Joseph Mariano, President and CEO of the US Direct Selling Association (DSA), will be the first person to tell you that the people in the direct selling channel are good people. However, he will also tell you that it’s hard to communicate that fact when there is “misinformation, misrepresentation, and certainly misunderstanding of the direct selling channel and what we are.”
All too often, the story of direct selling and its people depends on who is driving the narrative. Critics of the industry are crafting their narrative and distributing it across social media platforms, even organizing into online groups to lend greater credence by way of their collective voice.
Direct selling leaders know they must do a better job of telling their stories and dispelling the myths that exist about the channel. How do they do it? They can begin by creating greater awareness about their brands among mainstream consumers, ensuring their cultures align with and reflect company values, and working together to protect the channel from unwarranted attacks.
Greater Brand Awareness
It’s said that reality has its limits, but imagination is boundless. Imagination can take you anywhere. But if you’re talking about it in the context of a company’s reputation, imagination can have a debilitating and lasting effect. In the absence of knowledge, people will fill in the gaps. Especially those critical of your business. Therefore, awareness is key. For direct sellers, that means awareness of the brand and the people standing behind it.
Cindy Droog, Vice President of Global Strategic Communications at Amway, says some business leaders don’t realize that brand building and brand awareness are tied to a company’s reputation. She says that underrepresentation of the brand and the lack of investment in reputation management studies can have a negative, and sometimes costly, effect.
“Put simply, if people don’t know you, what evidence do they have that they should trust you?” says Droog. “In general, trust in our business institutions was taking a big hit, year after year, until the pandemic came along and it became evident that we play an important part in the country’s ecosystem—in its economic recovery, in saving the environment, and in raising up people through meaningful work.”
Making the investment in brand awareness is somewhat new for Amway. When the company started in 1959, founders Rich DeVos and Jay Van Andel put their money into the field instead of into traditional consumer advertising. But current executives realized that even though the company is the largest direct selling organization in the world, they must invest in building that awareness.
Of course, Amway is an $8.5 billion company and has the money to do so. Is it financially feasible—and even necessary—for smaller companies to invest in awareness campaigns and reputation studies? Droog believes it is. A large investment might be unrealistic, but smaller companies can start small—one city or one region where there is a large concentration of sales representatives is a good starting point because it’s likely they’ll carry the message farther and faster than the company can.
“You can even start by asking the field a simple question: What barriers do you have in getting customers to buy or people to listen about the business opportunity?” Droog says. “Use their answers as an early warning system to know how people see you. Put teams in place to resolve each pain point. The costliest effect of not knowing what’s impacting your reputation is losing people’s trust in what is a people business.”
A significant aspect of brand awareness lies in the recognition that branding is not just a “marketing thing” because it is not. It’s a cultural mindset. Everyone in the organization—from the C-suite to employees to the field—is charged with presenting the company values aligned with the brand. As Mark Stastny, Chief Marketing Officer at Scentsy, points out, branding has to do with every touchpoint that the world outside has with your company.
“We have to trust and rely on the efforts of, in our case, 300,000-plus distributors who are representing our brand on a daily basis,” he says. “So that’s why we spend so much time focusing on brand and culture alignment.”
That focus eventually led to the company’s relationship with Disney, one of the most recognizable and loved brands in the world. In Stastny’s early days with the Scentsy, executives talked about the pinnacle of licensing from a brand perspective: a product licensing relationship with Disney. Today, Scentsy partners with Disney on limited collections that feature beloved characters like Belle and Cinderella as well as Marvel characters Black Panther and Groot.
“We had studied Disney quite a bit,” Stastny says. “We knew their demographic, and even understood that the psychographic of their customer base aligned extremely well with who we were, and who we aspired to be. And there were other aspects of the brand and of the cultures between the companies that we felt was a good fit.”
Company Culture
The gap between what people say about a direct selling organization and what is felt in the hearts of employees and consultants can be wide. That’s why company culture plays such an important role in managing the reputation of a company. The culture sets the tone that resonates inside the headquarters and out to the field—and beyond the walls into the public. If it is not aligned—that is, if not everyone acts in accordance with company values—it can breed negativity, yield distrust and suspicion, and provide fodder to critics. It’s critical that the C-suite and other leaders buy into the culture because what people see, people follow.
“We have a culture of compliance at Isagenix,” says Justin Powell, Chief Legal Officer & General Counsel, Isagenix. “Our leaders, both corporate and in the field, want to be compliant because we all want the company to succeed over the long term.”
