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2 Jul, 2007 05:47

Pushing the hard sell in Russia

Russia's direct sales market is worth around $US 2 BLN. Millions of Russians work in the sector, selling goods for companies to earn extra cash.

Some firms reward their salespeople with a bonus at the end of each month, making it a frantic time to boost sales.

Such sales staff do not wait for customers to find them. They go out with their products in search of clients. Around 2.5 million people in Russia work in the direct sales industry.

“When a customer asks you: Have you used this product? What was the result? And you say – I washed out all the stains, the result was super! Then people listen to you. When they start using the product, they see the same result – this is where communication starts,” said one direct saleswoman, revealing the secret of winning customer loyalty.

“I always call my customers, ask how they're doing and invite them to training classes. It’s easier to work as a team,” adds another saleswoman.

Russia's Direct Sales Association has created a code of ethics to boost customer confidence, amid concerns that not everyone's convinced by business practices in the sector.

“Under Russian legislation, it is impossible to exchange or to get your money back for a product you do not like.  If you have this problem with the Russian DSA (Direct Sales Association) member, you can always return the product and get your money back,” explained Tamara Shokareva, the President of the Direct Sales Association.

Almost half of all direct salespeople in Russia work full-time, compared with 20 % in the EU and even fewer in the U.S.

The Direct Sales Association believes many Russians see this as an opportunity to learn business skills they lack, in a country where a relatively tiny number of small and medium-sized enterprises exist.

Amway is one player already established in Russia – the fourth largest direct sales market in Europe. But the U.S. giant is still facing problems moving forward.

“It's mainly the very bureaucratic environment. The state needs time to establish a legal environment, a financial environment,” said Leszek Krecielewski, General Manager of Amway Russia.

Many direct sales companies also face unreliable postal services and an underdeveloped banking system. Once these improve, there may be scope to offer a more diverse range of products in an increasingly consumer-driven Russian economy.