The World Federation of Direct Selling Associations reports that they represent 1,000 companies in 140 countries with 35 million independent business representatives.  In the US, it represents $30 billion in annual sales. Sounds big doesn’t it, until you compare it with retail and all the other channels whose sales are $1.3 trillion, or 50 times the size of the direct selling profession? Considering that all these sales channels started around the same time, 135 years ago, why has direct selling stayed so small in relation to non-direct-selling channels?

The answer is value.

To understand the value equation, let’s consider two examples, one from the nutritional products industry, and one from the personal care products industry.

Example #1:  Nutritional Supplements

Many companies compete for consumers’ daily vitamin business. Off the shelf in retail stores, the offering is basic and, many would argue, adequate. Through direct selling of MLM products, where the product story can be told and unique features highlighted, the offerings become unique and interesting, maybe even compelling. But is the offering worth the vast difference in price? Maybe yes, or maybe no. You decide, but here’s what the numbers show us:

•    The average price of vitamin and mineral dietary supplements among the three largest distribution channels (grocery stores, mass market, and pharmacies— we’ll call these the “Big Three”) is $6.75

•    The average price of herbal supplements among the Big Three distribution channels is $7.72

•    The average price of vitamin and mineral dietary supplements sold through the direct selling channel is $19.12, or 283% times the average price of the Big Three

•    The average price of herbal dietary supplements sold through the direct selling channel is $24.16, or 313% times the average price of the Big Three

One conclusion is that the direct selling channel in general does not provide value to the market. Another conclusion is that the direct selling channel in general provides MLM products that have superior ingredients and manufacturing techniques, and the story needs to be told and the real value needs to be conveyed. Which conclusion applies to your company? If a story needs to be told, are your employees and business builders telling that story, consistently, accurately and passionately?

Example #2:  Personal Care Products

Across the nation, demonstrations, presentations and workshops employ the direct selling approach to selling personal care products. In the personal care products markets, direct selling accounts for $13.3 billion of the $52.7 billion in total personal care MLM products sales – roughly 25%. Why is direct selling so strong in this market segment?

The product demonstration and education experiences are conducted in homes and similarly comfortable settings where consultants offer convenience, personalized service and attention, helpful information, gift ideas, special offers, and the spice of variety in a social setting. The result is strong value in a direct selling channel.

The key for companies that are building long-term business—and this is the salient point—is to offer real value. And value must be conveyed; an old sales adage accurately maintains, “no tell, no sell.”

The most basic value equation has three components: Price, Quality and Service.
Various mixes of these components will define value in any offering. Consumers will accept sub-standard quality if pricing and service compensate; higher prices can be commanded where the quality and service mix are in a balance that supports price; if service is absent from the equation, quality is more sensitive to price; and so on.

If these value components exist and if they are in balance within your offerings, then what remains is to help your teams (corporate and field) to convey that value.  Without value, any attempt to convey an artificial value proposition is empty hype, and it will not last.  On the other hand, true value in the MLM products might exist but not be known if it is not effectively conveyed.

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If your company performs according to industry averages – you will lose 80 out of every 100 field reps you enroll.  What’s worse, as much as 50% of your attrition will occur in the first 90 days after enrollment.

If – like most – that is unacceptable to you, then we’re happy to share some specific things you can DO about it.

In a study lasting over 17 years and involving more than 120 direct sales and network marketing companies, we’ve identified 30 “best-practices” that lead to dramatic increases in field retention.  And the very best place to start is with a robust fast start system!  Effective fast start systems not only cut down field attrition levels during the critical first 90 days, but also yield increased average order sizes and help secure long-term field loyalty to your company.

Your fast start system should address the period of time from a new field rep’s enrollment through their first 90 days.  Just as the space shuttle needs over 80% of its fuel in the first two minutes beginning at launch to propel it on its journey – your new field reps must have more support in their first 90 days as they are propelled into their new way of life with your company.

There are several foundational elements that anchor your fast start system.  These are the basic building blocks.  The first order they receive from you is their first real exposure to your company.  It must contain the right information, and the right amount of information, to help them get started.  Within the first 72 hours they should receive a welcome contact from the home office, as well as have a productive training and planning session with their sponsor during which goals should be set and a detailed action plan should be outlined.

They must immediately be introduced to their support team – both corporate and field – and get connected to all important company communications and events.  They must be armed with “the stories” they will need to tell prospects and friends.  And never overlook helping them immediately develop the first story they will have to tell in response to the “you did what!?” question – which they’ll likely be asked at least once shortly after enrollment.

Your job at the corporate office is to create a fast start system built on these foundational elements that makes sure that EVERY new field rep has the opportunity to get started properly.  It must be a system.  It must be built on sound, repeatable processes.

Often we forget that people get involved with our companies for different reasons.  Instead, we design a “one-size-fits-all” welcome and fast start system that – in most companies – is designed to meet the needs of the business builder.  In truth, these business builders are the minority of our field organization, and those who come with different expectations can find our fast start information to be irritating and even offensive.

We have found that new field reps generally fit into three broad categories:

1.    Those who simply want to purchase our products or services at the best possible price.  This is often as much as 75% of the organization.
2.    Those who are willing to introduce a few friends and family in hopes of making enough money to effectively get their products or services for free.
3.    Business builders who are willing to do what is necessary to build some level of monthly income.  They will give various levels of time and commitment in exchange for various levels of income.

An effective fast start system will assure that we understand each new person’s goals and expectations during the enrollment process and capture this data in their customer record.  It will then provide each category of people with the necessary tools, training, and motivation to meet or exceed their goals.  Our objective is to make sure they experience success – as they define success – within the first 90 days.  We should then recognize and celebrate that success.

We must be certain that those in categories one and two experience the full benefits of our products or services within the first 90 days.  This should our focus.  In addition, category two people must be given the tools and training necessary to introduce our products and services to their friends and family members, and must be shown how doing so will result in being able to cover the cost of their own involvement.  Category three people must be provided with the business-building tools they need.  They must also be taught our company’s success cycle – that set of specific activities which, if done over and over, leads to higher and higher levels of income.

Begin by asking yourself the following question for each category – What should each category of people DO in the first 90 days to experience success; and what are the tools, training, and incentives they need?  Design your fast start system around the answers to that key question.

The fast start system you develop will be administered through a series of carefully orchestrated “touches” you have with the field:  first orders, welcome calls and e-mails, conference calls, newsletters, websites, sponsor meetings, etc.

If we understand our field reps’ goals and expectations, we can periodically invite them to increase their level of activity.  For example, it is very easy – after a successful first 90 days – to gently invite a person in category one or category two to invest a few more hours a month to generate some extra income.

A robust fast start system will not only cut down dramatically on field attrition – but it will also increase average order size, build long-term loyalty and strengthen commitment to your company.