Direct Selling

Overview

Maximizing the efforts of distributors, adjusting to shifting market penetration patterns and refining product development are just some of the challenges facing direct selling companies today.

Through years of detailed work with some of the largest direct selling and multilevel marketing (MLM) organizations, L.E.K. has built a profound understanding of how to optimize business models in the space. We apply deep industry expertise and worldwide resources to help clients design and activate strategic programs. Our services include generating insights into the market landscape and underlying trends, prioritizing new geographies and market segments, assisting with the delicate balance of selling products or services through traditional and nontraditional mechanisms, multichannel optimization, distributor incentives and management, pricing, product lifecycle management, and more.

Key Questions and Challenges

Our experienced professionals have a deep understanding of direct sellers’ evolving business challenges in today’s marketplace. Some of the issues we typically tackle include:

  • How well are my distributors performing in their own businesses, and what can I do to maximize their potential for success?
  • How do I innovate my product/service and opportunity offer to be relevant to the next generation of distributors?
  • What products and services should I consider adding to my distributor pipeline?
  • How well are we performing in recruiting? Are we reaching saturation in any given geography or market segment? What do we need to do to extend our runway?
  • How well does my existing compensation plan match my evolving business objectives? How motivating is it for my distributors? What can I do to optimize it?
  • How should we think about (and potentially prioritize) growth outside our core markets?

Examples of Our Work

To learn more about how we help clients create value in the direct selling sector, please refer to these insights and case examples:

  • One of the top direct selling companies in the world had been experiencing flat to declining sales as its core market reached full penetration. While the business had operated globally for over a decade, the company had more aggressive growth objectives for its international operations and asked L.E.K. to assist in developing a business plan to support this growth strategy. Read more
     
  • One of the world’s most respected party plan models was facing uncertainty; there were more apparent opportunities than there were resources to capitalize on them. While a “first-class” problem, it is not uncommon for executives to make suboptimal funding decisions. L.E.K. helped apply a rational framework to this issue and prioritize where the company placed its bets, to great effect.
     
  • A top-10 MLM in the wellness space was reconsidering the right way to organize its go-to-market approach. L.E.K. was engaged to help develop insights about the consultant force and realign them in a way that better calibrated the generation of current sales with the recruitment and development of robust downlines. The resulting changes to the incentives powered the next wave of profitability for the company.
     
  • A leading wellness direct seller was struggling with the management of its product development pipeline as SKUs were proliferating, organizational complexity was increasing and profits were declining. L.E.K. helped the company identify key pain points in its overall product lifecycle management (PLM) process and developed initiatives for mitigating each. We then worked with the client to transition the initiatives to internal task forces to see them to implementation.
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