06 Oct 2016

What’s Your Competitive Advantage?

by Paul Adams

“If you don’t have a competitive advantage, don’t compete.”

—Jack Welch

Some products are run-away hits in the direct selling arena. Others may start out with a bang and end up with a whimper. So what are the keys to product success in this channel?

I had a question / response posted to a blog several months ago that made me think.

The multi-part question centered on the idea that, no matter how loudly the leadership screams it, no products “sell themselves,” and it’s crucial to understand that direct selling companies often compete against supermarket chains and mass retailers. There was a sense of despair in the question. As in “how can I compete” with all those other factors making it so difficult?

First, let me make my position completely clear:

Direct selling is not easy.

I’ve never seen a product sell itself.

Products sold via direct selling need to be special and unique.

The products that WIN in direct selling, generally speaking, require someone to demonstrate or share stories and experiences about those products, so that prospects (family and friends) see and understand the real benefits that the products deliver.

I simply don’t get that at my local mass retailer. I am driven to mass retailers to purchase stuff I want in a convenient manner. It’s on the way home.

In some cases, I choose the product based on an advertisement I saw. Mostly, I get to “guess” which product to try because nobody has told me their real experience with it. I read all the labels as if I have the secret decoder ring to make it all make sense. Sometimes I guess right. Sometimes I don’t. Frustrating.

Worse yet, I may go look at websites to read reviews of products from people I don’t know. Sounds desperate, almost, when you think about it.

Direct selling is unique—in theory, someone I trust, who has had an experience with a product, tells me about it. Based on that endorsement, if the price is something I am willing to pay, I try it.

If I like it, I may continue to purchase it.

And, if I REALLY like it and want to tell others about it, I may sign up as a distributor and tell my friends.

And so it begins…

Notice a key piece here.

The product has to satisfy a need / desire I have at a price I’m willing to pay.

My soapbox: If a product sells at 2x-3x-4x what I would pay at a mass retailer, it dang sure better deliver on that value proposition. Or, Houston, we have a problem. The cycle of “I got scammed” reviews begins again. And none of us need that.

You would be amazed at how many products we hear about that are going to “change the face of direct selling.” But in reality, nobody wants it. Or they are already getting it somewhere else (mass retailer or online marketplace), at a price they are happy with. There is no real value proposition.

It’s very true that people don’t always want to buy what we sell. But you don’t need everyone to love the product. You need enough to.

Direct Sales is NOT for everyone.

It is NOT a great way to distribute many types of products or services. (I’m going to hear from someone on that comment, for sure.)

But if your product delivers real value, satisfies a need / desire and has a uniqueness that would benefit by someone sharing real experiences / real stories, it may be right for you.

If your product meets those basic criteria, then, and only then, are we ready to talk about making it a business opportunity.

  • Richard Bliss Brooke

    Great rant Paul. Our profession has a history of hyping up mediocre products…products you could buy lots of other places and or products for which the story told is just not true. Ergo the public, the media and the regulators do not trust us. And because our model relies totally on Trust it makes Direct Sales a little harder. Here is what I tell people to do in their vetting process: 1. Ask yourself for an honest answer…would you,did you, will you buy this product repeatedly as a customer…a customer that has nothing to do with the MLM compensation plan? 2. What is the ratio of actual Customers outside the compensation plan to active distributors? If it is not at least 1 to 1 either the company has no commitment to customer acquisition or the product is bogus. I love how the tide is changing legally. The fear of the FTC will run off mediocre products and the hyper ambitious company owners.

    • Paul Adams

      Thanks Richard for the reply. Your teachings and outlook on this are spot on. The tide IS changing and there will be a lot of winners because of it.

  • Jason Brady

    Great post, Paul.

    A friend who was briefly involved in direct selling rhetorically asked, “Why would anyone buy from me instead of the grocery store – which is cheaper and more convenient, and the products are just as good? What could I bring (to the sale of dish soap, vitamins or shoe polish) that is worth the inconvenience of having to contact me and wait for me to deliver?”

    There obviously must be a powerful and compelling reason to purchase a service or product from a direct seller instead of conveniently picking it up while shopping for everything else. Bottom line, two important points:

    1) To get people to change their buying habits and buy from us, our industry must prove that it offers unique, competitive value that retail stores and online sites either cannot provide or cannot provide very well.

    2) We must also be clear about the type of customer that we are best designed to serve – they are a special and unique group (we know that not everyone is our customer and not everyone wants to buy what we have to sell).

    Rather than repeat the content here, I explore these two points in depth in my blog posts “Why Would Anyone Buy What We Have to Sell?” and “Why Direct Sales is Relevant and Valuable in Today’s World.” and encourage you to take a look.

    http://simplesolutionsproject.blogspot.com/2015/08/why-would-anyone-buy-what-we-have-to.html
    http://simplesolutionsproject.blogspot.com/2016/02/why-direct-sales-is-relevant.html

    What do you think?

    • Paul Adams

      Jason,
      Thanks for your comment and post. You have definitely identified many of the obstacles and opportunities for the channel. In the end, it’s about serving people with good quality products and good service at a price they are willing to pay. The money (business) is possible and sustainable if we focus on the basic core value we provide first. Thanks for sharing.