What Hyperlocal Startups Can Learn From Mary Kay | Street Fight

What Hyperlocal Startups Can Learn From Mary Kay

What Hyperlocal Startups Can Learn From Mary Kay

What comes to mind when you hear the name Mary Kay? Beauty products? Avon competitor? Or perhaps a yellow-tinged business model from the Tupperware era for “housewives” looking to make a little extra money, and willing to swallow the somewhat-uncomfortably-worded house rules and belief system.

Either way, if you’re looking to succeed in “local,” you ignore the wildly successful local mid-brow tastemaker at your peril.

In 1963, with just $5,000, Mary Kay Ash (and her son) eschewed popular wisdom and gave the middle finger (politely, I’m sure) to the men who used her on their way up the corporate ladder — and laid out these as core tenets of the company: “It was founded not on the competitive rule but on the Golden Rule – on praising people to success – and on the principle of placing faith first, family second and career third. It was a company, as Mary Kay Ash often said, ‘with heart.’ ”

Like a hammer sees everything as a nail, do I sometimes look at companies through hyperlocal glasses? Guilty! But if you don’t see the Mary Kay juggernaut as a roadmap for hyperlocal success you’re not paying attention.

Mary Kay is global, with $2.5 billion in sales. Scientists and chemists on staff actually develop much of the company’s own product, which is then sold through thousands of reps around the world. But it’s not the big numbers I care about. It’s the component parts. It’s about people on the ground, in your neighborhood connecting with others next door to sell a product. It’s as close as anything to the definition of hyperlocal.

To illustrate this, I located someone who not only sells Mary Kay product to people within her social radius, but who also has recently jumped to the new world of localized entrepreneurial selling through daily deals site Plum District.

Susannah Palik is a cleverly social seller, befriending people upon first meeting and without much effort she can change a discussion on baseball to a soft sell on a new base product for your wife. It’s what makes her and others at Mary Kay great at what they do. But equally important is how she does it.

The eight-year MK vet, mother of two young kids and wife to a busy lawyer, uses her social network (Facebook primarily) and her circle of flesh-and-blood friends in her town (Reston, VA) to deliver a constant feed of communication about everything and nothing: whatever topics her circle of friends/customers find interesting, they often do so because Susannah is there on a mobile device, laptop or phone updating them on what’s what. Mixed in there, quite naturally, is promotion of new products and reminders for refills. People rely on her for all this and know they can count on not missing a snippet of local news or a thing about beauty trends — at least those from Mary Kay.

Word of mouth is really the powerful thing with these businesses, and those are most frequently exchanged at the local or neighborhood level. Businesses or these hyperlocal services need to focus on that very closely in order to get people telling people and causing that ricochet effect.

I talked to Palik about her methods and how this model might be adoptable by other hyperlocal businesses, services, news sites and the like.

How do you keep customers engaged? Why do they return to you for products?
Our product sells itself, so once they are on the skin care they are hooked. I don’t need do do much to keep my customers who are on the product. The re-order business is somewhat self-sustaining because they love the product. My job is to make sure I’m there when they run low.

Tell me about outreach — do you visit people?
I visit people if they want to set up an appointment to try something. I also have people come to me, since I have products here and it saves me from having to lug everything around. I reach out virtually with every email by using my email signature file to promote the latest products.

How many regular customers do you have?
Hmmm, I would say about 50.  I get orders from more than that throughout the year, but in terms of reorders I would say 50ish. For Plum District I am just starting, so I’m on the first sales cycle.

How do you communicate with Mary Kay corporate, or them with you?
I really don’t talk to corporate at all. I have a director who has a unit of almost a hundred ladies.  She will send emails out periodically to let us know of upcoming events or meetings. But we aren’t required to go meetings.

How is your territory defined and by whom?
We don’t have territories in Mary Kay but Plum District is regionally based… I have Northern Virginia and Montgomery County in Maryland.

Do you have people working for you now? How are you compensated?
I don’t have anyone working for me.  We all have our own business with Mary Kay.  I have a team and I get a commission based on their sales.  But I don’t have any power to hire or fire anyone. Oh no, no salary at all.   We sell our product and make money from that. We pay $1 for the product and sell if for $2.  Can’t beat that really.

How do you and your team source new customers? Where do you look?
I find new customers through referrals and having parties. It’s a lot of fun to just get ladies together for a night out and to try skin care and make up.  So I get customers lots of ways. I also go to various local events and just set up a table to market my services. And if I’m at a local party or introduced to new people in a group setting I usually find a way to raise the benefits of my Mary Kay business.

How do you handle retention of new local customers? Say you send someone lipstick for the first time — what tactics do you use to make sure they are buying from you when they need lipstick again, or sooner?
I do have customers all over the country.  I mean, most of my customers are local but I can easily service folks all over the country.

But I totally think that Facebook helps with my Mary Kay business.  Mary Kay does have its own Facebook page that I can share on my page. But I can also put deals or sales on my page and it gets to tons of people rather than sending an email.  It’s easier to reach more people that way.

Plum District is a daily deals service “For moms. By moms.” It feels like this site is the tech-buzz-worthy version of Mary Kay, but not a competitor. Talk about how and why you took on Plum District as well?
Plum District and Mary Kay are very different but they also share some similarities. Plum District is a deals site and I sell advertising, basically.  I contact different businesses in the area to see if they are willing to do a deal to promote their business.

With Mary Kay, the business is often face to face, but with Plum District I can handle deals virtually or by cellphone alone. In fact the three deals I’ve done with Plum District I’ve not met any of the vendors. I guess it’s true that both require close connections to nearby businesses but Mary Kay is more human interaction.

How do you find yourself marketing  your services and securing deals on Plum District vs. Mary Kay?
Well, in terms of online vs. face to face I definitely think Plum District will continue to be successful as an online site.  I do call the businesses that I want to make a deal with and I negotiate deals with them.  I may never see them face to face but I do establish a relationship.  Mary Kay is well known and most people know that it’s a quality product.  So while I do face to face a lot, it’s not always necessary.  My website and online outreach helps with that.

Online and mobile hyperlocal businesses (Foursquare, Patch.com) have been challenged to find business models that work. What lessons or tips from Mary Kay would you pass on to people trying to engage the local community with a digital media product?
I get involved in many different things in the community and always raise my Mary Kay business to what I guess could be called my extended local network of friends and acquaintances.

The local Patch needs to be out in the community, visible — renting tables at events and so on. I would focus on a sort of local referral business where people can be incentivized for passing along awareness of the service. Word of mouth is really the powerful thing with these businesses — [that is] most frequently exchanged at the local or neighborhood level. Businesses or these hyperlocal services need to focus on that very closely in order to get people telling people and causing that ricochet effect.

Rick Robinson’s Turf Talk column appears every Wednesday on Street Fight.

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