees live there. Every part of the direct selling ecosystem is impacted by this change. Ultimately, we are forced to master the experience game both online and offline. This is the beginning of the Phygital Movement that will play an important role in the in the future of our industry.
The term “Phygital” is not a term you hear much in direct selling. Phygital marketing is not a new term. However, I have not seen it used in the transformation of a business culture. Just like selling has created an omnichannel focus, the Phygital movement is requiring us to create a multi-channel approach to delivering a more complete and satisfying experience for those who live within our business cultures.
Anyone that understands the business knows its foundation is built around the customer experience and customer journey. A great example of where this concept is utilized today in direct selling is the focus on UX and UI in the e-commerce world. Technology companies are having to be more innovative in
helping customers enhance the interaction with consumers shopping on their websites. We are seeing new technology tools enhance our ability to succeed in the digital world. Because more are shopping online, all businesses, including direct selling, must master the experience game with online shopping.
As a long-time student of behavior, I have spent much of my career trying to understand and master the experience game. I understand that relationships are correlated to engagement which means they are critical to building culture. Engagement is a simple formula, “Engagement = the triumph of hope over experiences.” When the experience game isn’t working well, hope is all that is left to keep people engaged. However, hope is nothing more than one’s belief system about the future. Our industry is one of the best in the world at marketing hope. Hope opens doors, but experiences are the key to building relationships.
The online world operates in a similar way when it comes to what we define as a “great experience.” Great experiences are defined by five key organizing principles. They need to:
1. BE POSITIVE 2. BE MEANINGFUL 3. CREATE HOPE 4. CONFIRM HOPE 5. MAGNIFY HOPE
There is an important component of experience that matters in both the online and offline world. Hope is a beggar. It requires experiences to both confirm and magnify experiences. If not, hope does not turn into reality. If hope fails to deliver on the expectations we create for others, our industry and those in it will lose trust. Even worse, the loss of trust can lead to an army of brand terrorists and have a profound consequence to the future of direct selling.
The Phygital world requires us to modify the experience game. It is bigger than just selling on social media platforms. This is where we see a much bigger focus on technology to facilitate immediacy, immersion and interaction. We can no longer be relevant as a distributor channel or business opportunity if reliance is solely on building relationships and culture offline. We are forced to connect these worlds to enhance every aspect of our business as to provide a synergetic experience. Remember, people in the marketplace today seek a more connected experience—an experience where the physical and digital coexist in the same journey for both customers and distributors.
Everything starts with awareness. However, awareness has little value unless it turns into
execution. If we are going to master the Phygital game, here are some key components that will help us do that.
Better understand our audience from a behavioral perspective. 1 Embracing segmentation of the different relationship avatars that are critical to the 2 success of building connection and culture.
More journey mapping of touchpoints and embracing data analytics to understand and strengthen the journey of both customers and distributors.
The adoption of emotional and empathy mapping, a tool used in collecting data about customers to better understand the target customer base. They allow you to visualize customer needs, condense customer data into a clear, simple chart, and help you see what customers want—not what you think they want.
3
4
Utilization of new technologies to understand and enhance our ability to win the experience game.5 Train our distributors so they can succeed in the digital world and learn from those who bring that 6 understanding to us. It will require us to modify our thinking around scaling our businesses. To scale up, we must 7 scale down. We must get in the trenches with our people to ensure we see the world from their perspective.
We are at the beginning of the Phygital movement.
Mastering the experience game both online and offline is the “new normal.” It will drive sales, improve customer retention, elevate distributor engagement, attract a different type of talent to our industry, magnify the power of our brands and enhance the perceptions about direct selling. Ultimately, it will ensure that direct selling remains relevant and leads in the marketplace as both a distribution channel and business opportunity.
There will be other key aspects of our business model that continue to evolve. We are seeing a shift in compensation plans and strategies. There will be increased focus on the micro-entrepreneurs and retailers from the customer-centric shift that started around 2016.
The best way to summarize the key to the future of direct selling is through the words of Peter Drucker. Change is often a turbulent time. During these times, we all need to embrace his wisdom. He noted, “The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.” The time to embrace the Phygital movement is now. We must expand how we build culture and community. Those that do will be the future leaders in direct selling globally. DSN
GORDON HESTER is a direct selling industry veteran, lecturer, consultant and an accomplished author. He is on the DSA Research Committee, the DSA Government Relationship Committee and is on the Board of the DSEF. Hester owns a stack technology company, Shapetech Solutions. FABULOUS PARTY MANAGEMENT TOTALLY MOBILE & SOCIAL EMBEDDED BI REPORTING EXTREME CONFIGURABILITY COMPLETE SOLUTION INCLUDED FULLY EXTENSIBLE API ARCHITECTURE THE WORLD SUPPORT ANY SIZE COMPANY ANYWHERE IN DIRECT SELLING SOFTWARE THE INDUSTRY ’ S NEWEST AND MOST ADVANCED
QA &
with Candace Matthews
Recently, we were honored to be able to interview Candace Matthews, Chief Reputation Officer at Amway, and discover more about Candace and what role a Chief Reputation Officer plays.
