Hard Sell Intro

7/28/2019 Hard Sell Intro

http://slidepdf.com/reader/full/hard-sell-intro 1/11

Introduction

Direct Selling

This book is based on the findings of an ethnographic study focussing on the UK

direct selling industry and, specifically, on the sociologically significant aspects of

the selling practices, interaction order, internal culture and organisational

characteristics of two home improvement companies, Mega Home Improvements(MHI) and Big Time Products (BTP). The study also draws upon a range of

publicly available material, as a means of demonstrating that the findings obtained

from these companies are largely representative of the UK industry as whole.

What presents itself throughout is an industry with an insular internal culture,

supporting a range of practices and an organisational form that are, often, at odds

with the image these companies present to the public. Moreover, certain aspects of this discrepancy between public image and private reality are not co-incidental but

are self-consciously orchestrated as, to a large extent, the business of home

improvement direct selling relies upon the maintenance of a high degree of skilful

and co-ordinated impression management for its very existence.As is also made evident throughout this book, the distance between public

image and private reality within this industry spans most levels of its operations,

from the interaction between sellers and customers to the very nature of the

organisations themselves. To a great extent, it is these characteristics of this form

of direct selling that have gone some way to ensuring that, thus far, it has been

overlooked as an area for sociological investigation. However, prior to engaging

with these issues directly, and as a means of clearly identifying the specific form

that is explored in this book, it is necessary to outline what defines direct selling as

a whole while also, crucially, clearly distinguishing between two distinctly separate

contemporary forms of this commercial activity.

What is Direct Selling?

There are two major types of commercial organisation to which the term direct

selling can be applied. Both have similar origins, and continue to share some broad

characteristics. However, direct selling has evolved to produce two structurally and

qualitatively distinct styles of organisation.

Direct selling can be traced to the ‘door-to door salesperson’, common until the

latter part of the twentieth century, a figure who gained almost iconic status in



2 The Hard Sell

America (Biggart, 1989). While traditional door-to-door selling is undoubtedly still

in evidence, it has gradually been superseded by contemporary direct selling

organisations that have adopted its methods in evolved forms. What unites all

forms of direct selling, including its early incarnations, is the tendency for business

to be conducted in the customer’s home rather than on commercial premises. Inaddition, the seller rather than the customer normally makes the first approach.

Network Direct Selling Organisations

One particular form of contemporary direct sales organisation has been the subject

of a previous sociological study: Charismatic Capitalism, Direct Selling

Organisations in America (Biggart, 1989). In this book, Biggart traces the

evolution of direct selling in the United States, from its humble origins with the

‘Yankee peddlers’ of the past to the, often, very large corporations in the presentwho sell directly to American consumers.

According to Biggart, direct selling has grown to become a major form of

commercial activity in the US, despite encountering opposition from other sectors

of the business community during various stages in its development. In particular,

as direct selling expanded in the 1920s, small town retailers in many towns across

America were concerned that it represented unfair competition. Shopkeepers

became increasingly concerned with having to compete with visiting salespeople,

whose businesses had neither fixed overheads nor an investment in the community.

Local chambers of commerce pressured politicians to institute bureaucratic

barriers, in the form of relatively costly trading licences and other trade

restrictions, as a means of combating the perceived commercial threat. Suchrestrictions, compounded by the subsequent economic depression of the 1930s,

created difficulties for many of those engaged in direct selling. However, a

combination of greater organisation in the sector, an improving economy, and an

organised reaction to the restrictions placed upon the industry led to its increasing

development in the post-war era.

Branch Office Organisation

Biggart identifies three important changes that aided the growth of the direct

selling industry during the 1940s. Firstly, the establishment of local branch offices,that had emerged from around 1915 onwards, aided recruitment and training of

new salespeople, and created a more formal and committed relationship between

salespeople and organisations. From the 1940s onwards these branch office DSO’s

increasingly eclipsed the previously predominant ‘home office’ form of

organisation, where sellers had maintained a more distant relationship withcompanies – often only maintaining contact by mail and other messaging services

(Biggart, 1989).



