Consumer and Sales Force Perceptions of Direct Selling: Is Conflict Inevitable?

Citation:

Marvin A. Jolson (1971) ,"Consumer and Sales Force Perceptions of Direct Selling: Is Conflict Inevitable?", in SV - Proceedings of the Second Annual Conference of the Association for Consumer Research, eds. David M. Gardner, College Park, MD : Association for Consumer Research, Pages: 175-185.

Proceedings of the Second Annual Conference of the Association for Consumer Research, 1971     Pages 175-185

CONSUMER AND SALES FORCE PERCEPTIONS OF DIRECT SELLING: IS CONFLICT INEVITABLE?

Marvin A. Jolson, University of Maryland

[The author wishes to thank Professor Victor P. Buell of the University of Massachusetts for his critical review of this manuscript.]

[Dr. Marvin A. Jolson is Assistant Professor of Marketing at the University of Maryland, former Senior Vice-President, Encyclopedia Britannica Inc. and a leading consultant to direct selling firms. He is the author of Consumer Attitudes Toward Direct-to-Home Marketing Systems (Dunellen Publishing Co., 1970) and Selected Quantitative Techniques for Marketing Decisions (to be published by Macmillan Co. 1972).]

When Victor Buell investigated door-to-door selling from the firm's point of view seventeen years ago, he concluded that a well formulated and carefully implemented direct-selling program offered an opportunity for the individual manufacturer to secure a special competitive advantage. [Victor P. Buell, "Door to Door Selling," Harvard Business Review (May-June 1954), pp. 113-123.] During the ensuing seventeen years, direct selling has progressed considerably in some directions and suffered setbacks in others. It would probably be unfair to say that the "direct" system of product distribution has flopped. But there is nevertheless a lurking suspicion that the present level of consumer/sales force conflict is both disruptive to economic performance and a threat to the survival of the method of distribution.

The causes of conflict in the channel of distribution comprise the beginning phase of conflict analysis. [Larry J. Rosenberg and Louis W. Stern, "Toward the Analysis of Conflict in Distribution Channels: A Descriptive Model," Journal of Marketing, 34 (October, 1970), p. 44.] Serious trouble indicators such as high sales force turnover rates and a rising rate of government prohibitive or restrictive legislation are salient symptoms of the causes of conflict in direct-to-consumer channels.

Management seeks to discover, understand, and hopefully satisfy the grievances of both consumers and sales force members without disturbing the advantages of the direct selling system. Therefore the design of this article is to summarize the pros and cons of direct selling as perceived by the key members of the channel system--the consumer and the direct salesman. Policy implications for the firm are discussed after a presentation and discussion of the basic findings.

The results and conclusions to follow are based largely upon a broader Baltimore study involving 200 consumers, 300 direct-to-home sales people, and 12 direct selling firms. [Marvin A. Jolson, Consumer Attitudes Toward Direct-to-Home Marketing Systems (New York: Dunellen Publishing Co.. 1970). pp. 65-82.]

CONSUMER COMPLAINTS

Disagreeable Connotation

The findings indicate that direct selling has a disagreeable connotation to many consumers; salesmen are perceived as trying to trick or influence people into buying what they do not need. Consumers resent aggressive "foot in the door" tactics, unsolicited phone contacts, and high pressure sales presentations. Consumers complain of "one call closes," non-cancelable binding contracts, invasion of privacy, and other conditions not normally encountered by customers who trade through conventional retail channels.

It is true that some direct salesmen who see a prospect only once will use high pressure tactics. Such a salesman is really interested only in the signed order and the resultant commission. Whether the customer actually needs the product or can afford it, or whether the product will perform as promised, is of little importance to this salesman. However, this offensive image fits only a small percentage of the nation's direct salesmen.

Upsets Rational Planning

It is probably more exact to say that the direct selling method upsets the consumer's rational planning and scheduling of his purchases. Many consumer purchases are essentially nonrationally determined. A need or needs exist of which the consumer may be conscious, but these are often reinforced by secondary needs of which he is only marginally conscious or totally unconscious.

