Comparisons of Comparisons of Salespeople in ML vs. SL Salespeople in ML vs. SL

Direct Selling Direct Selling OrganizationsOrganizations

Mia YanMia Yan

Jake RaynardJake Raynard

Background of StudyBackground of Study

• Purpose:Purpose:

– Determine whether ML and SL Determine whether ML and SL salespeople differ on behavioral, salespeople differ on behavioral, motivational, or descriptive motivational, or descriptive characteristicscharacteristics

Implications for managers and Implications for managers and organizationsorganizations

Sample & Data CollectionSample & Data Collection•SampleSample: 22 member companies of : 22 member companies of

the Direct Selling Association in the the Direct Selling Association in the UKUK

• Questionnaire - salespeople in 1Questionnaire - salespeople in 1stst month with the companymonth with the company

• 4050 questionnaires sent - 673 4050 questionnaires sent - 673 usable responses (response rate of usable responses (response rate of 18%)18%)

Multilevel:Multilevel:• AmwayAmway• CabouchonCabouchon• Dorling KindersleyDorling Kindersley• HerbalifeHerbalife• KleenezeKleeneze• Mary Kay CosmeticsMary Kay Cosmetics• Nature’s SunshineNature’s Sunshine• NSANSA• NuSkinNuSkin• NutriMeticsNutriMetics• OriflameOriflame• Studio DeeStudio Dee• World Book Learning JourneyWorld Book Learning Journey

Single Level:Single Level:• Ann SummersAnn Summers• BetterwareBetterware• Encyclopedia BritannicaEncyclopedia Britannica• KirbyKirby• Pippa DeePippa Dee• Princess HousePrincess House• TupperwareTupperware• VorwerkVorwerk• World Book ChildcraftWorld Book Childcraft

Respondent Proportion

Multilevel70%

Single Level30%

Research MethodologiesResearch MethodologiesVariablesVariables::• Job characteristics Job characteristics

– Proving oneself to others; personal feelings of success; Proving oneself to others; personal feelings of success; work rewards and career growth; being in controlwork rewards and career growth; being in control

• Job satisfactionJob satisfaction• Organizational commitmentOrganizational commitment

– Involvement and loyalty; propensity to leaveInvolvement and loyalty; propensity to leave

• Met expectationsMet expectations– Personal growth and well-being; achieving and Personal growth and well-being; achieving and

accomplishing results; job and its image and rewards; accomplishing results; job and its image and rewards; undesirable job characteristicsundesirable job characteristics

• Image of direct sellingImage of direct selling– Hard sell, misleading, illegal; advantages to buyers and Hard sell, misleading, illegal; advantages to buyers and

sellers; better salespeople than retail storessellers; better salespeople than retail stores

Characteristics of Characteristics of RespondentsRespondentsCharacteristicCharacteristic MLML SLSL TotalTotal

Significance of Significance of DifferenceDifference

Percent full-time or self-employed prior to start of direct Percent full-time or self-employed prior to start of direct selling activityselling activity 50.950.9 24.024.0 42.742.7 0.00010.0001

Percent with previous selling experiencePercent with previous selling experience 42.642.6 51.751.7 45.445.4 0.0340.034

Percent with five years or more work experience prior to Percent with five years or more work experience prior to direct selling activitydirect selling activity 73.873.8 63.563.5 70.770.7 0.0350.035

Percent with other job in addition to direct sellingPercent with other job in addition to direct selling 64.364.3 34.534.5 55.255.2 0.00010.0001

Percent for whom direct selling is primary work activityPercent for whom direct selling is primary work activity 32.432.4 62.462.4 41.441.4 0.00010.0001

Percent who would seek another work activity if no longer Percent who would seek another work activity if no longer involved in direct sellinginvolved in direct selling 20.620.6 9.09.0 17.017.0 0.0010.001

Percent who work with more than one direct selling Percent who work with more than one direct selling companycompany 15.215.2 10.910.9 13.913.9 0.0920.092

Percent femalePercent female 71.271.2 73.573.5 71.971.9 0.2970.297

Percent with college or post graduate degreePercent with college or post graduate degree 26.326.3 11.511.5 21.821.8 0.00010.0001

Percent married or living as marriedPercent married or living as married 69.569.5 67.167.1 68.868.8 0.2070.207

Median hours per week devoted to direct sellingMedian hours per week devoted to direct selling 6.76.7 9.49.4 7.67.6 0.00010.0001

Mean intention to quit (where 1=never thought about Mean intention to quit (where 1=never thought about quitting; 6=no longer active)quitting; 6=no longer active) 1.81.8 2.12.1 1.91.9 0.0110.011

Median ageMedian age 37.337.3 33.333.3 36.036.0 0.0130.013

Median incomeMedian income £21,229£21,229 £15,351£15,351 £19,212£19,212 0.00010.0001

