How to Address the Root Causes of Attrition in the Direct Selling Industry

How to Address the Root Causes of Attrition in Direct Selling

In a recent article, we discussed “Pop and Drop” and all of its ugly consequences. Attrition is a huge problem in the direct selling industry.

Most companies seem to shrug it off as an inescapable part of the industry—something that’s in the DNA of the businesses. If that’s your unshakable conviction, then continue to focus on recruiting thousands more to your business—but bear in mind, many of these will eventually leave too.  And as long as you keep signing on enough distributors, things will be fine, right?

Ah, but that’s the rub.

How do you know you’ll always be able to sign on enough people? And furthermore, wouldn’t it make sense to try to keep more of your people now rather than continually trying to recruit their replacements in the face of a rising tide of monthly churn?

Fight Attrition by Understanding Behavioral Segmentation

To slow the burn of churn, you’ll need to get to know your people much more deeply than you do today. Realize that one system of training or a single loyalty program won’t work for all. Your field and customers are not all alike – they behave differently, their aspirations vary, and their goals are unique. What motivates one to work hard may cause another to leave.

Understanding these various segments is the key to reducing churn.

“Now, hold on!” you might protest. “We’re a huge company, and we have thousands of people leaving us each month. Are you telling me I have to get into the heads of tens of thousands of people at once? How is this even possible?!”

Relax. We’ve developed AI (artificial intelligence) for that. Even if you have hundreds of thousands of customers and distributors, our well-trained AI engine can accurately predict who will leave and map a retention path. We’ve built this from analyzing millions of reps and customers in more than 30 countries. As a result, we’ve found that distributors and customers fit into fewer than ten behavioral segments.

One segment could be someone who loves using your products because they’re cool, fashionable, practical or earth-friendly—and hey, if the opportunity lands in their lap, why not make a couple of hundred extra bucks by selling them?

Another segment could be a stay-at-home mom who enjoys the social capital of hosting parties where she makes a presentation about your products and tallies a few sales among her group of closest friends.

Another segment might be the full-time professional who’s serious about spending evening and weekend hours building a business that can generate several hundred to several thousand dollars per month in extra income.

And still another segment could be someone who is “all in”—someone who seeks to derive their full-time income from selling your products and building a team.

Each of these segments joins you for different reasons and has different goals, and at critical times each segment will need specific resources and support to remain successful and committed.

Why “Make More Money!!!” Doesn’t Always Work

Here’s where those segments become valuable. When you suspect that the stay-at-home mom we mentioned is thinking of leaving your company should you, or her upline leader, reach out to her with ways to triple her income over the next year?

Probably not, right? Sure, we’d all love to make more money. But as we mentioned, that stay-at-home mom isn’t driven by money—she wants to host cool parties and enjoy the satisfaction of providing a few of her friends with an excellent product.

In other words, she needs different support from what you’d offer your “I want to replace my full-time income” distributors.

So, what if you could not only group your entire base of customers and distributors into specific behavioral segments but also identify they’re 30 days from leaving AND mobilize your most successful the most influential distributor above them to intervene and provide the right support at the right time?

At DirecTech Labs, we’ve figured out a way to do precisely that. With our team of industry veterans, data scientists and behavioral scientists we’ve mapped out the most common behavioral segments in direct selling and identify the best action to take using our AI cloud solution.

We’re not claiming we can end all of the causes of attrition in direct sales, but we can drastically reduce churn and increase profitability.

Want to read more? Check out the article: How to Increase Customer and Field Retention

>>>Learn more about attrition in direct selling.

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