Introduction 3

Party Plan Direct Selling

A second significant innovation in direct selling was the introduction of a new

selling strategy known as the party plan (Biggart, 1989). Party plan made use of the

informal atmosphere of social gatherings as a venue for direct selling. This had the presumed advantages of generating multiple sales, whilst reducing the tensions

inherent in formal one-to-one selling situations.

The party plan was an important innovation for several reasons. First, itallowed the salesperson to be more efficient in the use of his – and now more

frequently her – time. Rather than being addressed to one prospective

customer, the sales demonstration was delivered to a roomful, sometimes asmany as 15 people. The hostess, moreover, did much of the work. She issued

the invitations, served the refreshments, and provided the location. Not only

were the prospective customers brought together by the hostess, they were

screened for interest in buying.A more important innovation was that it skilfully blurred the social and

economic spheres. An essential economic function, the demonstration of

consumer goods, was transformed into, or at least confused with, a social

function. The cues from social behaviour – a friend’s invitation, a gathering

of acquaintances, a private home – set the stage for mannerly conduct and thefulfilment of social obligations. For many of the guests good manners seemed

to dictate that one help the hostess/friend to have a successful party. Success

seemed to require that one show interest in the ostensible purpose of thegathering – the chance to inspect products – through at least a modest

purchase (Biggart, 1989, p. 43).

Party plan arose within an economic environment increasingly favourable to direct

selling (Biggart, 1989). While the growth of consumerism had been interrupted by

depression and war, renewed confidence and full employment policies in the

period after the war heralded an era of massive expansion. Moreover, expanded

industrial capacity and increasing efficiency now gave manufacturers the capability

to supply far more than was currently being sold through existing outlets.

Manufacturers’ desire to exploit these potentially larger markets at this time led to

an extension in direct selling, as it was recognised that selling goods directly to the

public created sales that would not have occurred had the initiative in the process

been left to the consumer (Biggart, 1989). Thus, increased demand could be

created by both stimulating desire through advertising and by salespeople pro-actively seeking out potential customers and persuading them, through skilful

presentation, that the goods they neither needed nor particularly wanted were

essential purchases.

The direct selling industry’s use of social networks to widen its potential client

base through the party plan was part of the response to these favourable conditions

and achieved a degree of success to the extent that this manner of marketing is

currently widely employed in the US.

This development also highlights an important aspect of direct selling in that, in

all of its forms, it tends to colonise and, in some cases, manipulate aspects of



4 The Hard Sell

normal interaction as a means of doing business. In this case, the party plan

employs the norms of friendship, and friendship networks, as a vehicle for selling

goods.

Network Marketing

A further development, now generally referred to as ‘network marketing’, appearedto present greater opportunities and increased efficiency for both salespeople and

direct marketing organisations. This overcame one potentially negative feature of

the way in which party plan exploited friendship networks, in that party plan

organisers could exhaust the sales opportunities amongst friends, family and other

acquaintances fairly quickly.

Network marketing created new opportunities for business expansion beyond

one’s own immediate clientele, as it entailed salespeople being paid a bonus and/or

commission on the business of other organisers that they managed to recruit intothe organisation. Thus, within the network structure salespeople could utilise

social/client contacts, not only as a potential source of customers yielding a one-off

commission payment, but also as a source of recruits. New recruits would provide

income to the sponsoring agent from their own activities, and from the activities of

all the people that recruits subsequently enlisted, and so on and so forth. Active

salespeople could, therefore, envisage potentially limitless income, as the chains

which developed grew, and those that burgeoned down the line continually cast an

increasingly wider net in the pursuit of new sales opportunities and new recruits.

