Comparisons of Salespeople in ML vs. SL Direct Selling Organizations Mia Yan Jake Raynard

Background of Study Purpose: Purpose: –Determine whether ML and SL salespeople differ on behavioral, motivational, or descriptive characteristics  Implications for managers and organizations

Sample & Data Collection Sample: 22 member companies of the Direct Selling Association in the UK Sample: 22 member companies of the Direct Selling Association in the UK Questionnaire - salespeople in 1 st month with the company Questionnaire - salespeople in 1 st month with the company 4050 questionnaires sent usable responses (response rate of 18%) 4050 questionnaires sent usable responses (response rate of 18%)

Multilevel: Amway Amway Cabouchon Cabouchon Dorling Kindersley Dorling Kindersley Herbalife Herbalife Kleeneze Kleeneze Mary Kay Cosmetics Mary Kay Cosmetics Nature’s Sunshine Nature’s Sunshine NSA NSA NuSkin NuSkin NutriMetics NutriMetics Oriflame Oriflame Studio Dee Studio Dee World Book Learning Journey World Book Learning Journey Single Level: Ann Summers Ann Summers Betterware Betterware Encyclopedia Britannica Encyclopedia Britannica Kirby Kirby Pippa Dee Pippa Dee Princess House Princess House Tupperware Tupperware Vorwerk Vorwerk World Book Childcraft World Book Childcraft

Research Methodologies Variables: Job characteristics Job characteristics –Proving oneself to others; personal feelings of success; work rewards and career growth; being in control Job satisfaction Job satisfaction Organizational commitment Organizational commitment –Involvement and loyalty; propensity to leave Met expectations Met expectations –Personal growth and well-being; achieving and accomplishing results; job and its image and rewards; undesirable job characteristics Image of direct selling Image of direct selling –Hard sell, misleading, illegal; advantages to buyers and sellers; better salespeople than retail stores

Characteristics of Respondents CharacteristicMLSLTotal Significance of Difference Percent full-time or self-employed prior to start of direct selling activity Percent with previous selling experience Percent with five years or more work experience prior to direct selling activity Percent with other job in addition to direct selling Percent for whom direct selling is primary work activity Percent who would seek another work activity if no longer involved in direct selling Percent who work with more than one direct selling company Percent female Percent with college or post graduate degree Percent married or living as married Median hours per week devoted to direct selling Mean intention to quit (where 1=never thought about quitting; 6=no longer active) Median age Median income £21,229£15,351£19,

Comparison of Salespeople

Single Level Salespeople median age 33.3 median age 33.3 median income – 15,351 median income – 15,351 education – 11.5% college or post graduate education – 11.5% college or post graduate work experience – 63.5% (5+ years) work experience – 63.5% (5+ years) primary job – 65.5% primary job – 65.5% Prior selling experience – 51.7% Prior selling experience – 51.7% Median hours a week for DS – 9.4 Median hours a week for DS – 9.4 Mean intention to quit – 2.07 Mean intention to quit – 2.07 Multilevel Salespeople median age 37.3 median age 37.3 median income – 21,229 median income – 21,229 education – 26.3% college or post graduate education – 26.3% college or post graduate work experience – 73.8% (5+ years) work experience – 73.8% (5+ years) Primary job – 35.7% Primary job – 35.7% Prior selling experience – 42.6% Prior selling experience – 42.6% Median hours a week for DS – 6.7 Median hours a week for DS – 6.7 Mean intention to quit – 1.75 Mean intention to quit – 1.75

Discussion: SL Salespeople importance of proving themselves importance of proving themselves –desire to increase self- confidence (younger, less educated, less experienced, lower income) importance of selling a highly competitive product (boost their confidence) importance of selling a highly competitive product (boost their confidence) independent contractor – simply sells the product/ service independent contractor – simply sells the product/ service –do not assemble a cadre of salespeople/ downlines –Consider DS as their primary work activity (more hrs) –Equates success with personal sales levels

Discussion: ML Salespeople personal selling is not the only focus personal selling is not the only focus – build and maintain one’s organization, a network of downlines. attains success through intrinsic feelings of personal satisfaction (recruiting, training, and motivating others) attains success through intrinsic feelings of personal satisfaction (recruiting, training, and motivating others) MLs move beyond a tactical focus on completing tasks (SLs) MLs move beyond a tactical focus on completing tasks (SLs) –strategic focus on facilitating the completion of plans through others

Implications for Managers Single Level DS companies: Single Level DS companies: –Focus on recruiting younger, less highly educated, less experienced people who view direct selling as their primary work activity Multilevel DS companies: Multilevel DS companies: –Recruit older, more highly educated people with greater full-time experience who wish to maintain another job in addition to DS work

Single Level Organizations Training focus: Training focus: –sales skills –product knowledge –Competitive advantage –Self-motivation –Confidence building activities Shorter-term sales goals – build their confidence incrementally Shorter-term sales goals – build their confidence incrementally

Single Level (cont’d) Recognition programs highlighting achievements Recognition programs highlighting achievements Compensation payments should be given frequently Compensation payments should be given frequently Stress individual performance rather than competition with a whole group Stress individual performance rather than competition with a whole group

Multilevel Organizations Training focus: Training focus: –Activities building organizational commitment –Communications or newsletters to highlight group achievements –Group meetings for those within a person’s downline –Any type of social activities

Amway team activity (Germany) Amway Team (Taiwan)