The sight of an article, the salesman's description of it, and especially a presentation of what it will do for the buyer causes the consumer to invest it with attributes and properties, real or fancied which give it unusual value. The product may be said at this point to have "seduced" him. This is the point at which the consumer begins to discover that he likes the product and wants it. The procedure is analogous in many respects to the act of falling in love-and is equally irrational. [Robert N. McMurry, "The Mystique of Super Salesmanship," Harvard Business Review (March-April 1961), pp. 113-115.]

Invasion of Privacy

A prime difference between in-store and in-home buying is that the former method allows the consumer to buy at his own convenience at the seller's establishment. On the other hand, a large proportion of consumer contacts by direct selling firms involve uninvited phone calls and drop-ins. Often the consumer's written response to a magazine advertisement or direct maiL circularization results in the surprise visit of the salesman who often arrives without having telephoned for an appointment.

The present study's analysis of consumer receptivity toward several frequently used methods of prospecting and customer contact revealed strong significant differences. Consumers are most receptive to sales contacts that they initiate themselves and least receptive to drop-in canvass calls.

Profile of the Direct Salesman

In the eyes of the consumer, the role of the salesman in consummating (closing) the sale may be summarized as follows:

-- the salesman is the "procurer" who uses the product presentation to seduce the prospect so that the latter falls in love with it and wants to buy it.

-- the salesman provides logical justifications to his prospect for performing what would often impress others as an irrational act, e.g., the purchase of an article which the buyer appears neither to need nor to be able to afford.

-- It is the salesman who, when necessary, applies the pressure to effect a "close."

In effect, the buyer is objecting to a purchase at the seller's convenience rather than at the buyer's convenience.

The profile of the direct salesman as perceived by the consumer is shown in Figure 1.

FIGURE 1

PROFILE OF THE DIRECT SALESMAN AS PERCEIVED BY THE CONSUMER

THE CONSUMER'S PREFERENCE FOR IN-HOME BUYING

Despite the consumer criticism described in the previous section there are several reasons why consumers support the direct-to-home method of distribution

The Entire Family Can Be Consulted

Nearly 65 percent of the consumers sampled felt that a major advantage of direct selling is that all family members can inspect the product together so that a joint decision may be made. This is particularly important when higher priced items such as encyclopedias, storm windows, water softeners, vacuum cleaners, etc. are being marketed. The average housewife is reluctant to take full responsibility for spending two or three hundred dollars or more. Most direct sellers of expensive products deliver a majority of their sales presentations during evening hours or on weekends. The net result is shared responsibility for the buying decision and a minimization of regret. The findings indicated that jointly signed contracts generate significantly less buyer's remorse than situations where a husband or wife enters into a contractual agreement in the absence of his or her spouse.

The Consumer Requires Persuasion

Analysis of 490 purchase transactions indicated that 80 percent of the purchases would not have been made in the near future if a direct sales person had not made his unsolicited visit. Many consumers readily admitted that considerable persuasion took place but "they are now glad that the salesman talked them into making the Purchase."

Trying In Advance Of Buying

Approximately 45 percent of the consumers interviewed confirmed the advantage of trying out the product under actual conditions of use. For example, the prospect housewife can operate the vacuum cleaner on her own carpeting, the prospect's children can verify the readability of the reference library, or the blending of the silverware pattern with the prospect's home environment can be examined. The prospect often desires special services, advice and instructions about effective product use. Few people like the self-service principle for everything they buy. [Albert Haring, "Can Door to Door Selling Perk up your Profit Picture," Sales Management (October 21, 1960), p. 101.]

The Convenience and Comfort of In-Home Buying

There is a growing demand by millions of consumers for shopping facilities that will save time, effort, and expense. Suburbanites seek to eliminate driving time, parking fees, and babysitting costs. Also there is substantial evidence that in-store shoppers are demanding and not receiving the required level of courteous, personal, and intimate treatment by salesmen. [For example, see Gregory P. Stone, "City Shoppers and Urban Identification: Observations on the Social Psychology of City Life," American Journal of Sociology, 60 (1954), pp. 36-45 and Richard A. Smith, "The Ceiling on Selling," Fortune (August 1958). n. 91-92.] This is partially due to the presence of queues in busy stores, the lack of familiarity of retail clerks with the profusion of available products, and the absence of financial incentives for the in-store sales person.