Although network marketing presented evident attractions with respect to

salespeople’s long-term earnings potential, this innovation also promised obvious

advantages for direct selling organisations themselves (Biggart, 1989). Network marketing held the potential for DSOs to grow exponentially as sellers sought to

build their networks and, consequently, their incomes. Furthermore, it was in the

interests of salespeople seeking to extend their chain to become involved in both

recruiting and training of new agents, as they now profited by it. Therefore,

network marketing created the conditions for massive expansion of DSOs whilst

relieving the organisations of a great deal of the responsibility and cost of

recruitment and training. The network marketing form of organisation and the

party plan marketing method are now normally found together, whilst network

marketing is also prevalent amongst the remaining door-to-door companies selling

low-cost domestic products.

‘A Feminine Organisation’

Network direct selling is particularly attractive to women: 80 percent of sellers are

now female. Biggart claims that these DSO’s have evolved to become increasinglywomen friendly due to the ‘social’ characteristics of both the organisations and

their marketing strategies (1989). These organisations represent a departure from

the rigid, competitive, male-dominated and highly bureaucratic forms of

organisation that characterise most contemporary businesses.



Introduction 5

One major attraction for women is that agents can choose their own level of

activity and commitment within the organisation. Network direct sellers are

normally self employed and, while some approach this type of work as a full-time

career, the majority vary between regular and sporadic part-time activity. This is

seen to hold specific attractions for women wishing to generate income whilst juggling their working lives with the demands of their traditional family role.

Many of the major companies involved in this sector also promote productsspecifically associated with traditional images of femininity. A good deal of the

market is built around goods that are either domestic (e.g. kitchenware, household

cleaning products) or particularly used by women (e.g. cosmetics, lingerie etc.).

Companies such as Tupperware (kitchenware), Amway (domestic and cleaning

products) and Mary Kay Cosmetics (health and beauty) are examples of market

leaders in network direct selling.

This summary very briefly outlines Biggart’s account of some of the key

developments that produced the contemporary direct selling industry. However,while Biggart acknowledges the continued existence of other forms of direct

selling, her focus is predominantly on this ‘subset of the industry’ – the more

female dominated network form of organisation (Biggart, 1989).

In support of Biggart’s privileging of this type of direct selling it must be noted

that the ‘governing’ bodies of the direct selling industry (Direct Selling

Associations which are affiliated to the World Direct Selling Association), that

identify themselves as representing the industry as a whole, are comprised

exclusively of the same or similar organisations as Biggart studied in the United

States. Moreover, the general utility of the Biggart study is reinforced by the fact

that, while her research was conducted in the USA, the global complexion of

contemporary direct selling appears to have been highly influenced by theAmerican model (www.dsa.org, 1999).

Overall, it must be acknowledged that Biggart’s study ably investigates central

aspects of a significant socio-economic phenomenon. However, her study tends to

set to one side another large class of direct selling organisations, emerging from the

same lineage, whose development has followed a different trajectory. These

organisations most definitely refer to themselves as being engaged in direct selling,

although their organisational structures, practices, composition and strategies set

them quite clearly apart from the networking form.

In the interests of clarity, and given that both types of direct selling will be

referred to at some points, it is important to clearly distinguish the type of directselling organisation I have studied from that researched by Biggart. However, it

must be emphasised that evaluation of, and comparison with, the Biggart study,

and the organisational form she presents, is not a central concern of this book.

Nonetheless, when referring to the type of organisation central to Biggart’s study I

employ her term Network Direct Selling Organisation (NDSO), signifying the useof social networks to sell cheap consumables as being the central distinguishing

characteristics of this form. By contrast, when referring to the distinctive form of

contemporary direct selling organisation that is the focus of this book I have used

the term Value Direct Selling Organisation (VDSO).



6 The Hard Sell

Value Direct Selling Organisations

The range of organisations that constitute this category can, as noted, also trace

their origins and practices to the common ancestor of direct selling, the door-to-

door seller of the past. Moreover, these organisations are predominantly theinheritors of the branch office form of organisation referred to by Biggart (1989).

Value direct selling organisations are typically small to mid-range companiesengaged in selling high value consumer durables on a one-off basis.

