Lifecycle Optimization Is Churn Prevention for Direct Selling Companies
We’ve written before about the concept of using value to date (VTD) to measure the contributions of your sales reps.
VTD is a really simple metric—but an essential one throughout your churn prevention efforts. Why? Because it tells you exactly how much any sales rep has contributed to your bottom line up to this point. There’s no bias involved. No distributor tiers or volume points to distract you. VTD is just a nice, round total of what each sales rep has generated.
VTD provides an answer, but it also leads directly to a question: how can you get each sales rep’s VTD to increase?
Watch the video to find out. Or simply read on for a summary.
Why Lifecycle Optimization Matters
The only reliable way to increase VTD for each sales rep across your organization is to focus on lifecycle optimization.
Lifecycle optimization is the discipline of motivating every sales rep towards the best possible performance for their current phase in your distributor lifecycle. We believe this lifecycle has four distinct stages:
1. Onboarding. Many direct selling companies lose the vast majority of their people within the first 90 days. If you’re serious about churn prevention, you’ll pay serious attention to what kind of onboarding process you’re providing for them. By giving them a positive first impression and adequate levels of support, you can increase the odds that your people will have a much longer lifecycle with your company.
2. Nurturing. Once your sales reps have survived that critical introductory period, you’ll continue developing them to motivate them to new levels of performance. If your company is doing a good job of providing educational and motivational resources, you’ll probably find that the nurturing cycle lasts a long time. There are many tried-and-true tactics to use here, including:
- Conference calls that provide sales tips and success stories.
- Local meetings in which sales reps can get moral support from their peers in the area.
- Webinars that let sales reps learn about your products or brush up on their sales techniques from the comfort of their own offices.
- Email campaigns that announce product promotions or even sales competitions.
3. High Risk. Sooner or later, the lifecycle of any sales rep will reach a critical point. Sure, they may have just made a sale—perhaps even a big order—but if you analyze the patterns in their behavior, you’ll discover that he or she is at high risk of quitting. The potential reasons for this disenchantment may vary widely, but the urgency is unmistakable: the sales rep is in a nosedive. If you don’t act swiftly with the right churn prevention methods, you’ll lose this distributor. But if you intervene quickly enough, you can extend the lifecycle for a period of months or years.
4. Winback. Not every churn prevention attempt will work. But even after a sales rep leaves your organization, they’re not necessarily gone forever. After all, they willingly joined your company at some point, so couldn’t you convince them to join you again? For a short period after a sales rep leaves, you may be able to make them an offer—in terms of bonuses or incentives—that will win them back.
Start Lifecycle Optimization Today
Your ability to maximize the VTD of each of your sales reps is directly proportional to your ability to provide the right kinds of support at all four stages of the sales rep lifecycle.
As you work towards lifecycle optimization, DirecTech Labs is here with the artificial intelligence and big data analytics technology you’ll need to get the most out of your people at every stage. Let us know how we can help you!
Learn how PM-International achieved up to 27% revenue uplift over 6 months by optimizing the lifecycle of their distributors and customers around the world. Download the case study here.