Avon: ‘The Human Element is Crucial’

Online shopping has made everything convenient for consumers, but it’s still a hit or miss for many transactions. Like when I bought a beginner’s drone on a popular online site. I read the reviews and watched demos on YouTube and it looked good. What I got instead was a fake (but priced like the original). It was like I threw P7,000 to the wind — on a drone that wouldn’t fly properly.

The site disavows any responsibility for such situations. You’ve been duped — your fault, deal with it, there’s no one to complain to or hand over a replacement. 

Some products you really have to see for yourself — like a drone, like makeup, lotion and lipsticks that you test on your skin.

One hundred and thirty years ago, the first Avon representatives knocked on doors to sell their products. Today, this method of direct selling is very much alive. Avon has used technology for ordering online, but only to help their representatives with their customers.

The human contact that many sellers and buyers have dismissed, Avon sees as crucial in today’s world.

Avon’s new global president Miguel Fernandez was in Manila last week to visit and review markets in Asia Pacific. He mulls over the relevance of direct selling and says, “We want our reps to provide a service because that’s something only humans can do. That’s our power. That’s why we’re going to be successful everywhere in the world. There may be companies that are efficient in delivering products, but they don’t deliver the human touch.”

It’s part of Miguel’s personality to look for the value in humanity in every job. He was a Wall Street financial analyst in his 20s, becoming successful at buying and selling companies across the globe, but he felt there was something missing.

“It was a financially driven type of operation. I felt I wasn’t contributing to society, to the communities I was living in. I thought to myself, you owe it to the world to contribute to people. I wanted to be part of something that would change lives.”

So he went to direct selling, first at Herbalife, where he handled the business in the western hemisphere from Chile to Canada, and six months ago he joined Avon in its London headquarters (the North America business was sold to a private equity two years ago).

“Anyone that joins the direct-selling industry wants to come to Avon because this is the best and the brightest,” he says. “It’s like if you’re a soccer player, you want to play for Real Madrid or Barcelona. That’s Avon for us in the business.”

THE PHILIPPINE STAR: What is the big picture for Avon in 2018?

MIGUEL FERNANDEZ: 2018 is going to be one of our key years. As you know, we faced some financial performance issues and now we’re in the middle of turning around the company. This year, we’re going to have a new CEO and it’s going to be one of those years that’s going to be remembered as a turnaround year.

When did this transformation start?

Almost two years ago. It required different things in different parts of the world. The Philippines is great, it’s No. 4 globally and it’s one of our best markets; we don’t want to touch it. Brazil is No. 1 but we have a lot of challenges there, whereas the Philippines doesn’t need any fixing. Our second market is Mexico, where we also need to change fundamental things in the company so we can continue to grow profitably. As a global company we need to focus and make some changes in certain markets.

Are these changes in management, strategy or products?

It’s more strategy. We believe we have the right management and we’re very happy with the products. We have a very efficient R&D organization. We need to make sure that the reps make enough money so she or he can continue to stay with us. The challenges we’re facing in those countries is that we have some reps that join us, sell products and make money, but not enough for them to do it all over again and again. If we increase the price of the products, they’ll make more money but this will obviously cost us. The trick is to create a product so we can price it right and the customer would still buy it. For that, the rep has to provide a service, she has to become a beauty adviser, so that’s where we need to change.

But that’s essentially what Filipino reps are doing now, isn’t it?

Yes, they’re doing it great.

They might be even providing love life advice, not just beauty advice.

That might very well be (laughs). I wouldn’t be surprised if we take the practices in the Philippines to other markets; they’ve been great at balancing the value proposition for the rep, for the customers and us.

Do you think the human element is still important to consumers?

Very important. More so in beauty — for someone to tell you, “Don’t buy this one because the color is wrong for you.” That content we need to provide to the rep so they can pass it on to their customers, to empower them to add value to the transaction. It has to have a human element; otherwise, it’s just a transaction. We’re not going to be one of those companies where you just pay and then we deliver your products; for us, we need to know you as customers and then we’ll create a whole plan for you.