In order to define Value Direct Selling Organisations as a distinct economic

practice it is necessary to address several conceptual difficulties. First, is it

justifiable to categorise the types of organisation I researched as direct selling

organisations, when they have been excluded from that definition by associations

characterised by that term? Second, what typical characteristics distinguish VDSOs

from NDSOs? Third, why might such organisations have been overlooked by those

large NDSOs, who, through the membership of their affiliate associations, appear to present themselves as encompassing all major categories of direct sales

organisations?

With respect to the first of these questions, it is necessary to consider the

criteria that are identified as definitive of direct selling. This will enable us to

identify the types of organisation that can plausibly be identified by that term.

The following description, provided by the Direct Selling Association (a world-

wide body wholly comprised solely of NDSOs), identifies characteristics of direct

selling thus:

What is direct selling?

Direct selling is a method of marketing and retailing consumer goods directlyto the consumer; it does not rely on direct mail, product advertising or fixedretail outlets. Independent sales people call on consumers, mainly in their

homes, to show and often to demonstrate products and to obtain orders. The

goods are then supplied by the company either directly to the consumer or through the sales person who obtained the order. Direct selling is suited to

high-quality household and personal products which can be conveniently

distributed by independent sales people. It is a method of marketing which is

particularly suited to products that benefit from detailed explanation or

demonstration or even being tried out by the customer. It is a personal

approach that is rarely found in high street retail shops.

Direct selling owes its continuing success to the thousands of people of all ages and in all walks of life who either want to be independent or to have

a business of their own where their personal rewards are a direct reflection of their own enterprise and efforts. It is particularly suited to people who wish to

work part-time, and because virtually no capital is required to start, there is

minimal risk involved. (The Direct Selling Association Ltd)

The DSA represents businesses with combined sales currently in excess of

£900 million and which account for almost 80 per cent of the total directsales of consumer goods in the UK. These businesses range from small

companies to large multi-national operation. (The Direct Selling Association)

(c) 1996–99 Biz/ed.



Introduction 7

The above description of direct selling is clearly consistent with the

organisations studied by Biggart. However, I will show that the key defining

features are also typical of the organisations I have referred to as VDSOs, despite

no companies from this sector being listed as Direct Selling Association members.

In accordance with the principles of direct selling, VDSOs are also concernedwith the demonstration, presentation and sale of goods directly to customers,

usually within their own homes, and on a face-to-face basis.The marketing strategies within this business sector, whereby companies make

initial overtures to prospective customers, tend to be fairly consistent across a wide

variety of product groups. Some VDSOs continue to market their products via the

door-to-door strategy, where sellers’ activity is divided between prospecting for

new customers and conducting sales appointments obtained from initial doorstep or

telephone canvassing. These functions are normally conducted at different times, in

that prospecting may be carried out during the day while appointments are

conducted in the evening. Sellers in VDSOs will rarely attempt to sell a productwithout arranging an appointment.

This division of activity is typical within this form of direct selling to the extent

that, more regularly in the majority of contemporary VDSOs, the functions of

marketing and selling are undertaken by different personnel within separate

departments of the organisation. There are a variety of reasons for this

specialisation of functions, and this will be more extensively discussed in the

following chapter. However, I would suggest that the central reason for such a

strategy is related to the type of products sold by VDSOs.

Key products within this market tend to be related to the home i.e. home

improvements (double-glazing, fitted kitchens, bedrooms, conservatories etc.),

home security products, time-share holidays and ancillary domestic products suchas orthopaedic beds. Recently there has also been a growth in direct sales

companies offering re-mortgages and other associated financial products, using the

marketing and selling strategies associated with VDSOs. Real estate sales can also

be included within the VDSO classification. As indicated, the companies in this

study sell home improvement products. Both are engaged in selling fitted kitchens

and bedrooms, while MHI also sells replacement windows and conservatories.

