This weekend, I was talking to a friend who works in the marketing technology space about potential blog post topics for my social media class. I was trying to subtly convince him to let me interview him for my post, but things quickly took a sharp left turn.
“Erin, you know what I would want to write about? SOCIAL MEDIA PYRAMID SCHEMES. If I see one more post about Body by Vi or Tupperware, I’m going to start blocking people.”
…yes, folks, Tupperware somehow just got put in the “pyramid scheme” category.
While I wasn’t immediately inspired to write about the evils of Tupperware (primarily because it seems like a pretty great company to me), my friend’s comment did make me think about a company that seems to have recently taken over my Newsfeed: Rodan and Fields.
Rodan and Fields was created by Dr. Katie Rodan and Dr. Kathy Fields, who also created Proactiv. The company partners with “independent business owners” (read: women in my Facebook Newsfeed) who sell Rodan and Fields’ wide variety of skincare products, ranging from acne treatments to anti-aging formulas. Drs. Rodan and Fields founded their company in 2002 as a brand to be sold in high-end department stores, but made an unprecedented move by pulling their product out of retail outlets in favor of a pure direct-selling strategy in 2008. The company brought in more than $300 million of revenue in 2014 and entered the Canadian market earlier this year, so Rodan and Fields seems poised for continued growth over the next several years.
Based on my personal experience, it seems that Rodan and Fields consultants rely heavily on social media for sales. Each consultant posts status updates with a custom URL to her personal store, where friends can order their skincare products to be shipped directly to their doors. Each post has at least a few “likes” and comments, which seem to be primarily from other Rodan and Fields consultants. This is a strength of the Rodan and Fields marketing strategy. Posts with likes and comments are much more likely to be selected by Facebook’s algorithm to appear in users’ Newsfeeds, so any engagement (even if it’s from other R&F consultants) increases Rodan and Fields’ social visibility.
Rodan and Fields has essentially taken the idea of the traditional “Tupperware party” and brought it to social media. Rather than inviting friends and family to your home at a given time, social media and custom sales pages allow consultants to sell products anytime potential buyers are online. This model combines the strengths of direct sales with the flexibility of ecommerce, so it makes perfect sense that Rodan and Fields has been wildly successful thus far.
Now, the million dollar question: Is Rodan and Fields a pyramid scheme? Short answer: Not yet.
Long answer: Rodan and Fields’ is structured as a multilevel marketing company, where consultants are paid a commission based on what they sell, and then they receive compensation for items sold by any consultants who they have recruited into the firm. It is easy to see that this model puts a strong emphasis on recruitment, and has the potential to eventually push the firm over the line into clear “pyramid scheme” territory. However, given the amount of attention being paid to Rodan and Fields by traditional media, online media, and even the celebrity community (Miley Cyrus’ mom, Trish, is an R&F consultant), Rodan and Fields management has a strong incentive to pay close attention to any erosion of the firm’s structural integrity.
After further reflection, it seems that most of the women posting about Rodan and Fields in my Newsfeed are from the Southeast. Have you seen many Rodan and Fields posts from New Englanders? Or have you considered joining Rodan and Fields as a consultant?