Made to Measure: J.Hilburn Gives Direct Selling Some Style
How does that matter? To put it in Davis-style terms, J.Hilburn will be able to scale personalization. That means e-mail updates with smart product recommendations--simple things like matching ties for your shirts, but also more sophisticated picks based on unexpected correlations. For instance, if most people in Minneapolis who buy V-neck sweaters and striped shirts also buy sports coats, anyone there who bought a V-neck sweater and a striped shirt but hasn't yet bought a sports coat should get an e-mail that recommends a specific sports coat, made to his precise measurements--and he can simply click to buy.
The opportunity lies not just in e-mails, of course. Via the app, J.Hilburn will be able to keep an invisible hand in the in-person interaction between client and salesperson, to help push up order size. On the website, what each customer sees will be unique to his history, much as on Amazon or Netflix but based on data that's quite a bit more personal. And because J.Hilburn gives sales reps the same commission for online transactions as it does for in-person ones (even if the rep had no part in the sale), there's no risk of eroding commissions and driving the sales force away. In fact, J.Hilburn wants to drive reorders to its digital channel, because it means the reps have more time to scout for new customers.
The products themselves are getting a data-driven makeover, too: "The next evolution is, we could have a dozen variations of the size Small for our ready-to-wear collection," Davis says. "We can take our customer buckets and really narrow them down, to get as close as possible to a perfect fit off the rack. Retailers and brands are never going to do that, because they're not going to take the inventory risk without having the data to support it. We already have the data."
The counterpoint to all the new digital focus is the style consultants. They're the company's human face and the equivalent of 2,000-plus storefronts (and growing). "Nordstrom can never open a store in Tulsa," Davis says, "but we have five style consultants there. We crush it in Tulsa. We crush it in Baton Rouge. And it's not like we need a million dollars from each of them to justify doing business there. We need $2,000--and, in fact, we get $20,000."
Of course, the in-person social element can work against the company, too. When you're adding thousands of salespeople, you're bound to land some duds. I saw this firsthand a month before Conference, when I attended a J.Hilburn training session in Manhattan. Of the four young women there to learn the ropes, only one had any real experience measuring customers, and two seemed less than confident at making sales calls. There were a lot of fumbled lines and poorly measured sleeves in the practice sessions, and I kept finding myself thinking, What happens when a customer has this as his first experience with J.Hilburn? It's not going to inspire trust, and if the clothes come back ill fitting, there's a good chance he's been lost forever. Worse, with social media, the word of bad customer experiences can spread quickly.
Davis and Rathod aren't blind to those risks, and they're investing heavily in training and sales tools. Conference and the iPad app are prime examples, and so is an elaborate continuing-education program. On a tougher note, the company is working to establish a rating system for sales reps, whereby those who get low scores make smaller commissions and presumably move on quickly. Meanwhile, Davis is back at his spreadsheets and planning for fast growth. At current growth rates, he projects the company will have around 50,000 reps worldwide in five years (not a crazy number, given that direct-sales stalwart Mary Kay has more than two million). If per-person earnings stay around $20,000, that would make J.Hilburn a billion-dollar business.
But that's all numbers and theory. As Davis will be the first to say, actually getting there is the hard part.