As described, the common feature of all products sold by VDSOs is that they

tend to be large, one-off purchases involving a considerable financial commitment

and, therefore, a serious decision on the part of the customer.1This factor is the

primary reason for the adoption of the specialist marketing/sales strategymentioned above and is important in understanding the particular form of direct

selling employed by VDSOs.

Initial contact is generally made through an unsolicited telephone or personal

call to a customer’s home or, in some instances, a personal approach may be made

within a store or shopping mall. The purpose of this initial contact is to find peoplewith at least a passing interest in the company’s product or service and arrange a

1 As a consequence of the privatisation and, thus, competition between energy utilities in the

UK, many of the new companies have adopted aspects of their marketing strategies from

VDSOs.



8 The Hard Sell

sales appointment. The canvasser will then try to arrange a free quotation for the

potential customer, normally via some sort of inducement such as a special offer,

sale price or the opportunity to receive a free product as a ‘prize’. Having gained a

potential client’s interest, the canvasser will attempt to arrange a specific time for

an advisor or consultant to call to demonstrate the company’s product or service atthe customer’s convenience.

The seller, in the course of the appointment, is required to convince thecustomer to make a substantial financial commitment in exchange for a product or

service where the customer’s prior interest may have been relatively casual. In

order to do this successfully the salesperson attempts to control the customer’s

responses via well-practised techniques, ranging from encouragement and friendly

persuasion to skilful manipulation and deception. Thus, it is the degree of

persuasion, and therefore selling skill, involved in value direct selling that has led

to the specialisation of tasks described above.

From this very brief description, despite some important distinctions, VDSOs,at least superficially, fit the definition of direct selling offered by the Direct Selling

Association. However, it is important to try to understand VDSOs exclusion from

recognition as direct selling organisations by the associations who present

themselves as the industry’s representatives.

I have attributed many of the distinctive features of VDSOs to the demands of

their particular product markets. I would suggest that this factor is also crucial to

understanding the division between VDSOs and NDSOs. Thus, the demands of

different product markets have led to the development of two qualitatively

distinctive forms of direct selling with different cultures and forms of organisation.

The more aggressive and adversarial type of selling that occurs in VDSOs has

generated an industry where sellers are predominantly full-time and male. Thiscontrasts with the part-time female seller more typically associated with the social

selling of NDSOs.

In addition, the consequences of different product markets can also be seen to

have influenced the size and structure of companies in each form of direct selling.

Curiously, in as much as it may conflict with common sense assumptions, the

‘amateur’ part-timers of the NDSOs are associates operating typically within

corporations where the major names in the industry are multi-national and, often,

global concerns. In contrast, VDSOs, with their ranks of ‘professional’ salespeople,

are for the most part relatively small to medium-sized businesses, with very few

achieving even national status. This situation can be understood with reference tothe differences in the ability to anticipate product demand in each sector.

Products offered by NDSOs are generally low-priced consumables. This type of

product market, therefore, affords some opportunities for re-selling to previous

customers. Companies operating in such conditions can entertain a degree of

optimism that demand and, therefore, the future prospects of a company, will bereasonably calculable in the long term. Such an outlook leads to confident

investment and planning for a relatively predictable future, creating the conditions

for the growth of large corporations.

Conversely, the product markets of VDSOs are characterised by uncertainty.

High priced durable products, often with a relatively finite demand, particularly in



Introduction 9

the home improvement sector, are sold to customers in a succession of one-off

deals. There is very little scope for repeat business. This creates a situation where

companies seek to maximise returns in the short term, often in highly lucrative and

competitive markets, but where future demand is relatively uncertain as saturation

is an ever-present possibility. This type of business environment is not conduciveto long-term planning or confidence in the future. The outlook is always precarious

and, hence, the investment of such companies in their infrastructure is alwayscontingent on meeting the requirements of a relatively short-term future.

In summary, NDSOs and VDSOs can identify a common ancestor, and both

types of organisation meet with the broad conditions that typify direct selling.

