I feel like I’m watching the great California Gold Rush of 1849! Only instead of trying to find gold in the rivers and mountains, people are prospecting from their desks on the Internet. As websites like Twitter and Facebook rapidly grow, people in the MLM industry are rushing to stake their claim to capitalize on the social media revolution.
The question is, “How can Direct Sales companies take advantage of the popularity of these sites to build their business?” Direct Sales has always been built on relationships and these sites are set up to create and cultivate relationships. It seems like the perfect fit, doesn’t it?
The up and coming generation of today (anyone under 30) defines “friendships” very differently than us old people do. When I was growing up (in the days before the Internet), I had a handful of friends–maybe four or five people–that I hung out with. My children all have several hundred “friends” on Facebook–people they can see pictures of, whose relationship statuses they can check, and whose Facebook walls they can make quick comments on. But, they don’t see these people on a regular basis, and in some cases, they have never even met them. With this dramatic shift in the definition of friendships, can an industry that is built on close relationships prosper?
Almost everyone agrees that Direct Selling is founded on the principle of personal relationships or friendship. That means if I try to sell a product to my friend, my friend would base his decision to purchase at least partly on the credibility I have with him/her. In other words, I can use the credibility I have built with my friend to endorse a product I believe in. This is a bedrock principle of Direct Sales. There is no evidence that you can bypass the person-to-person aspect of this industry and still be successful over the long term.
Companies have tried to integrate systems, like purchasing leads, that go around the person-to-person aspect and have had little luck with them. In fact, all of my clients (network marketing companies) who have adopted such programs have phased them out over time because they were not successful.
This leads to the question in the era of social media networking, “Is Direct Selling’s reliance on relationships going to disappear?” No, I don’t think so.
I do think that any company trying to use social media as a force to build its business has to know the answer to at least two major questions:
- Do the relationships created and/or maintained using social media have enough substance and credibility to support Direct Sales? Or, to put it more directly, will one of your Facebook friends buy a product because they trust your recommendation, even though you do not see that person face to face?
- Is it socially acceptable to use these social media sites to sell a product? And, if it is, under what circumstances? Even in traditional person-to-person marketing, there are times where it is inappropriate to sell. For instance, what if when an old friend dies and all your friends and family are together for the funeral, it may seem to some people like the perfect time to introduce your new business. But, taking advantage of this occasion to promote your business is a social faux pas. You may have plenty of friends who would be interested in your business but not at a funeral! I would imagine that if Direct Selling were to adapt to marketing over social network sites, the same basic social norms would apply.
How strong a relationship is can only be determined by putting it to the test, and that is what we are now doing. Although Distributors have started making sales to their Facebook “friends,” the strength of Social Media has largely been seen as relationship buidling, not as a capitalization on relationstionships. Over time, we will find out if these online friendships also lend themselves to selling. We’ll also find out under what conditions the social norms of these sites will allow these sales to be made.
And, that is going to be a tricky thing to figure out. It’s not like social norms are written down or voted on by some “Internet legislature.” They grow and develop with time. Because social networking sites are only a few years old, social norms are still evolving.
It will be interesting to see what social networking will grow into and how the Direct Selling businesses will handle these issues. I do believe, however, that the companies who master them will have truly hit the “mother load” in this Internet gold rush!
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