BY PATRICIA WHITE
AND JOHN FLEMING
CANDACE MATTHEWS has been with Amway since 2007 and is currently responsible for overseeing Amway’s global reputation strategy,
Corporate Social Responsibility and Amway
Brand. Candace is the executive sponsor of
Amway’s Diversity & Inclusion Network, and she serves on the Global Leadership Team,
Amway’s key decision-making body focused on strategy development and creating memorable customer experiences.
PATRICIA WHITE: Before coming to Amway, you were with global brands like L’Oréal, Coca-Cola, Procter & Gamble and General Mills. How did you make the leap from New York to Grand Rapids? Actually, it was quite a welcomed leap. You know, New York is great with all that it has to it, but it also impacts your personal life. So, I was commuting three hours a day, an hour and a half each way to and from work. When I came to Amway, it felt like I gave half a day to my life, and some of the quality of my life dramatically changed. The cultures of the companies were very, very different, and I felt like I had come home. There was some comfort in the familial environment of Western Michigan and of Amway. With family being so important to me, it was just a great place for me to be.
What impressed you about Amway and the direct selling model? Amway is about helping people live better, healthier lives and helping people be in business for themselves, but not by themselves. I found that an amazing thing to be able to be a part of. The other thing is that how important relationships are in this business. Being a people person myself, I just embraced the fact that Amway was a global company. I got to learn about all cultures worldwide by helping our distributors and, particularly in the U.S.A., our Independent Business Owners (IBOs) develop relationships with their customers, and me developing relationships with them. What did you focus on to build the Amway brand and customer acquisition and retention through the Amway Independent Business Owner? The first thing that we had to do was understand what brands were versus just products. Because we were so global, really making sure that we had global brand positioning and a reason for being. Not only the Amway brand but for our key products like Nutrilite and Artistry. In doing so, we were enabled to help our IBOs create value for their customers. They have to “ So, in my role, the main focus have a reason for being. They are an important part of this business model and a part areas are around of Amway. sustainability in JOHN FLEMING: In July of 2020, your role at leaving the planet Amway changed to become the Chief Reputation Officer. The CRO is a relatively new a better place position within the corporate and organizational structure. than what we Could you describe your role and responsibility and what a found it and our CRO means? For me at Amway, the chief reputation officer role is reputation, both responsible for all things that impact the company’s brand. on and offline. That might be things that we currently do or things that we have not yet done that we need to do more strongly to move forward. So, in my role, the main focus areas are around sustainability in leaving the planet a better place than what we found it and our reputation, both on and offline. Also, we focus on furthering our corporate social responsibility effort. In the past, we focused around nutrition and particularly around children’s health and nutrition. When we look at our distributor population, over 70 percent are women, and we’re beginning to focus also our corporate social responsibility efforts on women’s empowerment.
The chief reputation officer does all of this. I also support our diversity and inclusion efforts. It’s thinking about what are the things that impact our company? What do we do to impact others? And how can we make sure that we’re doing it well?
What are your goals as the CRO at Amway? I am part of a big organization. It takes a village and a globe to manage the Amway brand. If we look specifically at some of the goals that our team is working on, it is being the beacon and guiding the rest of the organization.
If we talk about sustainability, we need to set long-term goals that we are actually still working on. The important thing is not exactly what that goal is, but it is figuring out what it is, setting it out, and being very explicit about it so that we can take people on the journey with us into how to deliver it. When you talk about sustainability, you can talk about it from an environmental standpoint, or from a product and packaging standpoint, or even from a human capital standpoint, but nobody can do sustainability by themselves.
It literally takes all of us to be a part of it. The goals that we will be setting are not only for what we want to do for the environment but also for how does each of us plays a part in making it different.
It’s learning that the journey to delivering this is almost as important as ultimately where you end up. That’s probably the biggest difference in all that we do because as far as our corporate social responsibility is, we will just be enhancing what we’ve already done and trying to touch more women around the globe, trying to teach them about entrepreneurship and empowerment in their habitat so that regardless of whether they become an Amway distributor or go into business for themselves, we are helping them with the skills that they need. As far as children and children’s nutrition, that’s foundational to whom we are in making healthier children because healthier children help make healthier families, which is what we want to be a part of.
Will more companies in the direct selling channel add the CRO position? I think it’s something that we all should consider. Because there is what we do as a company, but there’s also what we do as an industry. And within our industry, what one does in a good way impacts others and in a negative way impacts others. It’s something that we should be more cognizant of and be putting more effort behind to make sure that we elevate this entire industry because we want direct selling to be around for a long time.
For that to happen, we all have to do things to elevate it because it’s very easy to build things up, but even more quickly can something be torn down. It is critical for all of us to be doing it.