However, direct selling has yielded two distinct forms of organisation, largely due

to the circumstances described above. Furthermore, I would suggest that these

structural and organisational developments have evolved in tandem with divergent

cultures and identities, to the extent that neither contemporary form now recognises

the other as being involved in the same activity.The NDSO sector of the market, according to Biggart, exhibits a ‘feminine’

culture where selling and business are conducted in a caring, empathic and co-

operative environment (Biggart, 1989). By contrast, the male dominated VDSO

sector, as I will illustrate in this study, is viewed from both within and without the

industry as conforming to male stereotypes of competitiveness, aggression and

even ruthlessness. This latter factor, incidentally, may also have contributed to the

non-recognition of VDSO companies by the affiliative bodies who claim to

represent the direct selling industry, as the VDSO sector is often associated with

unscrupulous and shady practices in the public imagination.

Despite their lack of recognition, the prevalence of VDSOs can be illustrated by

a simple reference to telephone and business directories across many developednations. In particular, there are large concentrations of these organisations in

Western Europe and the United States. However, as I will argue throughout the

study, public and, indeed, academic knowledge of VDSOs is largely restricted to

advertising blurb and crude stereotypes. In the UK, VDSOs have been subject to a

number of sensational television documentaries, while a report by the UK Citizen’s

Advice Bureau in 2002 also focussed on the more outrageous practices of VDSOs

(Marks, 2002). Nonetheless, very little is known about what occurs within these,

often highly insular, organisations. As I will show this lack of public knowledge is,

in fact, the consequence of deliberate strategies engaged in by VDSOs.

James Foley’s production of Glengarry Glen Ross (1992) provides one of thefew publicly available insights into the secluded internal culture of VDSOs.

Foley’s film depicts a slice of life where machismo, aggression, deception, fierce

competition, manipulation and desperation constitute the unexceptional daily

experience of a group of Chicago real estate salesmen. The significance of this

film, for this research, lies in the way in which the peculiar hidden world it depicts,in terms of the practices, values and attitudes of its fictional inhabitants, so closely

mirrors my own observations. From this incidental encounter, and my own

experiences, I began to believe that the practices I observed in the field were

merely manifestations of a wider and significant social phenomenon, which



Table 1.1 A Comparative Typology of Retail and Direct Selling

Multiple Retailer (N)etwork DSOs (V)alue

Value of Goods Sold Predominantly Low

Mid/Some High

Low-Mid Value/Low

Commitment

High V

High Co

Pricing Fixed Fixed Negotia

Seller a

Sales Approach and

Level of Influence

Customer or Seller

Instigates Transaction –

Indirect Persuasion

Seller Instigates

Transaction – Low

Level Persuasion/

Peer Pressure

Seller In

Transac

Level o

PersuasDominant

Employment Form

Employment Agency/Self

Employment

Self Em

Remuneration of

Salespeople

Salary/Wage Commission Commi

Frequency of Sales per

Customer

Multiple/Repeated Multiple/Repeated Single/O

Site of Transaction Company Premises Customer or Seller’s

Home

Custom

Compan

Seller Profile* Full Time/Part Time

Female

Full Time/Part Time

Female

Full Tim

*This refers to the predominant characteristics of workers in each area.



Introduction 11

deliberately avoided public understanding as far as possible for its own ends. The

purpose of my research, then, is to understand the social processes encountered

behind the public presentation of an economic sphere whose inner reality is

intentionally obscured from view.

As identified in Table 1.1, VDSO direct sellers operate in an environmentwhere making a living is potentially highly precarious and requires a good deal of

pro-active persuasion on the part of the seller. There is normally no guaranteedincome, no reasonably predictable repeat business, nor a reliable pool of regular

clients. Moreover, each new potential customer must be persuaded to enter into a

substantial financial commitment, otherwise the seller – who is also responsible for

his or her own expenses – earns nothing. As will be explored in the following

chapters, the constant presence of insecurity, at least in part, goes some way to

explaining some of the tactics industry operatives engage in.

Documents

Hard Sell Intro