For every low, there is going to be a high. It is a cycle or maybe we could call it the law of nature. From epidemics, calamities, and economic catastrophes, we have seen it all in the past few years. Each was more intense than the previous one leaving us stranded until we got back to our senses, picked ourselves up, and got going despite challenges and backlashes. This has been happening with every business across the world. Even when the whole world was locked in, some businesses saw steady growth whereas others vanished in no time.
Direct selling business has witnessed this wavering in terms of sales and revenue in the past few years. Numerous reasons left businesses dangling on the precipice. While all these hullabaloos were happening, the direct selling sector kept their focus straight on catering efficiently to customers covering all business touchpoints, but at the same time being considerate about their business brethren who thrived day in and out to help the business grow.
Paradigm business shifts
From businesses striving to grip back to lives to failing miserably in the competition rat races, we have seen it all. With rising demands for innovative products, changing generational perspectives, varying market trends and individuals seeking for newness, we see how the market gets bombarded with new products each day and how customers are spoilt for choices. That said, it is imperative to analyze how drastically businesses have undergone change. From breaking the legacy business model and replacing them with contemporary strategies to cope with changing business scenario to discarding the profit and loss charts to focus on enhancing customer experiences, the change has been immaculate.
Direct selling businesses have set the bar high in terms of every aspect of the business. Enabling distributor performances through efficient distributor training and effective distributor engagement which boosts their confidence and improve their overall performances is a great example that portrays how direct selling business boosts growth leveraging the maximum out of resources involved in the business.
How to encourage resources to stay involved in business?
Inclusivity, to create equal environment, policies and systems for every individual at work.
Unanimity at workplace, where opinions, suggestions, criticisms and healthy competition occur.
Sustainability, to reduce negative impact on society, economy and environment etc are a few of the key shifts that the direct selling sector witnessed in the past few years.
And the end result has helped the industry improve its integrity, legitimacy and credibility for being socially conscious, for being considerate of its employees, distributors and customers alike. The industry has thus improved its profitability and expanded across boundaries and regions.
The direct selling future
We are already in the last quarter of the financial year and the year 2024 is on focus for most direct selling businesses. That said, Direct Selling News, from its recent research say that the industry is in one of the most important inflection points in its entire 100+ years history.
At Epixel, we circumspect changes and equip ourselves efficiently to cope with them. This recent insight on the industry got us curious and decided to further dig in what exactly is inflection point, how would it impact the industry and what would the future look like.
So, what is an inflection point? Mathematically speaking, it is the point of a curve where the change in direction of the curvature takes place. From a business point of view, it is a turning point, or the time when significant changes in a situation occur.
With looming recession and economic uncertainty, what was a smooth flow of business post pandemic has come to a standstill. The graph would now go up or down is a serious question to ponder upon but what best businesses can do is to be prepared to either accept changes and take the graph high or, ignore the changes and strive not to let the graphs go down.
However, the very fact that only 18 companies have made it to the DSN’s 2023 list of companies that experienced growth in revenue for three continuous years is indeed a thing to be worried about. Or rather, the figure clearly depicts that the direct selling industry is in turmoil trying to swim towards exponential growth rather than falling towards a catastrophic decline. The profit and loss (P&L) charts of some of the top-tier direct selling companies in the world started showing a clear decline in their overall sales as early as the end of 2022. Brands that identified this change, imbibed it, took a pause, and reset their strategies started fetching better results. Whereas brands that failed to realize the decline are on the verge of decline with minimal opportunities to bounce back.
But why ‘inflection’ suddenly?
If only inflation and stagflation weren’t enough, where did this inflection suddenly came from, this was the first thought that came to my mind when I heard of this phenomenon. Well, the reason could be different according to industries and markets. To put it in simple words, imagine your child is doing well in school because she or he has a very supportive teacher who knows your child’s pulse and capabilities. One fine morning the teacher moves out of the school, or you are shifting to a new town. The child will find it difficult to learn without the proper support that they have been used to for quite some time. This could result in your child’s overall performance for sure. However, it is up to you to help the child cope with the change or let him or her take their own time until they get back up or completely give up.
In the same way, in the direct selling scenario, the inflection point has aroused due to
The varying regulatory environment, where lack of efficient compliance management or an automated compliance system could disrupt the smooth functioning of a business.
Changing customer preferences, not being able to forecast changes in trends and identify the pulse and choices of your customers.
Dead heat competition, where there are a million products in the same category by various brands unable to find the right market and sell them efficiently.
Disruptive technology gaining traction is harnessing growth of companies thus taking a toll on their brand credibility.
How to get past the inflection point?
A strategic inflection point is something that changes everything about your business including the way you think and act. That said, how do we face inflection or how should businesses make strategic inflection point work in favour?
This begins with altering individual mindsets because you are about to witness change, a transformation which needs step-out courage from mentors and leaders to converse with their team honestly regarding how to face the situation. The organization shall thus experience change from the grassroots level eventually witnessing the result be its good or bad.
To navigate through this point of uncertainty or inflection, it is advisable for direct selling businesses to incorporate a combination of strategic thinking, adaptability and decisive action.
How to get past the inflection point?
- Identify that you are at the tip of the curve — Realize that you are at a critical juncture and you gotta act immediately like learning the market dynamics and equip yourself to reset the business landscape.
- Make the best use of data — We have stressed on the relevance of data enough, but data has crucial importance here to identify the nature and implications of the inflection point. It could also help analyze where the market is heading, competitor behavior and customer feedback to track the change.
- Rework on your strategy — What worked until yesterday may not work today. Your best strategy may no longer be the best in this phase and hence, it is important to reevaluate the strategic objectives, competitive positioning, and long-term goals.
- Foster agility — Train your team to respond quickly to changes. Encourage them to be adaptable and be open to changes. Build cross-functional teams to stay ahead of competitions and utilize opportunities with enthusiasm and efficiency.
- Steer clear of compliance scrutiny —The direct selling regulatory environment is tough. Understand why it is crucial to stay compliant to changing regulations and amendments because your brand integrity and legitimacy lies there. Stay clean, clear and transparent with your commission calculations, incentives and compensation plans.
- Learn the curve — Track where you are with your business and how effective are your changed strategies and initiatives. Make use of the direct sales KPIs (Key Performance Indicators) to monitor progress and reinforce your strategies accordingly.
- Maintain resilience — It is always easy to give up. But make it a habit to fight back come what may. The inflection point shall sure be challenging and involve many setbacks. But that shouldn’t let you stop dreaming of your business or your career. Focus on your long-term goals and stay resilient with utmost perseverance and commitment to your business.
- Know that it isn’t over — Because you faced inflection today doesn’t mean that you will have to face one more in the following year too. It is not a one-time thing but could occur multiple times in an evolving business landscape. Anticipate future inflection points by keeping an eye on the market to always stay ahead of the curve.
As the famous Japanese saying goes, ‘if you feel like you’re losing everything, remember, trees lose their leaves every year, yet they still stand tall and wait for better days to come’. As philosophical as it may sound, it has major significance at this instance in the direct selling business because there could be many adversities in business that might create both positive and negative impacts. But let that not wither your confidence, rather, stand tall with confidence and determination to strive and succeed.