OPEN LETTER 2 of 6 TO DIRECT SALES ORGANISATIONS
This is the 2nd in a series of 6 Open Letters to Direct Selling Companies and Organisations. Every Tuesday for 6 weeks commencing 11 th June, we’re looking at some of the problems faced by the Direct Selling industry.
As stated last week in the first of the series, as enthusiastic advocates and supporters of this industry, it pains us to see the damage done to such a legitimate sector, by new entrants who do not understand, or who sadly, perhaps choose to disregard the ethos of the industry.
Such damage is not confined to new companies entering the sector. Equally, damage may be caused by sales people who have joined an established business – as a direct seller or as an employee and then, fail to follow the standards required.
OPEN LETTER 2 of 6:
Prepare, Monitor and Inform
Last time we dealt with the Pros Cons Opportunities & Threats of running a Direct Sales-Force.
This week we focus on the need for monitoring, as well as clearly guiding our sales-forces, in order to stave off could-be disaster.
The self-employed nature of the sales-force is intrinsic to Direct Selling, and is a single factor which goes a long way to explaining the continuing and great success of the business model.
At the same time, however, it presents a real challenge to the Direct Selling Organisation (DSO) who may not know much about what happens in the field, yet may well be held responsible for the conduct of participants.
This has very serious implications as regards reputation management, public liability and legal responsibility.
Not the DSO’s responsibility you say?
A DSO might argue that it is not responsible for what independent sales people say, even when it relates to the DSO’s business plan. Wrong!
Whereas it is certainly true that a DSO should not be held responsible for every pronouncement of every salesperson, the DSO will likely find itself responsible for misrepresentations by senior leaders – especially where the misrepresentations become widely disseminated through the network
Damaging misrepresentations
The most common of such damaging ‘misrepresntations’ relate to either
(i) the characteristics and properties of the company’s products
(ii) earnings potential.
When making statements about earnings potential, the DSO needs to exercise due caution and restraint, as well as including the appropriate statutory ‘warning’ language. The leaders should do likewise.
This also means exercising caution as regards representations of the success which has been or may be achieved by their people, in terms of, for example ‘lifestyle photographs’.
Monitor Monitor Monitor
Undoubtedly, DSOs should have Rules of Conduct on all these matters, but our main message here is to monitor what happens in practice.
Whatever the size of your organisation, there are various ways to achieve monitoring without necessarily using covert surveillance and becoming ‘Big Brother’
It may be considered by some that this is only a matter for the larger DSOs, but we firmly believe that the sooner a DSO starts, the better – irrespective of the size. Indeed, the smaller the organisation, the easier it should be to set the tone.