Comparison of SalespeopleComparison of Salespeople

Primary Job

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Single Level Multilevel

Organization Salespeople

DS

as

Pri

mar

y Jo

b

Prior Selling Experience

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Single Level Multilevel

Organization Salespeople

Per

cent

age

with

Sel

ling

Exp

erie

nce

Comparison of SalespeopleComparison of Salespeople

Median Age

31

32

33

34

35

36

37

38

Single Level Multilevel

Organization Salespeople

Med

ian

Age

Median Income

£0

£5,000

£10,000

£15,000

£20,000

£25,000

Single Level Multilevel

Organization Salespeople

Med

ian

Inco

me

Comparison of SalespeopleComparison of SalespeopleEducation

11.50%

26.30%

0.00% 10.00% 20.00% 30.00%

Single Level

Multilevel

Org

aniz

atio

n Sa

lesp

eopl

ePercentage with College or Post Graduate

Education

Work Experience

63.50%

73.80%

55.00% 60.00% 65.00% 70.00% 75.00%

SingleLevel

Multilevel

Perc

enta

ge w

ith 5

+ ye

ars

of W

ork

Expe

rienc

e

Organization Salespeople

Comparison of SalespeopleComparison of Salespeople

Median Hours a Week for DS

0.0 2.0 4.0 6.0 8.0 10.0

Single Level

Multilevel

Org

aniz

atio

n S

ales

peop

leMedian Hours

Mean Intention to Quit

1.4 1.6 1.8 2.0 2.2

Single Level

Multilevel

Org

aniz

tion

Sal

espe

ople

Mean Intention to Quit

Comparison of SalespeopleComparison of SalespeopleSingle Level SalespeopleSingle Level Salespeople• median age 33.3median age 33.3• median income – median income –

15,35115,351• education – 11.5% education – 11.5%

college or post college or post graduategraduate

• work experience – work experience – 63.5% (5+ years)63.5% (5+ years)

• primary job – 65.5%primary job – 65.5%• Prior selling experience Prior selling experience

– 51.7%– 51.7%• Median hours a week Median hours a week

for DS – 9.4for DS – 9.4• Mean intention to quit Mean intention to quit

– 2.07– 2.07

Multilevel SalespeopleMultilevel Salespeople• median age 37.3median age 37.3• median income – median income –

21,22921,229• education – 26.3% education – 26.3%

college or post college or post graduategraduate

• work experience – work experience – 73.8% (5+ years)73.8% (5+ years)

• Primary job – 35.7%Primary job – 35.7%• Prior selling experience Prior selling experience

– 42.6%– 42.6%• Median hours a week Median hours a week

for DS – 6.7for DS – 6.7• Mean intention to quit – Mean intention to quit –

1.751.75

Discussion: SL SalespeopleDiscussion: SL Salespeople• importance of proving importance of proving

themselvesthemselves– desire to increase self-desire to increase self-

confidence (younger, less confidence (younger, less educated, less educated, less experienced, lower income)experienced, lower income)

• importance of selling a importance of selling a highly competitive highly competitive product (boost their product (boost their confidence)confidence)

• independent contractor – independent contractor – simply sells the product/ simply sells the product/ service service – do not assemble a cadre of do not assemble a cadre of

salespeople/ downlinessalespeople/ downlines– Consider DS as their Consider DS as their

primary work activity (more primary work activity (more hrs)hrs)

– Equates success with Equates success with personal sales levelspersonal sales levels

Discussion: ML SalespeopleDiscussion: ML Salespeople• personal selling is not personal selling is not

the only focusthe only focus– build and maintain build and maintain

one’s organization, a one’s organization, a network of downlines.network of downlines.

• attains success attains success through intrinsic through intrinsic feelings of personal feelings of personal satisfaction satisfaction (recruiting, training, (recruiting, training, and motivating others)and motivating others)

• MLs move beyond a MLs move beyond a tactical focus on tactical focus on completing tasks (SLs) completing tasks (SLs) – strategic focus on strategic focus on

facilitating the facilitating the completion of plans completion of plans through othersthrough others

Implications for ManagersImplications for Managers• Single Level DS companies:Single Level DS companies:

– Focus on recruiting younger, less Focus on recruiting younger, less highlyhighly educated, less experienced people who view educated, less experienced people who view direct selling as their primary work activitydirect selling as their primary work activity

• Multilevel DS companies:Multilevel DS companies:– Recruit older, more Recruit older, more highlyhighly educated people educated people

with greater full-time experience who wish with greater full-time experience who wish to maintain another job in addition to DS to maintain another job in addition to DS workwork

Single Level OrganizationsSingle Level Organizations

• Training focus:Training focus:– sales skillssales skills– product knowledgeproduct knowledge– Competitive advantageCompetitive advantage– Self-motivationSelf-motivation– Confidence building Confidence building

activitiesactivities

• Shorter-term sales Shorter-term sales goals – build their goals – build their confidence confidence incrementallyincrementally

Single Level (cont’d)Single Level (cont’d)

• Recognition Recognition programs programs highlighting highlighting achievements achievements

• Compensation Compensation payments should be payments should be given frequentlygiven frequently

• Stress individual Stress individual performance rather performance rather than competition than competition with a whole groupwith a whole group

Multilevel OrganizationsMultilevel Organizations

• Training focus:Training focus:– Activities building Activities building

organizational organizational commitmentcommitment

– Communications or Communications or newsletters to highlight newsletters to highlight group achievementsgroup achievements

– Group meetings for those Group meetings for those within a person’s within a person’s downlinedownline

– Any type of social Any type of social activitiesactivities

Amway team Amway team activity (Germany)activity (Germany)

Amway Team (Taiwan)