On the other hand, the direct seller usually carries only one product or a limited line of products, and therefore is quite familiar with the features, benefits, and advantages of what he sells. There are no seller inflicted interruptions of the sales presentation and the usual result oriented compensation program motivates the seller to please the customer. As indicated by Figure l, the consumer perceives the direct seller as being polite and well trained.

NEGATIVE OBSERVATIONS BY SALESMEN

More than 85 percent of the consumer respondents indicated that they would not consider employment as a direct sales person. People reluctant to try direct selling and those who have suffered disappointing experiences as direct sellers have a number of objections to the method of distribution.

It is "Forcing" People to Buy Things They do Not Need

This observation is very much related to direct distribution's objective of upsetting the consumer's rational planning and scheduling of purchases. The following transactions are salient examples:

-- the 21 year old Washington, D.C. stewardess who purchased a double cemetery lot in suburban Maryland.

-- the 17 year old San Antonio high school senior who purchased a $200 set of waterless cookware although she lived with her parents and had no immediate intentions of marriage or relocation of her residence.

-- the Johnstown, Pa. newly married couple who purchased a $300 encyclopedia even though their apartment was completely devoid of furniture due to meager finances.

-- the Hibbing, Minnesota couple who contracted for $389 worth of storm windows even though they lived in an apartment and had no specific plans to move into their own home. [Marvin A. Jolson, "Cooling off the Direct-to-Home Seller," Business and Economic Dimensions (February 1971), pp. 8-9.]

All of the above customers regretted their purchases and attempted to cancel their contractual agreements.

It is Frustrating and Too Prostituting

A certain amount of door-to-door canvassing (cold turkey) is required depending upon the lead system of the company. Field sales positions have the disadvantage of being lonely. The representative must frequently work by himself without the supportive presence of an associate or supervisor.

The salesman is often in an inferior status position vis-a-vis his prospect. He must be willing to accept rudeness and rebuffs as a matter of course. In many instances the salesman sees himself as the perpetual introducer, forcing himself on people and into homes where he is not only unwelcome, but often actively resented. [McMurry, op. cit., p. 116.]

The Frequency of Rejection is High

Consumers may resist the salesman on three separate levels--at the door, just preceding or during the sales presentation, and after the price is quoted. Put another way, the prospect may have as many as three decisions to make:

-- Will I admit this sales person to my home?

-- Will I listen to his story?

-- Will I buy his Product or service?

For example, an encyclopedia salesman may be required to approach ten doors before being admitted. Once admitted he may be allowed to complete only one of three attempted presentations. Once the presentation is completed, he may convert only one of six completed presentations into a sale. Therefore, the salesman may suffer 179 turndowns in order to acquire one sale.

No one without a well defined capacity to take punishment can tolerate such activity on a continuous basis. [Ibid.]

The rejection ratio is considerably lower when less expensive products such as cosmetics, brushes, detergents, etc. are being marketed.

There is No Security of Earnings

The impact of 179 "no's" in exchange for each "yes" is especially tortuous when the salesman's earnings are totally tied to sales. There are two undesirable effects of a straight commission plan: one is the actual low earnings when sales are scarce; the other is the anticipated nonuniformity of earnings. The first causes terminations; the second causes both terminations and a reluctance to even seek a career in direct selling.

Many salesmen, both inexperienced and experienced have a tendency to magnify out of all proportion the potential penalties or fears which a straight commission situation presents.

Several examples were offered by respondent sales force members. Jim S. refused employment because he recalled a friend who failed on a straight commission basis. Bill T. decided to "try" a commissioned job. After three non-productive days his fears were reinforced. George J. did well on straight commissions; however, he resigned because of fears that "some day" he would stop producing.

