Major Pitfalls that Direct Selling Companies Face in Recruiting and Retaining Distributors

According to the WFDSA, the global direct selling community involves more than 116 million distributors. In the US, this number totals 18.6 million people. However, these figures seem not so big if we take into account that between 70% and 80% of new distributors never take any further steps after they join a company. So why is there such a high level of inactive distributors? What goes wrong after their enrollment?

Of course, on average 71,4% of those distributors never intend to become distributors, but this still leaves us with the attrition of 5.6 million distributors every year. Why is that happening, and what could be done to retain them?

The wrong fit? Or rather, some companies do a poor job in engaging and supporting their field.

Having been helping direct selling companies drive business success through onboarding, training, and engaging their distributors for more than six years, we’ve come to the conclusion that there are five engagement pillars to follow to empower the field. Today, we are sharing the most profound lessons learned: the biggest challenges and the best solutions as to how to supercharge your distributors.

Personalized distributor onboarding

We had two people, Sarah and Debby, who decided to join two different direct selling companies specialized in selling wellness products. Both didn’t have any prior experience in direct selling. Both liked the products and were motivated to share them with others. After four months, Sarah became a successful independent business owner with a group of motivated recruits while Debby abandoned the opportunity.

Having analyzed these two distributors’ experiences, we want to share with you five rules that contributed to Sarah’s success and explain why disregarding these rules led to Debby’s failure.

Rule #1. It is what you do with new recruits in their first days that leads to either their success or failure.  

The key point to keep in mind is that people join the direct selling industry for different reasons: some would just like to share products they love and get discounts on them, while others want to make extra money by building their business. Some might be doing it out of boredom and the need for community, while others might join out of desperation and the need to make a living. This is why assessing the goals of each of your new recruits should be the cornerstone of their experience. For this reason, direct selling companies have to segment their new recruits early on. However, just segmentation is not actionable enough for success. To get the most effective onboarding, companies need to develop personalized journeys for success, navigating each distributor to their goals. It’s impossible to do so manually, so technology and automation play a big role. Luckily, there are great technologies available that are up to this challenge.

Paul Adams, President at Adams Resource Group, says that most direct selling companies don’t provide new recruits with a personalized approach tailored to each individual’s goals during their onboarding period: “The new consultant wants to know ‘What should I do FIRST?’ and then, ‘What should I do NEXT?’ In my experience, this very basic information does not exist in most companies.”

So, it was Debby’s first day as a distributor and once she logged into the company’s back office app, she was struck by an avalanche of information. She also received a fat binder in her Starter Kit, but going through it required a lot of time and was not exciting since all she wanted was to sell, sell, sell! Hefty training content on products, compensation plan descriptions, compliance regulations, social selling tips, personal website directions, and all other details were all available as part of the offering, but making sense of all this information was too much. Debby was completely overwhelmed and decided to just call her friends and offer them her new amazing products. She was still excited, but her friends could not understand what she wanted from them. They were eager to help, but they could not make sense of the products she was pitching. As a result, she was shocked to hear polite declines one after another. At this point, she mentally gave up after her first 72 hours with the company, because how can she reach her desired goals in the direct selling business if the starting point is way too complicated for a beginner?

Now let’s see how Sarah went through her onboarding period. Her company provided her with a smart training opportunity to enable Sarah to hit the ground running. Thanks to machine learning and data analysis, this platform suggested step-by-step recommendations for her on what to do to succeed based on her personal goals. By tracking her progress throughout the early days with the company, the smart system also predicted possible obstacles and timely sent her learning nuggets to avoid any productivity challenges. As a bonus for each completed task, Sarah received points and unlocked badges, becoming more engaged in reaching new milestones. Such early wins had encouraged her to double down on her efforts in social selling and grow her business three times faster than her peers.

Data-driven distributor training

Rule #2. Motivation is only half the battle. “Why should I keep doing it?” needs to translate into “I know how to do it.”

