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What do age differences, ethnicity and even cultural practices have to do with your business? Everything, but only if you want to secure a thriving future.
The Latino, African-American and Asian populations are responsible for more than 90 percent of the population growth in the United States, with annual buying power of almost $4 trillion—more than the combined economic buying power of Brazil, Russia and India—according to Miriam Muléy, CEO of marketing consultancy and research company The 85% Niche LLC. Since almost three-fourths of direct sellers are white non-Hispanics, those statistics translate into the word that this industry loves the most: opportunity.
The Latino, African-American and Asian populations are responsible for more than 90 percent of the population growth in the United States, with annual buying power of almost $4 trillion.
To racial diversity, add age diversity. Since 2000, the average age of direct sellers has slowly been skewing younger, according to statistics from the U.S. Direct Selling Association. But in the last couple of years most companies report that more millennials are becoming direct sellers. They’re driven by crushing student-loan debt combined with poor job prospects. The industry has responded by providing them with everything from products to mobile apps, all designed to create an irresistible opportunity for young people—one that the traditional direct selling population is learning to love, too.
Put it all together, and you can almost envision that door to the future opening wide. The companies who spoke with Direct Selling News about how they address diversity in their salesforces offered insights and ideas on attracting and retaining this new sales field, all while integrating them with the women and men who have already made those companies successful.
Three of the companies have unique salesforces within the industry, with muscular ethnic representation that started unintentionally and then grew organically.
Princess House, which celebrates its 50th anniversary this year, has a consultant PHamily, as they call it, which is more than 75 percent Hispanic. Twelve-year-old 5LINX doesn’t track the ethnicity of its distributors, but a quick glance at the company’s website reveals that all of its Platinum Senior Vice Presidents are people of color, primarily African-Americans, and 5LINX has launched a focused effort in the Hispanic community. Belcorp USA’s field is 60 percent Hispanic—mostly women who take pride in the company’s Peruvian roots. And while PartyLite’s salesforce had a more traditional industry profile for most of its life, its vigorous support of younger recruits is changing the face of the company.
All those companies look at every facet of their business through the lens of the diversity of their salespeople. Whether it’s products, communications, events, training or any of the other elements of creating a successful salesforce, diversity is a consideration. And not just today’s diversity, but the composition of tomorrow’s salesforce, as well.
Come for the Products
Princess House says that its strength lies in its diversity, and the company goes to great lengths to ensure that it embraces diversity in all its forms. President and CEO Connie Tang notes that the company’s strategic decisions typically take consultants’ ages, cultures, backgrounds and language preferences into consideration. For example, when the company recently launched new dinner service products, it considered the needs of several audiences.
“We made sure the collection had standard white table settings, but we accessorized with tapas-style plates that are more colorful to target a younger audience and maybe single, apartment dwellers,” Tang explains. “Though tapas is Hispanic in origin, it’s becoming very popular. They all stack on the footprint of the platter, which makes them space saving. So we’ve created something that appeals to a younger age group, as well as an ethnic population. And the smaller plates might also appeal to someone a little older or who is watching her weight, because they help with portion control. So depending on who we’re talking to, we can adjust our message. From a merchandising point of view, we also show the plates with a variety of foods depending on the target audience.”
Products were the key element that attracted 5LINX’s ethnic salesforce. One of its initial product offerings was a Voice over IP Video Phone.
“We were blessed because the people who originally saw the opportunity and took it seriously happened to be people of color or from other parts of the world.”
—William Faucette Jr., Vice President of North American Sales, 5LINX
“We didn’t set out to create an overwhelmingly ethnic salesforce. We just wanted to create a successful one,” says Vice President of North American Sales William Faucette Jr., who started his 5LINX career as a distributor. “We were blessed because the people who originally saw the opportunity and took it seriously happened to be people of color or from other parts of the world. They went to people they know, who are like them ethnically and otherwise.”
Thanks to the worldwide connections of its salesforce, 5LINX quickly began shipping video phones all over the world. And distributors began telling their friends—people like them—about the opportunity.
With its Latin heritage, cosmetics company Belcorp USA has a keen understanding that the “Hispanic” marketplace is actually composed of several different markets.
“We don’t approach it as one block,” explains General Manager Mona Ameli. “We approach by country of origin and by the generation. For example, a first-generation Mexican is very different from a third-generation Colombian. They’re both of Latin origin, but the different countries have different cultures and different approaches. And first generations—people who are the first in their families to immigrate to the United States—are quite different from later generations who were born in this country. First generations often don’t have bank accounts, and they are not as technologically advanced, so their use of computers and the Internet is more limited. They also are more strongly identified with their husbands. But the second generations that are born, raised and educated here are very independent and will make the same use of technology as anyone else raised in this country. First-generation consultants have a high degree of comfort with a company from their home country. They buy the products and resell them. Second and third generations have more leadership, and they grow the business.”
