Growth & Retention Strategies

A leading cause of failure in start-up direct selling companies is loss of momentum and field attrition.The good news is you can beat the odds if you follow these top 10 growth and retention strategies.

Direct selling is maturing, especially in the U.S., and the competition out there is intense.  Only 18% of direct selling start-up companies survive past one year. A leading cause of failure is loss of momentum and field attrition. If your company performs according to industry averages, you will lose 80 out of every 100 field reps–50% will be gone in the first 90 days after enrollment. Many will never even get started. Getting your first 500 representatives will be one of your biggest challenges.  Competition for U.S. field reps is extreme. They  are more discriminating and selective than ever before.

The good news is if you follow proven MLM best practices, you can beat the odds and succeed! Here are the top 10 growth and retention strategies:

1.  Realize you are in the relationship business. Put the distributor at the heart of all you do. Teach your staff and management team the lifetime value of a distributor ($20,000 asset). Make every decision asking yourself, “How will this impact our distributors?”

2.Track and analyze key retention metrics. For example, compile an Entering Class Report that tracks the performance of each new entering class (all the distributors  that join in a certain month) over time. Companies get put to sleep by growth. They know they brought on 10,000 people but don’t know how many they lost. Track performance–who’s outperforming or underperforming the base line.

3.  Have a solid, structured 90-day program for new distributors and customers (critical period for retention and momentum). New people typically have no game plan. Corporate must provide elements the field can leverage.

–    Training

–    Tools

–    Communication

–    Culture

–    Rewards (cash, recognition, etc.)

4.  Make sure interactive corporate/field communications are in place and that they are two-way, not one way.

–     Be innovative – texting, blogs, forums, replicating newsletters, etc.

–     Conduct exit interviews, ask:

• Why did you join?
• Why did you leave?
• What could we have done to help you have a better experience?

–    Hold time and rank-specific phone interviews with random samples of distributors.

–    Organize focus groups – pooling analysis, i.e., can’t get past a rank–what are the hurdles? Analyze trends.

5.  Use pre-launch recruiting strategies to hit the ground running. Leverage your warm market. If you’re a party plan company, use test parties. Use social media marketing, especially Facebook. Follow pockets of energy and pour gas on the fire with events–evenings of opportunity, trade shows, etc.

6.  Know your unique value propositions. What are your customers really buying from you, and why are they buying it from you and not someone else? With all the possible choices for direct selling companies to join, why will your distributors choose you? Be sure you have good answers to these questions. Constantly convey value! To keep people on autoship, you have to keep putting value out there.

7.  Make sure “on ramps” (join options) are in place to accommodate involvement by a wide range of customers and distributors to help them achieve success (as they define it) upon enrollment.  Common goals for new distributors include:

• Product at the best possible price
• Use the product “for free”
• $300 per month
• Part-time income
• Full-time income

8.  Make sure the compensation plan, along with early incentives and rewards, enables new distributors to get “profitable” as soon as possible. Train new  distributors on the specific steps to take from day one, as well as on compensation plan basics. Analyze the dollar-per-hour proposition–the target is $25.

9.  Use a Distributor Growth Council and Founder’s Group Program early. Learn from successful distributors. Duplicate their best practices. Make them your     advocates and champions.

10.  Coach and mentor early field leaders. Watch for those who are recruiting and selling early and work with them to duplicate success. Don’t take them for granted or assume they will just continue. Maintain close contact, provide mentoring, encouragement, and recognition. Practice “servant leadership.” Remember, you’re in the relationship business.

The bottom line is to succeed in direct selling is to become a best practices company. Following the above best practices will definitely make a difference in your growth and retention.