Even though Debby’s onboarding experience was hell, she still kept faith in her success, plowing through numerous product manuals and training materials. Soon she discovered that despite going over so much material, she was still lacking knowledge on how to make a sale and connect with new prospects. Clumsy training materials didn’t help her out as well. She couldn’t find tips on how to succeed and her upline was too busy at the time to help her out.

On the contrary, Sarah continued her independent business journey with the help of performance-based training. Thanks to personalized just-in-time learning nuggets, she booked 25% more appointments than her peers resulting in 32% more sales. Meanwhile, she also started recruiting new downlines since she learned from her training that mentoring others is one of her strengths. Sarah saw a positive influence of training on her performance and wanted to share her early successes with others, so she was much more motivated to use the training based on her performance as it was taking her step by step towards her personal goals.

Sustainable distributor recruitment

Rule #3. If a new upline’s flexible business opportunity turns into a full-time manager job, they won’t have time to succeed.

Debby saw Sarah’s growth and thought it would be a good idea to recruit several downlines. What she didn’t know is that her new role as their upline leader would take all her time. She understood why her own upline wasn’t able to help her when she joined the company. Being a responsible adult, Debby couldn’t ignore questions from her downlines and she did her best to help them make their first sales. She would spend countless hours sending them text messages and chatting with them on Facebook. Some of her recruits were used to communicating remotely, while others would become stressed when she could not give them sufficient attention. Debby still kept convincing herself that her efforts would pay off in the long term. However, almost all her downlines became inactive or quit the company soon after. Yes, lack of competence as to how to be a successful upline and develop a personalized growth plan for each downline had an adverse effect. Debby neither earned extra money nor developed her own business.

When Sarah began to grow her team of downlines, she was much more successful. Having on hand a smart training app, she knew that her recruits wouldn’t feel lost even without her 24/7 assistance. Firstly, her downlines enjoyed the personalized onboarding experiences as she did, so Sarah didn’t have to watch over each recruit’s shoulder to ensure that they know what to do next. Secondly, the data-driven system kept sending her real-time reports on her downlines’ progress, so she could step in when some of them needed support most. Thirdly, Sarah received relevant training on how to successfully grow a team of downlines without sacrificing the development of the upline’s own business.

Predictable distributor retention

Rule #4. Prevention is better than cure. Leverage technology to predict who’s going to leave to timely address your field challenges.

The snowball of challenges kept getting bigger the longer Debby stayed with her company. She couldn’t sell all the products she bought, she struggled to find new prospects and keep in touch with the existing ones, eventually losing customers she had before. Then there was a point of no return: she decided to leave even if, at first, she was super excited about the possibility of having a flexible schedule, being her own boss, and making some contributions to her family’s vacation budget.

Upon growing her business, hosting multiple product parties, and helping her downlines succeed in their businesses, there were times when Sarah felt overwhelmed despite having ongoing support through a mobile app that had all the training materials. However, the training system tracked Sarah’s performance, analyzing every step and her activity to detect any signs or warnings that something was going wrong. So when Sarah’s upline got a notification that she was not as engaged as before, she didn’t hesitate to connect with her to offer support, mentoring and discuss recent challenges.

The overall distributor experience

Rule #5. Provide personalized paths to success from Day 1, so that your distributors have on-demand support on the way to reaching their own goals.

Having learned from Sarah and Debby’s experiences, we now see why the former succeeded while the latter failed. If Debby’s company had had the right technology to support her and provide clear guidance to her goals, the story could have ended differently.

By analyzing the lifecycle of your field as well as accumulated learnings from industry data, you’ll be able to automatically provide a holistic, personalized experience that incorporates clear steps to success right from the moment a new recruit joins the company. If your distributors get ongoing support in the form of customized business growth activities and feedback on their progress, they’ll quickly build self-confidence and stay motivated. This way, they become more productive and inspire others to join your company with their own example of success.

To motivate and engage your workforce, you’ll need the right technology – a platform using context and data to trigger the right activities at the right times for the right behaviors. Click here to see Rallyware in action or read more about our performance enablement suite.