Why "Technology" becomes the biggest variable in Direct Sales in 2023

You know how BMW owners will never buy a Mercedes and vice versa?

Dec 5, 2023
Alex Pshenianykov
Alex Pshenianykov
Why "Technology" becomes the biggest variable in Direct Sales in 2023

You know how BMW owners will never buy a Mercedes and vice versa? Well, when I needed to buy Creatine this morning, I went on Amazon. Out of the crazy variety of brands, I eyed 2 that I recognized. Onnit was one of them and it was supposed to be the most expected choice for me, since I have tried many of their products already. But I didn't want to take creatine twice a day as Onnit suggested. I wanted a one-shot powdered solution. And Thorne had one. So I went with it. Even though I've never tried Thorne. And it was an easy decision, I felt no loyal obligations to Onnit. Choice gives buyers freedom and makes seller's position weaker in a saturated market.

80% of Direct Sales lies in the Health & Wellness area. So competition is fierce and loyalty is the currency of this industry by design. But do Ambassadors need to stay loyal to their companies or do companies need to show loyalty as well? I believe we've stepped into a new territory where the latter is more and more true. And this change is being driven by how users interact with Technology.

Why do reps stay with one company when the company has almost no leverage? Just think about this:

  1. Without reps there is no growth
  2. Reps build their networks on their own
  3. Reps control their growth

So the only thing a modern Direct Sales company does is it supplies product. But is that enough?

What if your top IBO decides it's time to move her community to a different supplier tomorrow? It actually happens much more often than you think. Remember the story of WorldVentures and their "golden boy" Sashin Govender?

He was a very young "hungry" rep (unline top leaders at the time), who used Instagram to propel his personal brand to the sky, crushed all financial reports, dwarfted all the old-school leaders' earnings, and left the company with his downline.

I'm blown away when we, at Techery, are talking to another prospective company and their Tech leadership considers "waiting", "taking care of legacy first", "exploring Exigo web solution" in 2023. I can't overstate the importance of not waiting another year to start implementing new technology in today's Direct Sales.

The thing is, Direct Sales companies are not just competing with other Direct Sales companies, but rather with social technology platforms like Facebook, Instagram, and TikTok. Those platforms own the community you call Ambassadors, representatives and preffered customers. You have zero visibility into the inner processes of communication, sales and growth. They do.

Let's take a look at three examples of companies that were slow to adapt their technology and ultimately lost out to their competitors:

  1. Kodak and Fujifilm: In the 1990s, Kodak was the dominant player in the photography industry. However, when digital photography emerged, Kodak dismissed it as a fad and failed to invest in it. Meanwhile, Fujifilm invested heavily in digital technology and eventually overtook Kodak's market share.

The lesson here is clear: don't dismiss new technology as a fad. Embrace it and invest in it before it's too late.

2. Blockbuster and Netflix: In the early 2000s, Blockbuster was the leader in video rentals. However, when Netflix entered the market with its DVD-by-mail service, Blockbuster initially dismissed it as a niche player. By the time Blockbuster realized the potential of streaming video, it was too late.

The lesson here is that it's important to be aware of new competitors in your industry and to take them seriously. Don't assume that your company is invincible.

3. Nokia and Apple: Nokia was the world's largest mobile phone manufacturer in the early 2000s. However, when Apple introduced the iPhone in 2007, Nokia initially underestimated its potential and continued to focus on its existing product line. As a result, Nokia's market share declined rapidly.

The lesson here is that it's important to be proactive in identifying and investing in new technology, even if it means disrupting your existing product line.

What could this mean for your company?

One possibility is that the influential representatives with solid loyal following may switch to a similar Direct Sales company with similar products, but better technology. Because they are ones who control their growth. And if your Direct Sales company gives them nothing, but product, Technology becomes the new dominant variable.

Investing in new technology doesn't have to be something out of this world. It could be as simple as going with a modern e-commerce web, Virtual Office with proactive flexible reports and a mobile-first experience solving real problems of real representatives out there in the field. For example, Techery is rolling out its Treel AI platform for MLM this year, and it's expected to cover most of these areas.

So I hope it's clear that it's crucial for Direct Sales companies to embrace new technology and invest in it before it's too late. Don't dismiss new competitors, be proactive in identifying and investing in new technology, and don't assume that your company is invincible just because you've been around forever and you have a loyal customer base.

It took me a second to ditch Onnit for Thorne. People prioritize themselves. Your reps are people.

More from Techery Blog

See All