According to the Wall Street Journal, more startups are turning to a tried-and-tested business approach to sell to tweens and teens: the direct-sales model. Young sales reps—some are as young as 12—host parties to sell things like lip gloss, jewelry and accessories to friends and to friends of friends. Combined with e-commerce and social media, these startups are finding new customers and seeing high growth.
Pioneered by the likes of Tupperware, Mary Kay and Avon, direct-sales tactics have been around for decades, but teens are finally getting into the action thanks to new ventures targeting this market. In June, Willa Skincare pulled out of more than 300 stores in favor of selling directly through its teen and tween sellers. Jewelry company Origami Owl, which was started by a teenager, brought in $250 million last year. The young company has been relying on the direct sales model since 2011.
At a time when teen retailers are struggling to make a comeback, the success of these companies is impressive. While the direct-sales approach won’t work for all companies, its success in the teen market is something worth examining. Regardless of your target market, this phenomenon offers the following insight about your customers today:
1. Customers like to talk about their favorite products
Teens who sell to other teens are often motivated not just by the potential income but also by their belief in the product. Willa Skincare sellers are often customers first. These teens succeed because selling feels like they’re just telling a friend about an awesome product.
Customers today—paid or not—don’t shy away from telling others about great experiences and awesome purchases. Whether online or in person, customers like to express themselves.
If your company relies on direct sales, it makes sense to engage sellers in an online community where they can share feedback about your products and provide selling tips with each other. But there’s a bigger lesson here for all companies: We have to make it easy for influential customers to talk about us and to talk to us. Because our customers can broadcast more freely now, we have to engage them in two-way conversations and deliver on what we promise. Let’s be open to what customers have to say.
2. Customers want to be rewarded for their influence
This phenomenon of teens turning into sales representatives is revolutionary. Until recently, the time that teens spent creating content online and tending to their social networks was time that they were giving away. They were doing all the work while social networks got all the money by selling their “eyeballs” to advertisers. These teens have turned the tables, putting those sites to good business use, as a means of doing direct selling.
Selling is not just a way of for teens to monetize their social networks; it’s also a way to finally make money from their popularity. In generations past, the “cool kids” didn’t get any money for having lots of friends or being influential tastemakers and trendsetters. In fact, it probably cost more to be a cool kid because that required buying nice clothes and accessories.
Just like many customers, teens want to be influential, and they want to get something out of it. Think about engaging your best customers regularly and consider co-creating new product and services with them. Delight influential customers by regularly giving them free products, inviting them to exclusive events, and giving them sneak peeks of what you’re working on. Make it worthwhile for them to be an influencer.
3. Customers want to be treated as partners
Unlike a typical employee, teens who sell to their peers have more control in terms of how they sell, how much time they put in, and to whom they sell. Not only that: they often get free products from the company. Essentially, these entrepreneurial teens are collaborators and partners of the company.
There’s a lesson here that many companies can learn: just like these teens, customers today crave partnerships with brands. The days of customers being passive consumers are long gone.
The direct-sales model doesn’t make sense for all companies. Established companies, in particular, may not be able to take advantage of this approach if they have already forged partnerships with big retailers. However, through regular customer engagement, there are opportunities to treat customers better and make them partners in your business.
The rise of peer-to-peer selling among teens is a sign of difficult economic times, but it also demonstrates how tapping into the power of the empowered customer can build relationships and result to bigger revenues. To succeed today, you don’t necessarily need a group of teen girls selling your products directly. You do, however, need to figure out how to make your customers happy and turn them into passionate partners who talk about you in a positive light.