With the advent of the internet, but particularly with the growth of social media, companies from all industries must understand that they cannot, and do not unilaterally, control or even own their brand.”
—Mark Stastny, Chief Marketing Officer, Scentsy
One example of the way the industry has shifted is how it handles income claims and new product claims. The industry itself has done a good job of becoming more conservative and more transparent and more authentic. That is good for consumers. It resonates better with consumers, and it keeps Isagenix safer from a regulatory standpoint.
None of that would happen, Powell says, if it was just the legal team saying the company had to change or had to be more conservative or more transparent. “It has to come from the top down,” says Powell. “When people see the leadership behaving in an appropriate way, they buy in and do the same.”
Powell, who oversees nine departments all related to protecting the company’s reputation in some way—legal, compliance, regulatory, government relations, public relations, human resources, facilities, security, and the ISA Foundation—says everything the company does reflects back to compliance. “We are even seeing more of a push from the top leaders that want to get away from income claims altogether because they bring on more risks, more costs then benefit,” he says. “I think you’ll see over time claims becoming less frequent and less extravagant across the entire industry.”
Creating a culture that strengthens the company brand is all about preferences, says Jason Groves, Executive Vice President, General Counsel, and Corporate Secretary for Medifast, the global company behind one of the fastest-growing health and wellness communities, OPTAVIA. The direct selling model offers many different variations of how to do business. Medifast’s model provides very little negative space for its people to play in and operates in a way that avoids the biggest tension places that regulators tend to hack. Its model looks different from other direct selling companies because it did not start in the direct selling channel. It evolved from a multi-channel approach, beginning in doctors’ offices and then moving on to franchises and weight loss centers before finally landing in direct selling.
“We’ve looked at many business models, inside and outside the industry,” Groves says. “We built a platform and name—built a reputation—and then worked on modifying and creating a model. We eliminated all the other models, and we are now OPTAVIA. That is the benefit of all the other models we have tried. Direct sellers should love us because we have established that the direct selling model is fantastic. We tried other models and we ended up here.”
While Medifast’s journey shows that the direct selling model works, Groves acknowledges there is room for improvement, and that includes addressing the issues that detractors hang their criticism on. He believes all direct selling companies have a duty and obligation to help protect the channel but does acknowledge there is an inherent challenge with that.
“My colleagues whose businesses started years ago, well before mine, have a model for which the government is constantly modifying its concerns,” explains Groves. “They must keep up with the concerns, and continually adapt the model, or continue to run their model and avoid the concerns. We had the benefit of entering the direct selling industry later and was therefore able to build a culture that eliminates weaknesses and emphasizes the effective aspects of the direct selling model.”
Government modifications and regulatory oversight are not the only challenges related to building brand reputation. In this age of technology and social media, companies are learning they cannot control, or own, their brands as they might once have done. Therefore, it is even more critical that the company culture is equally understood and felt and experienced by consultants—and, as importantly, that their goals align with those of the company.
“With the advent of the internet, but particularly with the growth of social media, companies from all industries must understand that they cannot, and do not unilaterally, control or even own their brand,” says Stastny. “Regardless of what your marketing messages are, if they do not align with what people are experiencing or saying about your brand online and in conversations with their friends, a company in today’s world will not be able to yell loud enough through traditional communications channels to reshape the sentiment of what the company wants it to be.”
At Scentsy, Stastny describes this as the “democratization of the brand.” The company co-owns the brand alongside its consultants, their customers, and Scentsy employees. They look at the brand as more of shared asset of the “brand community” in which they are all participating. However this approach can be unsettling for marketing or C-suite executives who are used to a traditional “command and control” type of marketing or messaging.
“The only way this can work is through alignment on things like mission, values, culture, and brand attributes,” says Stastny. “The community attracts the right people who can advocate for the brand, and when members misrepresent the brand, the community—not just the company—helps correct and bring the behavior back into alignment.”
Stastny notes that when you can get hundreds of thousands of consultants and customers aligned on amplifying a message or advocating for the brand, it can be a very powerful thing. If companies can teach the field how to tell their stories appropriately and authentically, the narrative needle would swing over the positive side for direct selling.
