Recruiting is an essential behavior for all direct
selling companies, for it is recruiting that produces
new independent representatives for your company.
Without new representatives, your company will
not grow. In fact, without new recruits, your business
will shrink!
While in time your sales force will be fully
responsible for recruiting new representatives, in the
beginning, that responsibility will belong to you.
Direct selling companies pursue two types of initial recruiting approaches – organic recruiting and strategic recruiting. Recruiting strategy is an important decision, one that requires consideration of both time and money.
Organic Recruiting
Organic recruiting can be described as “letting nature take its course.” The company recruits whoever it can find.
Since the average independent representative does not recruit others, the majority of representatives located through organic recruiting don’t recruit… ever!
What is the percentage of my recruits who will recruit others? The quick answer is between 4% and 60%. However, that is quite a range, so let’s narrow it down a bit!
If your business will be built with independent representatives who consume your products or services and sell very little, then the percentage of those who recruit will be at the upper end of the range (35%-60%). This is because without recruiting others, there is no money to be earned.
If your independent representatives will sell your products or services while consuming relatively little themselves (applicable to home party plan companies), the percentage who recruit will fall likely in the middle of the range (20%-25%).
Lastly, if your company has a low entry fee with many people joining just for the product discounts, the percentage of reps who recruit will be in the lowest portion of the range (4% - 15%).
With organic recruiting, no special efforts are put forth to locate experienced direct selling talent. As a result, the growth of your company in new recruits will be slower.
Companies who use organic recruiting will find themselves responsible for recruiting longer than companies who use strategic recruiting.
Strategic Recruiting
Strategic recruiting could be described as “stacking the deck” or assembling a team of “ringers.”
Experienced direct sellers are located and recruited so that the initial sales force has a high percentage of recruiting-capable members. "Founders" is the term most often used to refer to these leaders.
Founders are expected to generate results for which they are paid in a special manner, different but in addition to that offered by the company’s compensation plan. Just as you expect stellar results from top talent, Founders expect excellent compensation for their efforts, too.
A properly designed Founders Program works well to attract and retain its members. It should be designed after the primary compensation plan has been completed so that it works in harmony with it. As important, the budget for Founder compensation needs to be developed carefully.
Considerations
Organic recruiting works well for companies who don’t want to grow too fast and for those who have limited budgets in time and money.
Strategic recruiting works well for companies who want to begin with strong field presence, who are comfortable with a longer lead time to launch, and who have allocated both time and money to find top talent. To attract and to retain them, however, your business will need to be ready.
Your compensation plan, hostess program, training materials, products, website, etc. each should be attractive. They are part of a “system” that will be used by your top talent and their downlines to grow their businesses. When their businesses grow, so will yours.
Strategic recruiting requires the investment of time and money in a marketing campaign to locate top talent. They aren’t looking for you; you will need to look for them. Top talent is the top 5%. You can find them eventually with organic recruiting, but for every one top talent person you find, you will probably have to recruit 19 others (on average) to find just one.
If strategic recruiting appeals to you, don't make the mistake of compensating your top talent for past achievements. Skip signing bonuses, guaranteed payments, and draws, too. Instead, use a "pay for performance" approach.
For information on Founder Program development, contact Jay Leisner at Sylvina Consulting at 503.244.8787.
