Are “Tweener” companies the next big trend in direct selling?
March 9, 2011
Tweener [tween-er] n. — A company too big for affiliate marketing and too small for network marketing.
Smart companies know the future of marketing includes “social selling”, tapping individual social networks with a great product and story. Direct selling is an optimal way to do this, only most companies who see promise in the model do not necessarily need the infrastructure of a full-fledged direct selling company.
Recently, demand for a deeper social selling has attracted to our industry a new kind of company, the “Tweener.” No it’s not a new juice product aimed at 9-to-11 year-old. Rather “Tweener” refers to a company seeking to leverage the deep incentive selling of network marketing while remaining light on their feet like an affiliate marketer.
This concept could vastly extend our industry to products that would never have been viable for us before. In my opinion, no industry is better suited for person-to-person selling (digital or otherwise), than network marketing. We invented social marketing, if only the analog kind. Mainstream companies are indeed recognizing this, thus the new wave of interest in the industry is emerging will likely have a huge impact on us in coming years.
Industry experts are aware that a majority of products that might be a fit for the direct selling model can’t sustain an actual network marketing company. To fit into the model, a product/service must meet a fairly rigid set of criteria such as product line expandability, price and margin parameters, etc., and must meet more subjective requirements as well. Some products are fine in and of themselves but are either a one-off or just don’t have enough momentum-building fuel to power a full-fledged company.
Let’s say you’ve developed a diamond-encrusted golf ball you KNOW would be a hit with golfers. But to sell the ball, you need to be able to tell the story of why the diamonds will improve your golf game, difficult to do on a retail shelf. You’ve determined direct selling is the best way to get your story told and incentivize multiple levels of members. Yet you don’t possess the substantial knowledge (or substantial cash) it takes to start an MLM company, and anyway it seems overkill to build a national selling force to sell a little ball.
Several companies using this “tweener” model have launched their platforms, and demand is growing. Right now the focus is on retooling currently available solutions; admin back office, simple generational incentive/commission payouts, ecommerce shopping carts including subscriptions and autoship/continuity orders, and affiliate and replicated websites. All delivered without the extra baggage of operating a full-bore network marketing company.
Technology for Tweeners
I have been talking with industry technology consultant Mel Atwood (who first alerted me to this trend) about how the industry can capitalize on this this opportunity. We agree the answer lies in an incentive commission structure to make sales work at multiple selling levels.
The software used to manage the commissions is key. Software systems are widely available for companies for both MLM and affiliate marketing, but none that we have found are built for these Tweener models (what Mel dubs “Social-driven Marketing”). With network marketing, software is all or nothing and with affiliates it’s nothing much at all.
For your diamond-covered golf ball you’ve considered affiliate marketing, say, offering a $10 commission for each one sold. But it’s difficult to be heard above the noise and the affiliates don’t seem to care about your super cool golf ball. They just want to make a buck and move to the next product. And you can’t incentivize affiliates beyond one level of sales.
E-commerce is another channel. But online advertising can get very expensive and is cost-prohibitive in competitive markets like golf. Some golf equipment companies spend hundreds of thousands a month on pay-per-click ads and search for a few crumbs of online leads and sales. This may shut you out at the start.
So, the opportunity for direct selling is in flexible commission models that work with surface-level social selling, where a simple transaction is afforded easily and multiple layers of recruiting and selling can take place.
This software adopts the most compelling aspects of both selling models, leveraging the fast-and-easy commissioning of affiliate marketing and combining it with the levels-deep army-building of network marketing.
For your golf ball marketing, the end result of all this is a motivated field sales force, with multiple ways to make income, who are excited about your product and are paid well for recommending it to others.
We are putting together a white paper on this subject for presentation at industry conferences. If this category describes your company or product, I’d like to talk with you.
Jonathan Gilliam is President of Momentum Factor LLC, a marketing consulting firm for direct selling companies and corporate clients. He works to improve marketing performance and momentum for his clients by building and protecting their brands and engaging their field and customers. http://www.momofactor.com/
March 10, 2011 at 3:32 pm