“This industry has powerful stories about real people who have found a connection to direct selling and are using it in ways to benefit their lives.” Stastny says. “These stories have nothing to do with extravagant lifestyles or wealth; they are stories about supplemental income, a love of the product, connection to a community, and improved self-confidence by doing something they didn’t think they could do. These are the stories that need to be told.”
What are best practices for consultants to do a better job of advocating for the company and the industry? Sheryl Adkins-Green, Chief Marketing Officer, Mary Kay Inc, says integrity is a fundamental expectation and requirement of any and all businesses. It is critical, therefore, that companies consistently reinforce that there is a shared responsibility to conduct business ethically and with integrity.
“My advice is to stick to the facts that most accurately represent the products and services—and to truthfully represent the time and effort that they invest in their business,” she says. “Reputations are built on trust and truth, not promises.”
Foundational Complaints
Negativity or criticism is frequently born in the gap between what is known about a company and what is not. For direct selling, the foundational complaints against companies have not substantially changed over the years. One complaint is that companies push products that are extremely overpriced for their value through a channel that is really interested in selling an opportunity to join their team—that the product sale serves as a façade to hide what is really being “sold”—an opportunity that will not live up to the promises made.
The other major compliant against direct selling companies is that they have complicated compensation and reward structures, presented in intentionally confusing language, to take advantage of people and get them to join.
For individual direct sellers, complaints are typically against rogue consultants who sway from established company rules. Complaints include:
- Earnings/Lifestyle Claims: Direct selling opportunities are often “sold” or “pitched” to prospects in ways that do not accurately reflect the actual experience, both in terms of the level of income that can be obtained or the lifestyle that can be experienced.
- Product Claims: Direct sellers make claims about their products that do not accurately represent what the product can do. Health, curative, or weight loss properties are examples.
- Prospecting: Direct sellers are aggressive when reaching out to family, friends, and social circles. This dynamic has intensified as social media channels have matured.
Are these issues that direct selling is actively working to change? According to Stastny, the answer is yes. “Earnings claims, lifestyle claims, and product claims have been a strong point of emphasis by DSA to its member companies for some time,” Stastny says. “Simplifying compensation structures and the language used to describe them have been more recent areas of focus and emphasis.”
DSA has implemented its own Code of Ethics and processes for industry self-regulation among companies that belong to the Association. Stastny notes that DSA has also worked with Better Business Bureau (BBB) National Programs in the United States to form the Direct Selling Self-Regulatory Council (DSSRC). “Consumers can register income, earnings, or product claims complaints against direct sellers or the companies they represent whether those companies are members of the DSA or not,” Stastny notes.
While the complaints against the industry have not changed, what has is the dynamic platform that now allows critics to organize and share the negativity—and this is, of course, social media. For direct selling companies, social media attacks can be challenging. Stastny says that defending against them will look different depending on what the nature and scope of the attack is and on which social media channel (or channels) it is occurring.
“Sometimes limiting, or turning off, comments is appropriate and necessary,” Stastny says, “while, in other instances, it is probably not a good idea. Sometimes deleting a post is necessary, although most of the time doing so will send the wrong message. Companies need to clearly think through their response plans in advance and know what their approach will be well before they are called upon to use them.”
Stastny stresses that a company in the middle of an attack or crisis should never develop its strategy in real time. A plan will minimize overreacting or reacting on emotion, which sometimes can be worse than not responding at all.
And what about not responding at all? Is it a good defense against social media attacks—to dam up the floodwaters and hope it all subsides? For Powell, it depends on the source and the credibility of what is being said. Sometimes responding to critics can backfire, creating more problems. You don’t want to add fuel to a fire where the fire is really not all that powerful.
“If the criticism is valid, then behaviors need to change and or corrections need to be made and communicated that they have been corrected,” he says. “As for the model generally, we all have a responsibility to handle the criticism, and to collaborate with DSA, DSSRC, and the Direct Selling Education Foundation (DSEF) to help the industry improve.”
What does a company do when it finds a consultant or representative is not following company protocol and instead adding fuel to the fire? Building and maintaining a great reputation takes time and effort, and one stance of rogue behavior can have quick and harmful effects. Most leaders agree that when social media rules are violated, swift and strict action by the company is necessary. But the best action a company can take is preemptory, teaching its salesforce what can and cannot be said across social media platforms.
“Mary Kay Inc. consistently provides education regarding how Mary Kay products and the Mary Kay business opportunity should be represented accurately,” says Adkins-Green. “We also provide ready-to-use content and copy that can save our Independent Beauty Consultants time, along with easy-to-follow guidelines for those who choose to create content related to their Mary Kay business.”