With its Latin heritage, cosmetics company Belcorp USA has a keen understanding that the “Hispanic” marketplace is actually composed of several different markets.
She notes that product preferences are pronounced. Mexicans choose a color palette that is vibrant and colorful. Peruvians and Colombians prefer more subdued colors. Even their fragrance selections are different. And because they continue to identify with and take pride in the cultures of their countries of origin, those preferences persist across generations.
Welcome to the Diversity Party!
As much as direct sellers hope to attract ethnic distributors, many of them have an even broader view of their diversity goals and the strategies they use to achieve them. PartyLite, for example, is seeing its traditional salesforce broaden to include Generation Y and, perhaps most surprisingly, men.
More than 68,000 PartyLite Consultants hold parties to show the company’s candles, candleholders, home fragrances, accents and food from its Two Sisters Gourmet division. The company has taken a traditional approach to its business since its beginning 40 years ago. But recently, it began to modify its methods.
“Six or seven years ago we had an epiphany about what diversity is and what we want our salesforce to be,” says Vice President of Sales for the U.S. Karen Conkey. “We thought about what we offer people—the opportunity to earn income, and not a specific kind of income. At one time our approach was that people should work this as a career and earn a six-figure income. But we learned to open our thinking and position ourselves as a business where people can earn $50 or $500,000, and that opportunity is open to everyone. That’s different than thinking that we want to attract more Hispanics or Asian-Americans.”
PartyLite also recognized that as its leadership got older, it needed to attract a younger group of consultants.
“It has always been our task to be in the 25–35 age group, and we recognized that they demand a very different working environment than a 55-year-old.”
—Michael Norris, President, PartyLite Americas
“For the survival of any company, it’s essential to reach out to a younger generation,” observes Michael Norris, President of PartyLite Americas. “It has always been our task to be in the 25–35 age group, and we recognized that they demand a very different working environment than a 55-year-old. They execute sales in a lot of different ways, not just in a sitting room. They’re the drivers of our future, so we knew we needed to invest in the right tools—social media and apps for smartphones and tablets that allow for ease of doing business and provide training.”
Their overriding strategy: Be welcoming. As simple as that sounds, the strategy extends far beyond smiles and snacks to include all online activity.
“Over the last seven years, we’ve really embraced our online business,” notes Tracie Graham, PartyLite’s VP of Sales & Administration in Canada. “When we started attracting a group of savvy online users, we knew we needed to provide options for how both customers and consultants want to do business. We’re embracing the next generation of not just party plan but direct selling men and women. Ultimately, what’s exciting about PartyLite is they don’t have to pick or choose. If you want to have a party, great. But if you want to do business online, you can do that, too.”
Even the company’s language changed. They realized that “opportunity meeting” and “income opportunity” were alien words to Generation Y, so they changed their marketing jargon, tailoring it to their audience. Catalogs and online materials are now heavy on images and light on text. Customer service includes a “chat” function that is widely used by younger consultants, and communication options include Gen Y-friendly text alerts.
The strategy is paying off. In the United States, some 25 percent of its business is from people who only do an online business, and on a recent incentive trip, 40 percent of the people enjoying the rewards of their hard work were under 35 years old.
It’s still important, however, to recognize the significant portion of consultants who might prefer the traditional or “offline” approaches. For example, on the other end of the age spectrum, PartyLite is noticing more post-retirement consultants. They come for several reasons. They don’t have the income they need to live the lifestyle they want, or they’re simply not ready to settle into full retirement. Their PartyLite business gives them lifestyle flexibility, and it keeps them social.
PartyLite provides those retirees, as well as longtime consultants, with the traditional tools they need, but they also introduce them to newer ways to build their business. They’ve found that seasoned consultants and leaders have begun to embrace online opportunities as a key part of their businesses.
“I’ve been pleasantly surprised by conversations with seasoned leaders and Regional Vice Presidents about how they’re using the online space in their business,” notes Joan Connor, Vice President of eCommerce & Marketing. “The PartyLite Preferred loyalty program also has been beneficial to them. It lets hosts, guests, online shoppers or anyone who purchases at a party join the program and earn rewards on their first purchase. They can redeem the rewards exclusively online for a full-price product.”
PartyLite’s opportunity is also becoming gender-neutral. The people who invite friends into their home have universally become “hosts.” In fact, Norris noted that he recently attended a gathering of leaders in Quebec where seven of the 20 attendees were men.