PATRICIA WHITE: Perception and reputation have long been issues within the direct selling space. We recently did a cover story titled: Direct Selling Redefined - Why Industry Language and the Behaviors that Shape It Need to Change. As the CRO, what is your perspective? I loved that article. I think one of the important things that we have to realize is, as we are providing opportunities for others, we are also providing an experience that they can’t get anyplace else. And that’s what’s important to our industry, and that’s one thing that our industry can have a greater advantage over many of the other industries. It’s that experience. It’s that high touch that we’ve always had. And granted, we have to adapt the high touch to digital, especially after COVID, but that touch is so important. And that’s one of the things that will help elevate our industry.
What is Amway’s vision for the future of the model? Amway’s vision for the future of the model is that we want to make it 10 times easier for people to join and to earn. One of the things that we’ve found as people explore what we’re now referring to the gig economy, getting these side jobs or side gigs to make more money, they have to have easy, early earnings. The three E’s. That is critical. So that’s part of our vision, but not only the easy earnings upfront, it’s making sure that they can then build a business beyond that. Because many can do easier early earnings, but they don’t necessarily take it through to a lifetime of earnings and a business that you can build for themselves. And so that’s what we want to do. We want to make it easier for them to have their business, acquire customers, build a community, and then for them to stay and build a business in the long run.
JOHN FLEMING: As the Executive Sponsor of Amway’s Diversity and Inclusion Network, please tell us more about what that means. Can you tell us about the diversity and inclusion focus at Amway and your role and responsibility as the Executive Sponsor?
Diversity and inclusion for me and at Amway is something that the entire organization is embracing. I want to start with a quote that I love to share. Diversity is like being invited to the dance. Inclusion is being asked to dance, and belonging is dancing like no one’s watching. And we want to make sure that at Amway, that’s how people feel. Our vision is to actively encourage everyone to be their true selves and share their diverse perspectives so that we can unleash their full potential and come up with greater solutions that will impact the lives of not only our employees but the communities we serve, our IBOs and our customers. Be you and be the difference. Allow people to celebrate who they are, bring that in, but listen to that so that we can make better decisions.
Being that we are so global, inclusion is so important because we have to make an environment that welcomes everyone and empowers people from all backgrounds not only to be their true selves but to bring their insights, to contribute to our success. For us, diversity is a workforce that unleashes the power of all these different backgrounds and cultures and experiences and preferences to ultimately help us accelerate growth and innovation. Because when you have all that great thinking, it absolutely leads to better outcomes.
Of the 11 corporate officers portrayed on the Amway Corporate Website, six are women—What significance should we place on this? Our global leadership team really represents the diversity of the business globally, but it also represents the people need to be part of the conversation to help build our business for the future. The DeVos and the Van Andel families, which are still very much engaged and connected, really believed in Amway being an opportunity for everyone. Recently a new CEO, Milind Pant, was brought in from outside of the families. Milind is an amazing CEO, and he put the best people in the jobs. He just did what he felt the business needed, and I commend him for it and the families for supporting it. I commend Amway for leading the way in such an amazingly global and diverse leadership team, and I’m proud to be a part of it.
PATRICIA WHITE: We are very excited that you will be speaking at our upcoming Direct Selling University. Do you have your topic, and can you share some highlights? I’m looking forward to doing that because I’m going to be talking about trends that are impacting the Amway business now and in the future. Just to give you some highlights about what I’m going to be sharing—looking back at last year and the challenges that were caused by the global pandemic, and the social injustices that came to light last year, and talk about how that impacted our business and made us change. Also, around sustainability, particularly environmental sustainability. The third is the idea around making things simple. How do I take these three things and talk about their trends, and what they’ve done to shape our direction?
What is the way you stay true to yourself as a busy executive and as a person, wife and mother? I think for all of us, and particularly for me, staying true to myself goes back to my humble beginnings. I don’t know if you are aware, but I’m from a very large family. I’m the youngest of 18 children. My father was a minister, and my mother was a homemaker. They instilled in us very strong values around faith and education. That type of upbringing and those humble beginnings make me understand that you can never forget who you are or from whence you’ve come, and that titles really don’t make you who you are. It’s really about what you are put on earth to do and give and share to others. And my mother taught me three mantras. She always used to say, “Where there’s a will, there’s a way.” Secondly, “When the Lord closes a door, he opens a window.” And thirdly, “Unto whom much is given, much is required.” Those are the foundational pillars of me.
What do you want to be remembered for? I’d love to be remembered as a person and a leader who loved to nurture people, who loved to develop people, and open doors for others, particularly those who may not have had the chance or the opportunity. And also, around being a lifelong learner. I love learning. I think the day you stop learning is the day you stop growing. I believe in learning and growing all the time.
What would you like to share with us? The last thing I’d say is that I would encourage everyone just to engage and make the world a better place. Being an ally for someone, unlike yourself, or printing less paper, recycling your plastic, use a reusable bottle, instead of something that you’re going to throw away. Think about leaving everything and everyone you touched better than when you found it. DSN
