What are the secrets of successful direct selling companies?
In all, we’ve identified twenty of them.
With an understanding of these secret elements, you can include them to build or grow your direct selling business.
Secrets #6 through #10 are presented in this article.
Secret #6
Be ready to recruit.
Recruiting is absolutely required to grow a direct selling company. There are two sources of recruiting – your representatives and your company.
Unless your initial representatives are good at recruiting, to grow your company, you must recruit, too.
When you are a brand new company, it might be prudent to use company resources to support your recruiting efforts, passing the leads to qualified representatives as quickly as possible.
Company-recruiting should be classified as a marketing expense. Budget for it.
Secret #7
Establish realistic personal sales volume (PSV) requirements for activity.
If you are a network marketing company, set your minimum PSV to be qualified for bonuses at the value corresponding to what a single person could reasonably consume in month.
If yours is a home party plan company, set the PSV so that it corresponds approximately to the value of an average home party’s retail sales.
Next, you’ll need to decide whether to measure activity over a consecutive number of weeks, a month, consecutive months, or a calendar quarter.
Secret #8
Recruiting is like filling a bucket with holes at the bottom.
To grow, the number of new representatives enrolled will need to be larger than the number of those who quit working. You need to fill your bucket faster than it leaks out of the bottom.
If you’re average, then you’ll lose 80% of your representatives annually.
If your company is a retention superstar, you’ll lose only 50% of your representatives each year.
Your company can be above average.
Secret #9
It’s worth it to plug the holes!
Focus on retention from day one. Have “welcome” and “follow up” processes. Offer a Fast Start program to reward recruiting. Provide rewards to both new recruits and their sponsors.
Secret #10
Select your products carefully.
Sell products that people would buy even if there was no compensation plan. With this approach, your sales will stay stronger when independent representatives stop working because some of them will remain as customers.
Identify the retail prices you can charge for each of your products. Then, work backwards to divide by a “margin multiplier” to determine what your cost needs to be.
If you’re a home party plan company, aim for a minimum margin multiplier of 5. Network marketing companies should aim for a minimum margin multiplier of 8.
If you sell clothing, food, wine or gold jewelry, don’t faint! The numbers above won’t work for you. You’ll need to make it work with lower margin multipliers (3.50 or better).
Conclusion
