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Providing Mary Kay Employees with Own Webpages Saves Millions

By Susannah Patton

December 01, 2001 — CIO — Call Michelle McGrath on any weekday afternoon, and you’ll hear her 5-year-old boy and 3-year-old twin girls playing in the background. Check in at 9 p.m., however, and McGrath will be online?in the quiet of her suburban Boston home?filling orders for lipstick and foundation, and e-mailing fellow beauty consultants and customers.

Mary Kay, known for its pink Cadillacs and old-fashioned face-to-face salesmanship, was thinking about women like McGrath when the company set out to create online tools and personalized webpages for its sales reps four years ago. The Dallas-based cosmetics company takes pride in pampering its 800,000 beauty consultants?awarding high performers with sales incentives and prizes, including the famed pink Cadillacs.

Instead of selling its products directly from its website, Mary Kay decided to help its sales force set up sites and manage home businesses online. The idea was that the beauty consultants would be more productive if they could contact customers and send their orders to company headquarters whenever they wanted. Mary Kay’s approach also helped avoid the channel conflicts experienced by many other direct sellers as they developed Web initiatives that sometimes bypassed the sales force.

"The Internet has freed up my time and allowed me to keep in touch with my customers," says McGrath, who has 500 customers on her e-mail address list. "My service is better and my business has tripled in three years. What’s most important is that my customers can reach me anytime."

Unlike many other direct sellers that have stumbled with Web initiatives, in some cases angering sales forces, Mary Kay has found a way to foster its primary asset?an enthusiastic sales force?while gaining e-commerce efficiencies. Customers can’t buy directly from Mary Kay’s sleekly designed website as they can at Avon.com. Instead, they’re directed to the personalized site of a nearby consultant, where they can order products online or call for over-the-phone advice.

Mary Kay has spent close to $15 million during the past five years to get its sales force online and to host personalized webpages for any interested beauty consultants in the United States. So far, roughly 24 percent?or about 120,000?of the company’s U.S. consultants have their own site. Mary Kay is also hosting sites in Canada and the United Kingdom, and Kregg Jodie, senior vice president and CIO, expects the program to expand to other countries soon.

The effort is clearly paying off. Internet ordering now accounts for 70 percent of Mary Kay’s revenue and is helping the company save money. Where each order from a beauty consultant used to cost more than $3 to process, electronic orders now cost the company less than $1, saving Mary Kay "well into the millions" during the past five years, according to Jodie.

 

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