Avon: The difficult transition from “Ding-Dong” to “Dot-Com”

by in Marketing

door-wooden-bell-old-largeDavid H. McConnell can be aptly considered an unsung hero. You’ve probably never heard his name, yet McConnell played a pivotal role in the evolution of sales – especially for women. In 1886, when only about 20% of women worked outside the home (and most who did held industrial-related jobs), McConnell spawned a then-revolutionary new career path for females. Then a door-to-door perfume salesman, he was concerned that his male sales reps were employing high-pressure sales tactics that failed to resonate with his female clientele. He believed that females, often armed with close social networks of neighborhood friends, would be better able to engender trust among prospect perfume customers (most of whom were women). He was right: The California Perfume Company (now Avon) quickly rose to become one of the most prosperous beauty brands.

Unfortunately, Avon’s prosperity began to stagnate as it entered the digital age and it continued to rely heavily on door-to-door sales. In 2014, Avon saw its revenue fall 18%, representing an abysmal half of 2007 revenue. Sanford C Bernstein analyst, Ali Dibadj, voiced his concerns: “Avon needs to do something big.”

And “something big” Avon did indeed. Specifically, it developed a digital strategy that incorporates three critical foundational pillars. Collectively, these pillars have helped Avon capitalize on the potential of digital and transform its sales reps into online social sellers.

Pillar 1: Creating a digital platform

Any effective digital strategy must start with a platform. This platform should serve as a central hub to engage with customers – a digital “home base.” Once the platform has been built, various pieces can be layered atop it. For Avon, like most companies, its platform is its website, which it revamped in Oct. 2014. Importantly, the re-design included an e-commerce platform, which has helped facilitate an easier and faster shopping experience for customers. The platform also enables visitors to “Find a Representative” who can assist them with their purchasing decisions.

After the platform was built, Avon slowly layered rich digital content on top of it, including how-to makeup videos, tips and tricks from Avon experts, a virtual makeover tool, and product ratings and reviews. Avon has even tested the augmented reality waters. In June 2016 it announced “Avon’s Magic Mirror,” a facial tracking and rendering tool that allows customers to virtually try on makeup products via their smartphone devices, in turn allowing them to visualize products prior to purchase.

Pillar 2: Offering incentives for online sales

As it embarked on the digital era, Avon found itself in a predicament. On one hand, its sales reps were, by and large, more accustomed to the company’s traditional mode of selling – door-to-door sales. On the other hand, the potential of online sales loomed large: 72.6% of salespeople who employ social selling exceed quota 23% more often than their peers. Avon desperately needed to incentivize reps to enter the digital era and generate online sale – and fast.

To tackle the challenge at hand, Avon took several proactive measures. First, it created several resources to teach sales reps how to leverage the digital platform it had built. Training was essential: 93% of sales executives have not received any formal training on social selling. Avon reps are able to register for online training courses. They also have access to a series of resources that teach them how to effectively share website content with customers. New reps are even paired with existing reps and receive peer-to-peer support. When I expressed interest in becoming a rep, I was immediately contacted by an existing rep who offered to connect with me via email, phone, or text and help answer any questions. In aggregate, these resources help instill confidence among reps that they can reap the potential rewards of online selling. This, in turn, mentally incentivizes them to transition from a door-to-door sales M.O. to a digital one.

In addition to training, Avon also monetarily incentives sales reps to sell online. Reps earn up to a 50% commission on online sales. As well, reps aren’t encumbered by a sales quota and, unlike door-to-door reps, don’t need to purchase inventory.

Pillar 3: Empowering reps through customization

No customer is the same. Each customer has different preferences, budgets, concerns, etc. Effective sales reps invest the time necessary to learning about the intricacies of each of their customers. This enables reps to better engender trust and craft more compelling arguments that are most likely to resonate with customers. According to Shawnna Sumaoang, Director of Marketing at Highspot, customization is a “best practices used by top performing sales reps….any sales rep who wants to meet their numbers is going to take the standard sales presentation and enhance it to customize for their customer.”

Sales reps often find customization easier accomplished during offline sales interactions such as during phone conversations, in-person meetings, and product demos. It’s relatively easy to highlight particular features, emphasize certain value propositions, and so on according to customer preferences using speech.

In the digital world, customization can be more challenging. Nevertheless, as Avon has demonstrated, a highly customizable online sales environment can be created. Avon, for example, provides each of its sales reps with a unique url that enables them to build and customize their own Avon-branded site. There is no cost involved. Reps are given the liberty to customize the look and feel of their site and even add a personal blog if they wish. This high degree of customizability empowers reps to generate a digital experience that better resonates with their specific customer base. This ultimately gives them greater ownership over digital sales.

Carl Mogridge, former Head of Digital at Avon has described Avon’s journey as a shift from “ding-dong” to “dot-com”. The beauty mogul recognized the need to transition to the digital world (Avon has estimated that it saves $1-3 for every U.S. order processed via its website). And it appreciated that an effective transition could not be made possible without the undergird of its human sales reps (97% of all online purchasers want to interact with a human sales rep).

The journey to digital has certainly not been without challenges and low points. For the first time in a long time, however, things are looking up for Avon. In August, analysts began to turn heads when the company’s shares increased 40%. While its future remains anything but certain, Avon has laid the groundwork to enable it to capitalize on the new digital world: it has built an effective platform that incentivizes digital sales and empowers sales reps to generate highly customizable experiences for customers. Only time will tell whether prolonged good fortune comes knocking on Avon’s door.



About The Author

Rebecca Hinds
Rebecca Hinds - View more articles

Rebecca Hinds graduated from Stanford University in 2014 with a M.S. in Management Science and Engineering. In 2013, Rebecca co-founded Stratio, a semi-conductor company developing infrared sensors. The company was selected by the Kairos Society as one of the 50 most innovative student-run businesses in the world.