Why Don’t Direct Selling Companies’ Retention Efforts Work?

By April 5, 2018Video

If increasing retention is one of the top activities to drive growth, why don’t direct selling companies’ retention efforts work?

 

Increasing sales, recruiting, and retention are leading factors that drive growth for most direct selling companies. If increasing retention is so important, why don’t direct selling companies’ retention efforts work? Our team of behavioral scientists analyzed the lifecycle of 5.5 million distributors and customers in 30 countries and interviewed numerous executives.

Here are 2 main mindsets that are causing retention efforts to fail.

1) I GIVE UP. Direct selling companies have tried to change loyalty programs. They have tried different promotions, yet, nothing really seems to help. Ultimately, they give up on retention efforts and call churn the cost of doing business. They focused on acquiring rather than retaining.

1) ONE SIZE FITS ALL. They noticed that some people who become leaders behave in a specific manner. As a result, they try to get everyone to behave like leaders so ideally more people will perform like leaders. We’ve found that <1% of everyone that comes into contact with the business will ever become a leader. It may help the bottom line in the short term but over time, pushing people to behave differently will negatively affect your Field numbers.

By analyzing the lifecycle of a distributor (or customer), you will be able to understand their holistic experience and visualize the various touch points encountered with your company: from the time they join, recruit, sell, buy and churn.

Direct selling companies might have millions of distributors and customers but there aren’t a million ways a distributor or customer can go on this journey. There are 10 scientifically-validated unique behavior groups that exist in any direct selling companies’ Field and customers.

You can have a group of individuals who place 1 order and you never see them again. you can also have a hyperactive group of individuals who keep on recruiting, purchasing and selling. And there are 8 different variations between the previous two groups that make up the entire spectrum.

So if you want your retention efforts to work, you need to understand where your customers and distributors are in their lifecycle to send the right message at the right time.

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