Avon has been experiencing big problems this past year, recording more sharp declines in the U.S. as well as several other markets. Avon is a beauty product retailer that, rather than setting up shop in grocery stores and malls, instead relies on sales reps to sell their products to consumers.
What’s the problem behind these weak sales? There were several origins of disruption, one being the difficulty of retaining a strong sales force — the company reported a further loss of active representatives in the fourth quarter. A loss of representatives can hurt this beauty company more than most, as it takes each representative time to build a client base.
According to Forbes, Avon plans to address the issue of a shrinking representative pool by providing their employees with more earning opportunities. One issue has been their global hiring system, which was spotty in the past year; this year, Avon plans on relying more heavily on online appointment recruitment, which is expected to account for 25% of future hires.
“When sales people voluntarily leave their job, especially one when they’re paid on commission, they’re leaving because they can’t make money in the role or at least enough money to justify their time,” explains Dane Reese, CEO of People Axiom. “The solution to that from the company standpoint is about recruiting the right talent, and giving them the tools to succeed where they can make enough. Recruiting sales talent is not for amateurs anymore.”
Other changes Avon plans to make include eliminating redundant products — multiple similar products were available at different price points, allowing customers to just choose the lower price each time. The company also has plans to move towards more demonstrations of what their product can do for clients, while cutting back on the traditional paper brochure.
Sources:
http://www.foxbusiness.com/industries/2014/02/13/avon-fourth-quarter-sales-fall-more-sales-reps-drop-out-1734170355/
http://www.forbes.com/sites/greatspeculations/2014/03/10/a-look-at-avons-plans-to-turnaround-its-ailing-north-american-division/