Unethical Conduct is Required

There is little doubt that the present level of consumer stigma and increasing legislative interest in protecting the consumer from the door-to-door salesman has painted direct-to-home distribution a dubious color. Some of the charges are justified; others are not. Most direct sales people are trained by their firm to transmit only true, correct statements to the consumer. Yet, there are some sales people who, in the interest of more sales and increased commissions, intentionally convey untruths to the prospective customer. Unfortunately, the findings indicate that some direct selling firms train their representatives to misrepresent.

As a result, public condemnation of the direct selling method has done much to tag this distribution system with a label of rascality. Potential career salesmen are concerned therefore with a perceived lack of status, dignity, ethics, and prestige.

Selling Must Take Place at the Prospect's Convenience

Direct selling is not ordinarily a five day a week, eight hours a day job. The present findings have disclosed several advantages to the direct seller of delivering the sales presentation when husband and wife are both present. Husbands are significantly more at ease, more patient, and more willing to listen to a sales presentation than their wives.

Consequently, companies are increasing their frequency of evening and weekend calls. The preference of the prospect for joint decision opportunities has already been discussed. The firm also benefits by the requirement for fewer call-backs and a resultant reduced probability of cancellation under the cool-off option. [The most common form of direct sales regulation requires a cool-off clause in the sales agreement which allows the customer to cancel his commitment within 24 to 96 hours following the signing of the contract. To date, cool-off statutes have been enacted in 22 states and others are following suit. For detailed descriptions of cool-off legislation see Orville C. Walker Jr. and Neil M. Ford, "Can Cooling-Off Laws Really Protect the Consumer," Journal of Marketing 34 (April 1970), pp. 53-58 and Jolson, op. cit. "Cooling-Off the Direct-to-Home Seller" pp. 7-17.]

Despite the reported advantages of adjusting the salesman's schedule to include the husband, the requirement for evening and weekend sales activities imposes an irregular hour burden upon the sales person. Such a need may adversely affect the very living pattern that motivates his productivity.

A Combination of HyPnotism and Jujitsu

The person with little or no successful experiences in direct selling often has some weird notions about "in-home" selling. He has generally heard about "getting in" and "closing" techniques and the chances are he thinks these processes require some kind of black art combining both hypnotism and jujitsu by means of which a salesman, combining guileful and violent methods, makes prospects buy something they do not want.

THE SUCCESSFUL SALESMAN SEES ADVANTAGES

There is, however, much evidence to prove that the image of today's direct salesman is far different from the kind of sellers once described as men of "glittering eye and well-oiled tongue," each with a "large and heavy foot which he was ready to wedge into a doorway." Those old-time agents of an earlier era, bold and truculent, often carried samples slung from a harness under their coats. They were primarily wanderers who swept into a city or neighborhood, turned a quick profit, and moved away swiftly and silently. They preyed on ignorance and often charged prices three to four times the physical or intellectual value of the Product.

Even after the ranks of such agents had thinned, there still continued to be certain shady practices in the still muddy channel of direct distribution. With reason, prospects were wary of anyone who announced that he had come to bring benefits to their households. But as time passed, people grew wiser and less susceptible to chicanery and sophistry. When consumers were not alert, various governmental agencies and Better Business Bureaus were. [Herman Kogan, The Great E.B. (Chicago: University of ChicaRo Press, 1958), pp. 300-302.]

As previously hinted, consumer/salesman conflict and buyer dissonance are greatly decreased when low ticket purchases are involved. Recent studies by Haring of over 15000 direct-to-home sales people disclose that 80 per cent of the respondents reported that three-fourths or more of the prospects contacted received the sales person in a courteous and friendly manner and seemed to welcome his call. However over 6500 of these people sold Avon Products averaging under ten dollars per sale. [As reported by Professor Albert Haring during his testimony before the U.S. Congress, Senate, Consumer Subcommittee of the Committee on Commerce, Hearings on Senate Bill Number 1599, Door-to-Door Sales Regulations, Ninetieth Congress, Second Session, March 4, 5, 20, and 21, 1968, pp. 173-177.] Thus the intensity of the problem area is not identical for all direct sellers

Regardless of product price today's successful direct salesman sees himself as an ethical businessman who fulfills an important need in America's marketing system. Moreover, he visualizes a number of advantages over the salesman who operates in more conventional channels.