Products reflect that male influence, with more masculine fragrances, diffusers and candleholders. Women buy them for the men in their lives, and men buy them for themselves. Connor says that she helped her college-age son decorate his new apartment with the most masculine candle warmer and fragrance she could find. Soon he asked for more.
Overall, PartyLite’s primary approach to diversity is to support its emerging populations, rather than to actively target a particular group. Service and their welcoming strategy cross all boundaries.
“Once you start attracting a certain type of person, they’ll attract their circle,” Connor observes. “As a company, when we start to see that trend, we support it. We acknowledge them and make sure we’re sensitive in responding to their needs.”
Taking the Next Step
When product passion transforms into entrepreneurship, even more thoughtful tailoring begins. Take recruiting, for example. 5LINX began a concerted effort to expand its Hispanic marketplace by aggressively helping its current Hispanic leadership advance to the next level. They’re targeting their efforts in the heavily Hispanic communities of Miami. They learned that while Spanish was essential, they also had to learn to speak the language of flexibility.
“It’s about leadership and who in your leadership is having success,” says Executive Vice President of Marketing Jeb Tyler. “We really focused on supporting their success by gearing marketing materials to that group’s needs. And we hired three individuals whose backgrounds reflect those of our Hispanic representatives to support that market.”
They developed a Hispanic logo, a Spanish-language company website and Facebook page, a DVD, a marketing magazine, and webinars and weekly meetings in Spanish. They also established an advisory group composed of Hispanic leaders who have helped 5LINX modify materials and processes so that individuals can envision themselves as 5LINX independent marketing representatives, whether their country of origin is Mexico, Puerto Rico, Cuba or elsewhere. 5LINX runs Spanish-only regional meetings and business opportunity meetings, and the corporation sometimes subsidizes the cost of a booth at a trade show or an important meeting.
Special events in the emerging Hispanic communities are typically shorter, start later in the day and are highly social.
“Sometimes the corporation has to help them get their feet off the ground with marketing dollars or support for that market,” Tyler notes, “whether it’s a brochure they need or a product that they really see helping that market, like our credit-card processing product.”
Special events in the emerging Hispanic communities are still packed with all the same elements that 5LINX provides at their international events, but they have their own special flavor. They’re typically shorter, start later in the day and are highly social. And leaders who usually drive the events have had the chance to teach both Tyler and Faucette a little salsa dancing!
The efforts have paid off. Last year alone, 5LINX tripled its number of Spanish-speaking leaders.
Belcorp USA’s Ameli notes that training Hispanic consultants, as well as providing them support, is as social as the events they attend. And consultants—especially first-generation—don’t hesitate to voice their concerns when their social, familial cultures aren’t practiced.
“They know someone in customer care, and they have a relationship with them,” Ameli explains. “Phone calls begin with updates on the consultant’s children and families. They really appreciate that. Occasionally I’ll get a call about a new customer service agent from a leader, who says, ‘Mona, she’s too sales-y. She goes right to business. You need to train her.’ For them, being social is part of our culture and part of their culture. It’s not just about business.”
She notes that training is often face to face. Belcorp USA has hired a field development team whose backgrounds reflect those of their consultants to deliver training and support to Hispanic consultants across the country. The company’s commitment to diversity is getting attention too. In April the National Diversity Council recognized Ameli among the 2013 Most Powerful and Influential Women in the state of California, based on the professional success and empowerment of multicultural minorities in the United States.
The Language of Flexibility
Faucette has noticed cultural diversity that is geographic in nature. For example, he says that the building block of the 5LINX business is the private business reception in someone’s home, and hotel meetings typically offer a second look at the opportunity. For regulatory and professional-presentation purposes, the company mandates that certain information is presented. But flexibility is the name of the game when it comes to style.
“In some parts of the country, you won’t see a presenter in a suit,” he observes. “He or she will have teams in T-shirts and jeans. That may differ from area to area. The amount of audience participation also varies culturally. Meeting length varies both culturally and geographically, along with the music you may hear. Some meetings are more relaxed and more of a social gathering than others. We allow all those things. At the end of the day, the leader is driving his or her business and income. As long as nothing is a poor reflection on the company or the rest of the salesforce, we’re flexible. They’re not going to do anything that they haven’t found to work.”
Connie Tang, President and CEO of Princess House, believes that the Asian community is an untapped market in the United States, particularly Filipinos and Vietnamese, who she describes as “primed for entrepreneurship.”
Hotel opportunity meetings play an important role at Princess House too, and Tang says that the nice venues create credibility—a key factor for a first-generation immigrant population. The meeting doesn’t emulate a home party, but products are on display because they’re part of the Princess House story and credibility. Support tools show that prospects won’t be in business by themselves.
