Gig Economy - Can Direct Selling Survive?

Can Direct Selling Survive the Gig Economy?

The rise of “gig” apps presents a real threat to the direct selling model. Is it time to shift your message?

by Jonathan Gilliam, Momentum Factor


If you haven’t taken part in the “gig economy”, you will soon. Powered by the ubiquity of mobile and GPS, new apps are taking over the distribution of tasks and services we use every day. From ridesharing programs like Uber and Lyft, to errand matchmakers like Instacart and TaskRabbit, these innovative services are being massively adopted not only by consumers but also people seeking to supplement their income. As a result, markets for taxis, handyman services and many others are being upended.

Much like our direct selling model, the people working for these services are independent contractors and enjoy many of the same benefits. Be your own boss? Yes. Flexible hours? Check. Make supplemental income? Definitely.

Uber, for example, claims its drivers make an average of $25 an hour and in New York City can earn $90,000 a year. Through its mobile infrastructure, the app delivers extraordinary work flexibility and near instant pay. Drivers can choose their own hours, work as much (or as little) as they want, and easily pull in decent money. There’s no obligation and no investment; all they need is a good car and a smartphone.

While it is true direct selling offers supplemental income and flexibility, it could be argued that achieving them is actually easier with app-based gigs.

For example, an Uber driver knows she will get paid upon completion of a ride. Can a party plan consultant expect a guaranteed payment, with a comparable amount of work and time commitment as Uber? Can a new rep at a nutritional direct seller count on immediate income, no matter how hard they work?

The truth is, not really. We all know that building a strong direct selling business takes time and effort—and a belief in the promise of future rewards. Success depends very much on an individual’s drive and motivation to build a business over time.

A critical moment for direct selling.

The advent of app-based gigs is a serious matter for the direct selling economy. I would suggest it may be more of an existential threat to our business than the web, eCommerce or social media ever were. Technology is again making it easier for other models to encroach on our territory, and the industry must now think hard about how we differentiate.

So how do we compete with these easy, quick-cash part-time solutions? What makes us not only different, but better?

We start by understanding and leveraging our strengths and messaging them emphatically. Following are steps direct sellers can take to better compete with app-based gigs:

1. Communicate more than just income. 

Just like the old “sacrifice” messages (as in “sacrifice your time with your family so you can work on your future”) and “become a millionaire” messages are no longer viable; I now assert the “make supplemental income” message will soon be rendered inadequate. We just can’t compete with the apps on that basis alone. Almost anyone can go online right now, join Uber and within one week begin making a few hundred or even thousands of dollars a month. I am not aware of one direct selling company that can guarantee the same.

The good news? Direct selling offers so much more than just cash. Can Uber promise exciting trips? Not unless you consider taking people to the airport an adventure. Does Instacart deliver a sense of belonging? Yes, belonging to a grocery store aisle, every single day. B.o.r.i.n.g. 

The reality is, app-based gigs merely make drudge work easier to get.

Adventure, success, fulfillment, and connectedness are all core direct selling benefits that the apps can’t match. We provide so much more than supplemental income.  We make people feel important, support them in their business and personal growth, and in the process become friends with them.

If your company’s primary pitch is about making an extra few hundred dollars a month, it’s time to emphasize the more compelling aspects to your opportunity and showcase your offering in messages the apps cannot compete with.

2. Reduce barriers to entry.

 In my recent book Blastoff! Creating Growth in the Modern Direct Selling Company, I discussed the need for direct sellers to remove any barriers to enrollment. Whether reducing upfront expenses or smoothing the technology experience, we need to provide an online customer experience equal to or better than that of mainstream consumer businesses.

This is even more important in the gig economy. A $99 sign-up fee is $99 more than what Uber charges. If your company requires an upfront investment, it is at a clear disadvantage for those with little to invest. Consider revising sign up fees in your offering.

You should also make it exceptionally easy to sign up. Think “one-click”, or as close as you can get. If your sign-up process is onerous, with heaps of legalese and multiple waves of clicks, forms and paperwork, you may want to take a look at them as well.

One area the apps beat most direct sellers’ hands-down is technology. If your company’s systems are antiquated, frustrating and desktop-dependent, you will lose a good portion of the coming (and even current) generation of potential enrollees. Consider an upgrade—and go mobile.

3. Pay as fast as possible.

 The days of forcing reps to wait for a check in the mail are waning. With the availability of instant pay on paycards there is no reason companies should be sitting on earned commissions or waiting to pay the field. Send commissions soon after they are earned, directly to their card… just like the apps do. And remove charges for pay cards if possible; it’s unseemly to have your sales force pay to be paid.

4. Lay out pathways to success.

 We all know success is more than just making money. More time with family, life experiences, reaching new heights, recognition and achievement are all a part of success.  Direct selling offers personal and business success opportunities for everyday people, regardless of who they are or where they come from. Be sure you communicate clearly how an enrollee can succeed in your company and help them all along the way.

The “Gig” app downside.

 As important as the change in the part-time landscape is to our business, there are some real disadvantages to working gigs. 

For the most part, the jobs themselves are essentially grunt work. Driving for Uber is equivalent to driving a cab. After gas and tolls some Uber drivers complain they are making closer to minimum wage. Traffic is never a joy, and if you drive weekend nights, you may have people vomiting in your car. Not exactly an inspirational experience. 

There is zero career advancement or potential for a raise in the gig economy, and it lacks a sense of community that is a primary attraction in any quality direct selling business. App workers have little to no contact with their “colleagues” and the work can leave them feeling isolated.

Most of all, the apps provide little connection to something more, something bigger than money.

Passion: Our competitive edge.

So, can direct selling survive the apps? Absolutely, if we focus on our strengths and communicate our core values and benefits.

Direct selling is more than making money; it’s about joining a group of people who are passionate about what they do and want to improve their lives and the lives of others with truly compelling products, services and opportunities. We understand that the most important thing we do is connect with people, get an understanding of their hopes and dreams, and try to make those dreams come true. How many Uber drivers can say they are truly passionate about driving other people around?

No doubt the market is moving in a new, uncharted direction. We need to embrace new messages, innovate and leverage the power of social media to convey our benefits of connection, personal development, achievement and the other soft rewards, with which the gig economy cannot compete. 

Direct selling has always provided supplemental income opportunities to individuals, but we must acknowledge that a primary part of our promise is being challenged. The landscape for part-time work has changed, and the message of direct selling must change with it.

Samantha Saenz contributed to this article.

To learn more and discuss how Momentum Factor can help, contact Jonathan and the Momentum Factor team today by clicking here.

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