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Sunday
Jun092013

Does Personalization Help Create Explosive Growth?

What makes for the perfect direct selling product?  One that is demonstrable, certainly.  One that you likely will not be able to get anywhere else, or that geography precludes you from being able to access easily.  All these things helped propel Avon, for instance, into the distribution company it became, especially in countries like Brazil, when product traveling down the Amazon river to a captive audience was unique and powerful.

Today, Amazon (the company) has actually taken the geography factor out of the equation in the US for many direct selling companies.  With a computer and the willingness to wait a day, a consumer can order a wide variety of products that will be delivered to the door.  Even Walmart's distribution strategy has not had such a powerful impact on direct selling as Amazon.com has.

So, what has had the most impact on a "unique starved" public?  Personalization.  Without philosophizing on the consumer reasons for this, consider that, in the past decade, despite the inherent difficulties in providing product already ordered made to order, newer direct sales companies have made personalization work.  They approached marketing differently.  Think of Paperly, Initials Inc., and J. Hilburn.  They assume they can make a product just right for you, and deliver it to you on time.

Three companies in particular have taken personalization to a whole new level, while they grew to over a half billion dollars in the last 5-7 years: Scentsy, ViSalus, and Thirty One Gifts.  What separates these three from the rest of the pack is how they are using personalization as a strategy.  They are engaging your mind even before you choose their product.

Not just content with personalizing your fragrance choice with over 80 fragrances and personalized warmers, Scentsy added a brand new arrow to their quiver, Sincerely Scent: a new tool that allows you to customize a card to a loved one.  Whether it's a birthday card or a thank you card, you can now upload a picture and add a variety of scents to it and send it to a friend or relative.  

ViSalus is a powerful example of how personalization helped explode growth.  While their many competitors copy their compensation plan and car program (28 companies are copying ViSalus at my last count), they overlook the real magic behind ViSalus' attraction.  Before ViSalus distributors begin to sell you a product, they ask you to pick a Goal, to personalize what the product will do for you.  While most choose weight-loss goals, many have chosen to change their lives wth bigger ideas that have nothing to do with losing weight.  This is the magic of personalization.   

And then, there are the up and coming companies providing personalization by sewing or labeling their products in categories like home organization, fashion bags, etc.  Take Miche, for instance.  They have made it easy to personalize your handbag by providing an easy way to change its look.  Even more possibilities would exist if the consumer were able to personalize it further.  Is Miche in the fashion business, or the personalization business?  Initials, Inc. understood this value proposition, and is now on the Inc 500 List.

Which brings me to Thirty One Gifts.  Although there are many reasons for the company's resounding success, one reason must surely be the freedom of choice a consumer feels when browsing through a catalog.  There are a wide variety of options for bags, and many more options to customize each one.  Now consider this: the company's run rate is approaching $1B for 2013.  And the Handbag & Home Organization categories' world market size is $14B.  Will someone try to inform Cindy Monroe that the company could be about to hit the proverbial wall?   Should she believe that she can capture more than 1/14th of the world's market (in North America alone) with as much vigor as her sales currrently run?  

Or is there another avenue of thought?  Does personalization explode the size of markets?  Does offering endless possibilities within a product category create more chances of selling a product to an individual customer?

Personalization is a powerful revenue generator for direct selling companies.   I cannot even imagine Walmart or Amazon deciding to offer this kind of personalization.      

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