Utah has become a direct selling powerhouse, with multi-level marketing companies that can be traced back to the early 1900s. The state has seen great success in selling everything from personal care items to travel packages to vitamins. So what’s its secret to success? According to the Direct Selling Association, nearly 75% of MLMs target women, and the majority of them sell things traditionally seen as products for women.
“I think that they really understood how people interact in terms of person-to-person,” observed Mark Miller, PhD, president of Kaiviti Consulting. “But if you’re a friend, particularly female in terms of the dynamics, recommended it to you and said, ‘hey, it kind of worked for me. I think it would work for you’, that resonated. And so when it was done on a face-to-face level, it was very, very effective. However, now the world’s changed and we tend to do it through media, not face-to-face.”
The practice of selling face-to-face has withstood the test of time—up until recently. Dr. Miller, who has worked for or with direct selling companies like Advocare and Bella Grace Global, says education on product benefits will be replaced by the number of 5-star reviews. He added that challenges for the direct selling industry really came to a head amid COVID combined with the rise of social media.
“You didn’t interact at the gym or the church [anymore],” he said. “We’re doing it online—Facebook, Instagram—and so the dynamics have really changed. Many of the manufacturing companies are having to look at a much broader landscape than just multi-level-marketing or direct sales.”
Now, many companies are doing away with their direct selling models and restructuring to an affiliate commission program through social media platforms like TikTok and Instagram. Miller says that in order to be successful, sellers must adapt to change, adding that influencers combined with the ease of e-commerce are at an advantage.
“For the companies that are involved in production or manufacturing, if they pivot their base of who are their clients...they’ll do just fine because the industry is not slowing down, just one segment is,” he added. “So if they can tap into that, they’re just fine. As it relates to the multi-level marketing companies, all of them are trying to do this transition to more of an influencer model and that’s really difficult.
“The bigger you are, the harder it is to change. It’s like the old adage about supertankers, you can’t turn around very easily, but if you’re smaller and a bit more nimble and you can see where the future is, you’ll be well-positioned.”
