If you’re serious about finding ways to increase direct selling retention rates, don’t just focus on incentives, promotions, or discounts. These three tactics will get you on the fast track to lowering your churn.
As you probably know from experience, a sales rep or customer’s first 30, 60, or 90 days can set the tone for the entire relationship. Even though most new direct selling reps sign up with the intention of making some level of income, industry insiders say that 70 to 80% of them never make a single sale.
Think of Sarah, a sales rep who signs on full of hopes and dreams. She isn’t aiming to earn six figures, but she does want to generate a reliable second income by building a nice network of her friends, family, and coworkers (at her day job).
Minutes after Sarah completes the online checkout process to become a distributor, she gets a welcome email. It provides lots of helpful links to online training tools and product information. Great!
The next day, Sarah’s upline distributor calls to check in and answer any questions. Also great! So Sarah begins to reach out to her circle and makes some sales. Because she is energized and supported during her onboarding, she scores some early victories
Make sure that your onboarding process addresses your reps’ potential concerns and anticipates issues they may run into during onboarding. It’s helpful to watch a new rep go through the setup process. That way you can see it “through their eyes” and make improvements.
After her initial success, Sarah gets really busy with her day job and her family. She has hit a wall. She knows she should be working on building her business. But with nobody standing over her shoulder, it’s easy to let it slip for another day, week, or month. Especially since she does have at least a decent trickle of commissions coming in from her downline.
Weeks go by and Sarah hears nothing from her direct selling company—except for the occasional email pushing her to compete in the Bahamas Vacation Challenge, which is only open to the top performers in the company. Maybe her upline calls her and pushes her to run for a “stretch” promotion, thinking they’ll motivate her. In fact, the results are the opposite. Sarah might even try to run for the promo, but when she misses it by a mile, her assessment is that “the culture here expects too much of me. I don’t belong here.” 90 days later, she’s gone.
This scenario is the proven result of most well-intentioned promotions.
Use deeper segmentation to help your reps succeed by setting the right goals based on behavioral segmentation. In DirecTech Labs’ research on 15 million direct sellers and customers over seven years, we’ve discovered five distinct behavioral segments that every distributor will fall into.
Sarah is part of the segment we call a “Business Builder”. She’s behaving like people who want to earn a steady but very modest income. So her goal might be to make a few hundred dollars a month for 3 months in a row. Push her harder and you could push her out. Not enough and you’ll bore her.
Behavioral Segmentation gives you the clues you need to create experiences for your distributors that are far more personalized, resulting in more goals achieved and increasing the direct selling retention rate far more than you would have otherwise.
You’ve likely had the experience of browsing an e-commerce store and leaving without completing your purchase. Within minutes, you get an email with tailored product recommendations or a special discount on the item you were viewing. For years, e-commerce stores have been personalizing your experience to increase the likelihood of a sale.
In the direct selling industry, we have a leg up on e-commerce: While they have only AI and impersonal communications, we have human beings with existing personal relationships. AI and automation can take these relationships and make them even more powerful at scale.
For example, you can set up automation to support uplines in providing these more personalized paths for their people. Let’s take it back to Sarah. Great AI-powered automation will know (for example) that there’s an 88% chance that Sarah is in the last 30 days of her lifecycle. It will find the upline who is best suited to help her and send them a personalized message via SMS or a messenger app. The message will include details that help the upline have a truly personalized conversation with Sarah.
The result of this automation? More compelling and personalized interactions between upline and downline, between reps and customers, and therefore an increased retention rate.
DirecTech Labs is already implementing this type of automated messaging technology in 85 countries and fifteen languages for six of the largest direct selling companies. Our platform drives millions in new revenue by extending the lifespan and lifetime value of distributors and customers by up to ten times.
Get in touch for a free consultation to see the impact that this technology could have for your business.