Few Qualifications For Entry

Direct selling requires only good character and a willingness to roll up one's sleeves and work. Age, sex, race, lack of education or experience, and time availability are not barriers.

Flexible Hours

The direct salesman may work as many or as few hours as he wishes with income tied only to productivity.

Rewards for Productivity

The average income of the direct salesman is similar to that of most other salesmen. However, the median mid-point income is low, probably caused by the high proportion of part-time direct sales people.

But hidden within the mass of data are income phenomena which are seldom enjoyed by sales people who sell in other channels. A company in the home security field which primarily recruits salesmen under 25 years of age, reported 28 earners in excess of $30,000 in 1970. Another firm in the cookware industry tells of three salesmen who entered the company in 1968 from nonselling positions and each in his first year of direct selling surpassed $40,000 in net earnings. A national cosmetics sales organization, which relies heavily upon female representatives, reported that more than 300 of its sales ladies bettered the $20,000 personal earnings mark in 1969. An international publisher whose sales volume rises substantially during the summer season points with pride to more than 150 college students who netted incomes of more than $2500 during a single summer.

Advancement Potential

The successful salesman finds that advancement to a supervisory position is rapid and extremely rewarding. The field sales manager receives a commission or overwrite on the sales turned in by his six or eight assigned salesmen. The branch or district manager profits on all orders in a city or state. The regional manager typically receives compensation on all volume in a multi-state territory. The product division sales manager may receive a substantial salary, an overwrite on every sale in the nation as well as bonuses and stock options adding up to sizeable financial rewards. Six figure incomes for direct-to-home sales executives (who are not corporate officers) are frequentlY observed.

CONCLUSIONS AND POLICY IMPLICATIONS

The purpose of this article has been to examine the current state of in-home selling from both positive and negative viewpoints. The positive views may help to explain the magnetic lure of direct selling which is continuously attracting many new comPanieS into the field.

The negative views place consumer/sales force conflict problems in perspective for management and also identify certain consumer/company and sales force/company forms of conflict.

Recruitment and Retention

As a result of the reported negative perceptions by consumers and/or potential employees, "selling the job" is often more difficult than "selling the Product."

While emphasizing the recruiting function, the firm's management often neglects the basic indoctrination, continuous training, sales planning, and sales force control systems that are essential for manpower retention. High consumer rejection frequencies, low earnings by the salesman, and harassment by local municipalities and federal authorities all contribute to a manpower turnover rate that quite often exceeds 500 percent annually. The interrelationships among these factors are shown in Figure 2.

FIGURE 2

BLOCK DIAGRAM SHOWING INTERRELATIONSHIP OF PROBLEM AREAS FACING DIRECT SELLING FIRMS

Ideas For Progress

It is predicted that consumer and corporate interests will become more compatible. Acceptance of some of the following suggestions may quicken the process. [Several of the following suggestions were discussed at the National Roundtable Seminar on Direct Selling, October 8-10, 1970 at Vail, Colorado.]

1. Direct selling leaders should initiate an educational program directed at consumers, government officials, the Better Business Bureau, news media, and university students and faculty members. The thrust of these communications should be upon the benefits of direct marketing to consumers and the overall economy.

2. An accrediting organization consisting of industry leaders working in conjunction with selected consumer agencies should be established for the purpose of developing, promoting, and controlling a code of ethics and standards of operations acceptable to all parties concerned.

3. Companies marketing higher priced packages should initiate a postsale system of verifying the sales transaction with the new customer with the purpose of uncovering misunderstanding, complaints, or buyer's remorse. The order should not be processed until after any customer grievances have been settled.

4. Sales calls of new or questionable sales people should be monitored and offenders should be corrected or terminated.

5. Companies should install a more rigorous, more objective sales personnel selection system especially by use of a thorough system of checking the applicant's character and past employment record.

6. Compatible with the above suggestions, research must be undertaken constantly for the purpose of uncovering newly developed attitudes of consumers and present or former sales force members, to combat ignorance and prejudice, and to generally provide a sounder base for policy decisions. Proper organization requires a total integration and coordination of all the factors that can influence the final sale.

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