Re-energizing Growth, By Re-thinking Crises
Something not altogether good was brewing in direct selling in late 2019. The Direct Selling Association reported flat-line global sales performance of $35.2 billion, down slightly from 2018. China’s 100-day reviews of nutritional products halted companies from selling in China, surprising everyone. Continued compliance pressures in China clearly stressed sales in the channel. The domestic regulatory environment brought new challenges as well. And for many companies, sales just weren’t where they needed to be for continued market expansion. Pressure everywhere was building, but no one could foresee what was around the corner.
C-suite strategic planning, course corrections, realignment of corporate spending, new compensation structures, and the like were underway throughout the industry when pandemic struck in early 2020. COVID-19 could have compounded lingering 2019 circumstances, but that is not what happened for these seven direct selling companies.
With the benefit of time and distance, 2020 sales numbers and some hindsight, these industry leaders take a short, retrospective look inside their companies during a year like no other. In so doing, they help the direct selling industry re-think crises while telling the stories of how their teams met disruptive challenges and leveraged 2020’s new business reality to create a renewal that re-energized their field organizations and helped solidify their growth trajectories for 2021 and beyond.
COVID-19 could have compounded lingering 2019 circumstances, but that is not what happened for these seven direct selling companies.
This industry leader takes a short, retrospective look inside Princess House during a year like no other.
Princess House
Founded / 1963
Top Executive / Lynne Coté, President & CEO
Products / Home Décor, Kitchenware, Food & Beverage, Wellness
In 2019, Princess House sales were in decline for the third year, and the company’s programs and communications strategies struggled to motivate or induce growth. Still, their discouraged field leaders remained loyal, and when three-months of evaluation wrapped at year’s end, Lynne Coté—part of the Board’s review—joined Princess House as president/CEO in January 2020.
Coté was at the helm for only eight weeks when the pandemic came calling, but it had been an introspective and constructive couple of months. Leadership re-organization began with clarification of roles and responsibilities, and they identified company strengths, weaknesses, current challenges and anticipated future ones. (The pandemic was not on their list.)
After redefining their mission and values, they got to work on strategy and tactics—tech enhancements, an innovative framework, improved training and tools, experiential opportunities, as well as leadership development, cultural connectivity and market expansion.
Then spring hit hard with lockdowns, transitioning to work from home and plummeting sales in the first weeks of the pandemic. Soon Princess House measured a first-quarter decline of 7 percent compared to 2019.
“Our discussions at the executive level were all about ACTION. What could we do that would encourage the field to try different things and to pivot to a digital environment?” Coté remembers.
Fortunately, that deep dive Princess House took just months prior proved invaluable to creating opportunity through chaos. “In fact, that became our rally cry to the field that the time was NOW. Because we had the products people needed during the crisis, it was up to us to create the opportunity,” she says.
A shift to Zoom extended the reach of grounded Regional Sales Managers to train the field, let Coté get to know Boston area staff from her home in North Carolina, and opened a first-ever transparent line of communication with the field. They created deep discount promotions for April that utilized inventory. They stopped demotions, extended payment terms, and lengthened incentive selling periods.
“Our goal was to let the field know we had their backs, and together we were going to help each other continue and even grow our business. By the middle of April, we saw our sales begin to increase double digits,” Coté says.
Even as sales began to pivot in April, recruitment was nil. So, Princess House offered a limited time only, discounted entry fee in May, which grew their consultant base 50 percent. With the existing field selling well, the challenge became on-boarding a lot of people fast.
Coté says a good portion of the recruiting was done at the consultant level rather than the leader level. So, they made it simple for consultants to onboard new team members with a one-page document. It worked.
“We saw the activity rate of new consultants in May, and we knew that we were going to far exceed our expectations for 2020,” Coté says.
Laser-focused, Princess House doubled their business every single month from April forward, but Coté says, “The huge growth in our business was not easy on us or the field. We just did not have the inventory to support this growth.”
With 120-day lead times out of China, feeding inventory became their biggest challenge and was further complicated by the inability of UPS to support increased levels of service needed, especially on the West Coast. This reduced level of service put Princess House behind 12 weeks in shipping. “We were very nimble though in setting up FedEx, USPS, and even a private delivery carrier. We even set up a pop-up will-call center for leaders to come and pick up their customers’ orders,” Coté says.
Princess House’s trajectory continues upward in 2021 following a 2020 renewal that Coté says “completely changed the company.” Inventory purchase levels are up, and warehousing has expanded by 200,000 square feet. While the L.A. port situation and lack of trucking carriers still make logistics difficult, Princess House products remain relevant in the marketplace. “The trend to home cooking is not going away any time soon,” Coté says.
Looking back now, Coté believes the key to their renewal was the combination of supporting the field with tools they could use, transparent communication that made them feel like partners, and a leadership team that almost immediately became a high-performance executive team equipped to create opportunity out of chaos.
“I firmly believe the company has a renewed sense of purpose after recent years of declining results. I heard when I was consulting in December that there was no more growth to be had in the current market—I do not believe that is the thought now,” Coté says.
Excerpt from the Direct Selling News May 2021 Cover Story: “Renewal, Re-energizing Growth, By Re-thinking Crises.”