“Most important is making sure you have consultants speak, not people from the corporation,” she explains. “We bring in people from that community who have been with the company for a while. They explain how they started and where they are today. In-language is important, but language is not the only factor to consider. The pictures you show in your presentation and the leaders attending are extremely important. Make sure you know and understand who you’re targeting. If you understand the leader you’re partnering with, they’ll know who will show up.”
Tang believes that the Asian community is an untapped market in the United States, particularly Filipinos and Vietnamese, who she describes as “primed for entrepreneurship.” Still, she notes that the Asian community is a difficult target market, beginning with the hundreds of languages and dialects involved. Creating supporting literature and customer support in so many languages is an economic challenge. And a party-plan company faces some inherent difficulties because culturally most Asians don’t typically invite strangers to their homes.
But Tang and other direct selling executives agreed on one core principle: Diversity is essential for the future of their companies.
“Diversity is the norm,” Tang states flatly. “Look at the schools our kids go to. Look at the shopping malls. We’re a diverse society. If you’re not attuned to it, you’ll have limited growth.”
The Business Case for Diversity
When Miriam Muléy talks about diversity in business, she cuts straight to the bottom line.
“Diversity offers a tremendous upside for growth, especially as the traditional mainstream markets begin to decline in size and begin to age,” she says. “There are multiple ways to look at the benefit of diversity, and the first is ROI. There is a huge positive impact on profit margin, market share and increased sales revenue.”
Muléy, CEO of strategic marketing consultancy and research company The 85% Niche LLC, and former General Manager at Avon Products Inc., points to a study by sociologist Cedric Herring that was published in the American Sociological Review. Herring found that companies reporting the highest levels of racial diversity brought in nearly 15 times more sales revenue on average than those with the lowest levels of racial diversity. Gender diversity accounted for a difference of $599.1 million in average sales revenue. Organizations with the lowest rates of gender diversity had average sales revenues of $45.2 million, compared with averages of $644.3 million for businesses with the most gender diversity. Herring also found that racial diversity is a better predictor of sales revenue and customer numbers than company size, age, or the number of employees at any given work location.
Muléy explains that the concentration of ethnic populations varies tremendously from one region to another, so she suggests that company leaders think locally. Companies can support distributors in those heavily ethnic markets with training materials or even connections with grassroots organizations where they can build trust.
“If companies do not get their arms around diversity and the opportunity it presents for enhanced ROI and incremental sales to a vibrant segment of the consumer and distributor market, they are leaving money on the table,” she predicts. “Geographic areas where consumers are largely diverse are a huge opportunity for incremental business. Added to this is the fact that diverse consumer groups, especially Asians and African-American women, are better educated than ever. U.S.-born Hispanics are increasingly well educated also, providing an opportunity for direct sellers to reach a discriminating buyer and seller at the same time.
Growth is so fast in ethnic populations that Muléy refers to them as the “emerging majority.” And they often shatter the myths about their incomes and buying habits. For example, Muléy reports these traits:
- 4.2 million African-American, Hispanic and Asian households earn at least $100,000 annually.
- There are 1.3 million multicultural millionaires.
- The buying power of women of color is $1.5 trillion and will grow to $1.7 trillion by 2017.
- Apparel purchases by this emerging majority of women are 3.5 times more than by non-ethnic consumers, and personal-care purchases are three times more.
- A disproportionate amount of beauty products, as well as health and wellness products, are purchased by Latina, African-American and Asian consumers.
Muléy says, “This opportunity is too large for corporations to overlook or tiptoe into. A proactive, sustained commitment to growth is needed to compete and win with emerging majority consumers.”
“This opportunity is too large for corporations to overlook or tiptoe into. A proactive, sustained commitment to growth is needed to compete and win with emerging majority consumers.”
—Miriam Muléy, CEO, The 85% Niche LLC
Her advice for recruiting in ethnic communities: Look at every tool you use and ensure that it reflects the face of America. From websites to catalogs, and from opportunity presentations to parties, integrate the cultural considerations of the populations you want to attract. For example, when you invite family-oriented Hispanics to meetings or parties, don’t be surprised when they bring their children. And if necessary, have a translator. Food is always welcome at direct selling events, as it sets a tone of “family” and sharing among diverse groups. In addition, she notes that role modeling and mentorship are important to retention, including field leadership as well as staff and management teams.
“To the extent I can see myself reflected in the leadership of the organization,” Muléy says, “I will believe it’s possible for me to make it and even exceed that level of performance.”