Building Reputational Capital
The biggest gap of all for the direct selling channel could possibly be between what is known and what is done. There is an awareness of inconsistencies delivered in the direct selling narrative. Those instances of misinformation, misrepresentation, and misunderstanding have hurt the channel and mobilized global efforts to turn back the tide of negativity. Only a collective effort on the part of all who partake in the direct selling business model can change what is being written.
Groves believes direct selling companies can work together to ensure the industry is presented in a positive way. “We are all tied together as an industry,” he says. “We are linked, so when one has a problem, other direct selling companies suffer for it. That’s a key distinction.”
Not all industries have that type of relatedness. For instance, if AT&T did something that affected consumers in a negative way, it would not necessarily affect Verizon or Sprint. The obligation Groves speaks of is for direct selling companies to operate the business correctly, ethically, and morally. The duty is to help find ways to turn the negative to positive.
“The direct selling industry is often seen as negative, and it starts with a negative presumption, which is, unfortunately, even worse,” says Groves. “There is a presumption of a problem. We have to rebut that presumption.”
However, there is a challenge to that. Many direct selling companies do not abide by a code of ethics, and that makes it substantially harder to present a positive image of the entire industry. What it does, however, is bring into clearer focus the bad actors.
“People are going to do unethical things; they are going to find a way to get around the rules,” Groves says. “Every time we come up with a new law, people are still trying to break the law. But because there isn’t this forced system, you can see the bad actors more easily because they do not have the pretense.”
When those bad actors make headlines that cause the channel to bear the brunt of criticism, ethical companies are forced into a reputation balancing act, defending their companies during full-out industry attacks.
For Stastny, managing that reputation balance may sound oversimplistic. Scentsy has developed its mission and values, and the products and opportunities that flow from them, in ways they genuinely feel will add value to their consultants, customers, and the direct selling industry.
“We focus on amplifying those messages in many ways and through many channels,” Stastny says. “We recognize that we are members of a broader industry community and that our actions, behaviors, and choices represent not only Scentsy, but the industry. If we shine a positive light on the industry, striking a balance between ‘Scentsy reputation’ and ‘industry reputation’ is not difficult because they are aligned and complementary.”
Yet, Stastny believes it is healthy for companies to realize that some of the negative sentiment about the channel is there for a reason—that it is at least somewhat deserved. Doing so will help avoid a victim mindset and put a company in a frame of mind where they are looking to improve things they can influence or control.
“I’d encourage companies to work directly and openly with field organizations to help them understand why things like inflated lifestyle or earnings claims and product claims can be damaging to them, to the company, and to the industry,” Stastny says. “Teach them proper social etiquette in all the selling motions, but particularly in online communities and within the social media sphere. And lastly, look for and capitalize on ways to get positive stories about the industry out there to counter the negative stories and sentiments that exists.”
Mary Kay Ash founded her beauty company nearly sixty years ago with three goals: develop rewarding opportunities for women, offer irresistible products, and make the world a better place. The company’s messaging strategies are aligned to support those three goals.
“When direct selling companies highlight the positive difference that their organization is making in local communities and beyond, these messages collectively and credibly illustrate the merits of the channel,” say Adkins-Green, who believes the best approach to modernizing the image of direct selling is to focus on the quality of the products, service, and advice that a representative can provide. “Direct selling is about people connecting and establishing trusted relationships,” she says.
Droog believes there are a few things companies can do to advance and protect their own reputations while doing the same for the industry. The first is to focus on teaching the field to align to overall company messaging, which, in Amway’s case, is fed by research and evidence from the company’s own data as well as industry data.
“Many times, negativity comes from a direct experience a critic has had with just one sales representative,” says Droog. “That representative may have been too aggressive or stretched the truth about speed-to-income, or not listened to the prospective customer about their true need and instead jumped into selling what they know best. Putting the focus on company messaging will minimize such incidents.”
It’s critical to remember, Droog says, that every action a company takes adds up, either improving or harming the business reputation. Amway takes great care to teach its representatives how to answer tough questions, including the industry criticisms they often hear. When the responses are clear, concise, and, most importantly, consistent, those who are open to listening, will.
“Small acts of transparency, truth, understandable language, and simplification will add up to improve the industry’s overall reputation,” she says.