Is Your Direct Sales Company Setting You Up For Heartbreak?
I hated writing that subject for this post, it pained me to do it. Why? Because I freaking LOVE direct sales. I think that social media + direct selling has truly democratized money making. It has only amazing growth and potential in its future. In fact, one of my soon to be released blog posts is all about why I think people should go into direct sales as a business.
But, at the same time, I’ve been working with direct sellers for 3 years. I’ve been in various forms of business for 20. Over the last year or so it’s become evident that there is a huge divide between the corporate entities that are the home offices of direct sellers, the consultants that sign on, their uplines, and the consumer base that they serve.
Note: This is by no means a blanket statement that will apply to every direct sales company. However, the patterns of behavior are prevalent enough to where I’ve started to think about how the policies and procedures that many consultants are governed by are handcuffing them and keeping them from growing.
How Direct Sales Companies Work for Onboarding
Most direct sales companies want their consultants to have a quick win right off the bat. It helps to reinforce community. It establishes the company as the right choice for direct sellers to grow their small business. Many of these same corporations subscribe to the unsustainable network marketing principles of sell to your friends and family first, last, and always – always go back to your list. As a consequence, a methodology was born that you’ll hear some variation of in most companies.
- Make a list of everyone you know in various spheres of your life
- Call, email or Private message them and share the amazing benefits of your product (let the product sell itself, no one will be able to say no!)
- Keep asking, a no isn’t a no, it’s just a no for right now.
AND to add some fuel to the fire, there are usually fast start incentives for people who reach certain milestones in a predetermined period. (This practice is very common in sales in general, but it’s important to note it here).
But doesn’t that work?
This philosophy does work! It almost always will – at least to start. But the question is – WHY does it work? It works because:
- Your friends and family want to support you. They’re going to buy whatever you’re selling whether they want to or not to right at the beginning.
- You tap into your warm market immediately. This market doesn’t usually don’t have the product that you sell, so they’ll purchase out of curiosity.
Using this tactic, most people who have a community network already built will see success. This creates a lot of initial excitement and momentum.
Unfortunately, the habits and tactics that result in those initial successes don’t have much in common with the strategies necessary for long term success. So, for most people, it’s not long before that success starts to wane, and there’s a lull in sales. This starts the downward spiral that all of us have been in at some point or another. You start to question whether direct selling is right for you.
That said, it’s important to note that there are a lot of people who can take this tactic, run with it, and build very strong businesses, but there’s a reason that 99.7% of people lose money in their direct sales business.
It’s because this tactic works for MOST people for a short period of time, SOME people for the medium term, and a very small subset for more than a couple of years.
The issue here is that direct sales consultants on board as business owners and salespeople don’t receive training on how to run a business or sell using proven marketing and sales principles. Despite the fact that there are plenty of coaches and direct sellers willing to teach on these topics. There is too much emphasis placed on cheerleading, vanity metrics, and placing top performers on a pedestal. The trainings are based on anecdotal evidence supporting tactics that don’t apply in the social selling world and not enough time spent on established business tools for entrepreneurs.
As a consequence, you end up with a disenfranchised consultant base left feeling inadequate and defeated. There are always those who aren’t doing well but are still excited about the product and the company, but even they start to feel anxious about their slowly diminishing sales.
To solve this problem, home offices need to implement a new education strategy. One that takes the changing landscape into effect that involves:
- A consistent feedback loop from the consumers and consultants informing future product deployment
- A strong understanding of social media, social selling, and influencer strategy
- Developing a customer archetype for both the consultant and the customer to identify their overall pain points and solutions
- Creating a training program designed to educate consultants on the basics of running a business, P&L, marketing, sales strategy, customer acquiring and retention, and social media
I believe that we are moving into a new era of direct sales. One where we return to the community-based commerce that was prevalent for many thousands of years. Truthfully, this is also the foundation upon which direct sales was built. The technology is different. The landscape has changed. But the philosophy behind direct sales: supporting community members, trusting the people you do business with, those things remain the same. Consumers and consultants are all moving into the 21st century. They are embracing a new way of commerce – and if the home offices for the various network marketing companies don’t join them, they’ll find themselves left by the wayside as people who would prefer to be in direct sales leave to run their own businesses in alignment with how their customers want to shop, not how their home office wishes they would shop.