Love them or leave them, product parties — both in-person and online — are here to stay.
Invitations from family, friends and acquaintances to check out the latest-and-greatest items will keep pouring into our inboxes and newsfeeds because lots of people are making lots of money. These network marketers are taking a bite out of traditional brick-and-mortar and online retail sales by leveraging personal relationships and social situations to ring up sales. According to the Direct Selling Association, a record 20.5 million people were involved in direct selling in 2016 with sales estimated at $35.54 billion.
We’ve gone Beneath the Trend to examine the rise of this phenomenon we call social selling (also known in the industry as multi-level and network marketing) and to gain a better understanding of the key drivers behind the purchases. Some of the findings surprised us.
Leveraging our artificial-intelligence backed moderator, we had a 20-minute qualitative conversation with 200+ people to understand what drove them to make their initial party purchase, the emotions tied to the purchase, and what’s happened since — have they gone back for more or were they one-and-done?
What they’re buying — and why
In our study, health and beauty products represented over 35% of first-time purchases. It was also the category with the most repeat and consistent purchases. Apparel was a distant second (14%) followed by jewelry, kitchen supplies, house décor, food and household cleaning products.
Turns out, the “hook” that drove these consumers to make the initial purchase came down to one of these three Ps:
- Product
47% of respondents pointed to the product quality and/or its benefits as the key, first-purchase driver — these buyers were curious and wanted to try something new. - Person
For 37% of respondents, their relationship with the seller was the main driver. The desire to support the seller or feelings of obligation were noted, along with the impact of receiving a strong recommendation from a trusted source. - Price
For the 16% of respondents who pointed to price as the key factor, the perception of getting a good deal not available anywhere else motivated them to buy.
To our surprise, the “P” word that didn’t bubble to the top was “pressure.” When we looked into the emotional aspects of the first purchase, only 11% of respondents felt pressured to buy, while over 50% expressed a rush of excitement at the prospect of getting a good deal or trying a new product for the very first time. Trust was also a key factor — along with the belief that the sellers were consultants who really care about them.
The Halo Effect
So what keeps buyers coming back for more? Again, it comes down to the unique and personalized execution of the 3 Ps noted above: Consumers like purchasing quality products from trusted people who they perceive are giving them a good deal.
Brands spend hundreds of millions of dollars creating perceptions of high product quality. But in social selling situations, we learned there’s an inherent perception of higher quality and exclusivity that make these products must-have items. When you combine that with the personal relationship the consumer has with the seller, an instantaneous halo effect of quality and value occurs.
At the end of the day, the success of social selling boils down to this: It feels good. It’s a better consumer experience when you’re seen as a person — not just as a customer – and communicated to based on your unique and special needs. Combine that with the rush of getting a quality product not available anywhere else and the feeling you get from being a good, supportive person … and what’s not to love?
Download the full Beneath the Trend report here.
