Opportunity Knocks for Avon, Mary Kay

Growing Army of the Self-Employed May Lead to Higher Sales for Both

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YORK, Pa. (AdAge.com) -- Avon's calling -- and a lot more people are answering.

As employment falls, the ranks of at-home sales reps are swelling for cosmetics marketers Avon and Mary Kay. In fact, sales are holding up well for the recession-resistant direct-selling business. According to Amy Robinson, VP-communications for the Direct Selling Association, historically during nonrecession years, the gross domestic product increases about 3.3% and direct sales increase 3.6%. But during a recession, GDP has gone up on average just 0.8%, while direct sales increased 4.5%. Figures for 2008 aren't available yet, but anecdotally that seems to be true this time as well. "People don't stop spending; they just spend differently," Ms. Robinson said.

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In fact, people staying at home more can translate to more in-home parties, an opportunity for door knockers peddling personal-care products, which make up 27.5% of the total industry. Both Mary Kay and Avon are seizing on the trend, figuring more sales representatives will equate to more sales.

After CEO Andrea Jung appeared on "Good Morning America" about six months ago, the phones "lit up like we'd never seen before," said Geralyn Breig, president of Avon North America. Obviously people were interested in the potential of selling Avon, and it was up to the company to "be loud about the fact that Avon could be an opportunity," she said.

The push has included a pre-game Super Bowl 30-second ad featuring real Avon reps talking about their jobs. Tapping economic themes, the reps comments include: "It's just a great way to earn extra money" and "I can't get fired. I can't get laid off. It's my business." A similar 60-second spot that began in late March got almost as many calls as the Super Bowl ad, Ms. Breig said, and online lead generation is up 92% year over year in inquiries about becoming a representative.

'Boldest recruiting drive'
"We've applied a 360-degree integrated approach to our recruiting marketing, the same way we would market a beauty product," Ms. Breig said. "We've always done recruiting, but it wasn't done in the same way. It's our boldest recruiting drive ever."

Avon would not disclose how many new reps the campaign has drawn, but according to its public filings, number of "active representatives" increased 7% in 2008, and revenue rose 8% to $10.7 billion.

Mary Kay's new push is also a first for the privately held company. In fact, "Opportunity" is the first TV recruiting campaign in the 46-year-old company's history. The ad features stylish, independent women with a voice-over that intones: "Discover a part-time choice that can lead to independence. ... Earn extra money. Be your own boss. Need this now? Discover for yourself at MaryKay.com."

The ad, with a 25-to-34-year-old-female target, began in early March and, along with a revamped online site and rep promotions, resulted in a 108% increase in visits to the "Sell Mary Kay" section of its website in the first three days. With the success, Mary Kay has extended its $100 incentive program for new reps into April. The company does not disclose sales, but Chief Marketing Officer Rhonda Shasteen said Mary Kay posted a "record year" in 2008.

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