Avon touts itself as a company for and about women; what’s it like for you as a male working with women and producing products for women?

I can work with pretty much anyone and I love working with women. It’s been well documented that men get paid more than women — but absolutely not in Avon. This is a merit type of organization. You do better; you get paid better. I love being part of that. I have two kids — two little boys — and they asked me, “Are they going to love you there?” I said, absolutely. 

Faith Fernandez-Mondejar, Avon’s director of communications for the Philippines and Asia Pacific: “This is a legitimate opportunity. We don’t require anyone to have credentials as long as they’re willing to put in the hard work.”

In your six months in Avon, what kind of stories have you heard from Avon reps?

In Brazil, this lady was telling us that she could afford only one liter of milk every day and she has three kids. So she would distribute it between the kids and she would put a little milk in her glass and add water to it. The kids would ask her, “How come your milk is always lighter than ours?” And she’d say, “That’s the way I like it.” But through Avon, she has built a good income. And she said the best day of her life was when she could afford to buy more than a liter and have a glass of milk for herself, too. That broke my heart. We have thousands and thousands of stories about the lives we’ve helped change. To be part of that is unbelievable.

Is there a point when the market gets saturated? (There are six million Avon reps worldwide.)

Once we run out of poverty in the world, that’s when it’s saturated.

A past Avon Philippines president once told me that when the economy is down, beauty product sales spike up.

FAITH FERNANDEZ MONDEJAR (director of communications for the Philippines and Asia Pacific): We’re providing earning opportunities so the reps work harder because they want a source of income. But also, there’s hope that we bring. After typhoon Yolanda in 2013, the teachers were looking for lipsticks because, they said, when their students see them wearing lipstick, they feel that things are back to normal and it’s going to be okay. So Avon partnered with DepEd and donated lipsticks to teachers. Same with the war in Mindanao, the teachers specifically asked for lipsticks — it’s a symbol of hope for them. 

Miguel, is there part of the business you specifically want to grow?

I want to grow everything. I know exactly what the products are and I love them, but I think more about the reps and changing their lives. The report I keep asking for is one that shows me how many people have leveled up. It’s a business indicator but it’s also a human indicator. That’s the success of our brand. I want more people, more women in the company. We’re resistant against crisis. When people run out of jobs, this is a legitimate opportunity. We don’t require anyone to have credentials as long as they’re willing to put in the hard work. 

What advocacies of Avon would you like to push further?

The one that’s very close to our business is giving women economic independence because it also means independence from a situation they don’t want to be in. In my personal life, we’ve faced certain issues with breast cancer, so I want us to be the front leader to push for self-checking because early detection means saving lives. Those two are very close to my heart.  

What is the strongest product category globally?

It’s what we call “Color” — the makeup line. In Central Europe, we’re strong in fragrances; in Brazil it’s Color; in the Philippines Avon leads in Color, Fragrance, Hand and Body Lotion and Intimate Apparel.  In Mexico, we’re the largest seller of pots and pans.

What Avon products would we find in your house?

My wife became a rep about a couple of months ago. The person that manages the UK, he gets an email every three weeks. If you go to my house, there’s a bazillion products of Avon and there’s just four of us in the house. I ask my wife, how many times do you want me to put on fragrance or take a shower? Every three weeks, she’d order a big new box.

What is the percentage of male representatives?

In the Philippines, 20 to 30 percent are male, with two top sellers. I remember in our business in Romania, the top seller was male.

He must be very handsome. 

Well, that I cannot tell (laughs).

Are there new businesses you’re looking at?

Yes, and it’s going to be a great surprise.

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If you don’t have an Avon rep, visit www.avon.ph. Follow or like Avon Philippines on Facebook.

Visit the author’s travel blog at www.findingmyway.net. Follow her on Instagram and Twitter @iamtanyalara.