If you are new to our Industry launching can be really confusing, even if you’ve achieved success in other business models, as Direct Sales may not be as easy as you think.
Neurevo can help. We have worked with companies from the initial stage of an idea and brand creation through to company launch. Taking into account aspects such as product development, marketing, creation of a successful website and a compensation plan which rewards the Distributors for their effort.
From our experience these are just a few things to consider when looking at this exciting route to market.
Direct Selling is predominately a word of mouth business, where people talk to each other and share their products and services, a method of marketing and retailing goods directly to a customer.
Independent Distributors call on customers or third parties, mainly in their homes or businesses, to show and often demonstrate products hence obtaining orders. The goods are then supplied by the company, either directly to the customer or through the Distributor who obtained the order.
Typically, the customer pays for the products a week or so later when the Distributor has arranged for them to be delivered either directly to the customer or for example to the hostess of a sales party. The individual that did the work retains the profit on the product.
The Distributors promote the products through word of mouth by recommending to friends, relatives and others in their sphere of influence. This is the main reason why companies can pass so much money back to their Distributors because of the savings in advertising costs and distribution.
However this creates many unique challenges compared to other ways of doing business. Unlike more traditional businesses which rely on salaried employees and planned outcomes, a successful Direct Selling business relies on a volunteer army of people, and people are unpredictable.
It’s the difference between mechanical growth and organic growth, or to put it another way, you are no longer managing people you are motivating people who have a choice to perform or not.
The people you rely on to create successful growth for your business are volunteers not employees.
Therefore, because the Direct Sales industry is so different to other more traditional businesses it requires highly experienced people with expertise in both industry specific corporate management and successful field experience to create growth. So to reduce the challenges and headaches of starting a Direct Selling company it is crucial to engage the best consultants you can find.
At Neurevo we help companies who are new start-ups or have no previous experience with this route to market to understand the industry and put the correct procedures in place for a successful launch.
We are also able to help our clients understand how Direct Sales is different from traditional retail business and how they can avoid the most common pitfalls in creating a successful Direct Sales business.
Personal service and customer satisfaction are at the core of successful Direct Selling organisations. So, a big question is which products are the most suitable for this industry?
Although there are many different kinds of products and services that are sold through this medium, some products are much better suited to this business model, than others.
What’s your USP? The key feature here is clearly demonstrable benefit. The more the product needs to be presented to the customer, together with a compelling story, the more chance of success.
It’s important to ask “What’s your story?”
In this industry it’s the story that drives momentum and your distributors need to be able to tell a unique and compelling story.
Story telling is crucial, however this creates another challenge. It is imperative that the company have the right legal policies and protection in place, to protect them from over enthusiastic Distributors making false claims and misrepresentations.
This can easily spiral out of control especially today with the speed of communication through the internet and social media. Not having the correct policies and legal procedures is another minefield that Neurevo are able to help their clients avoid.
So what is the difference between MLM, Network Marketing, Party Plan and Direct Sales?
A wide variety of people join Direct Selling businesses and utilise different methods to develop them.
- The person to person method is either where a catalogue is left with a customer and an order is collected later, or where a product is demonstrated in the home or business, on an individual basis.
- Party plan selling is where an independent salesperson demonstrates products to a group of customers, usually in the home of one customer who has agreed to act as a hostess.
They all have many common aspects and they all fall under the general umbrella of Direct Selling.
Sometimes the terms used are confusing, such as Network Marketing, Multi-Level
Marketing, Referral Marketing and Interactive Distribution.
Essentially all the above terms mean the same, which according to Wikipedia means;
…network marketing is a way of doing business in which a sales force earns a commission not only for sales of products and services they personally generate, but also for the sales of others they recruit and bring into the business, which creates a downline of distributors and a hierarchy of multiple leveraged levels of compensation.
In practice an individual that wants to develop a larger business turnover can introduce other people or outlets to their team. If they help these new people learn skills and look after outlets of their own then their teams’ turnover will indeed grow.
By developing large sales organisations big incomes can be achieved by those individuals who are willing to put the effort in to achieve this level of success.
The Internet has changed the demographics of the industry dramatically, whereas once it was mainly made up of housewives and those who were retired or between jobs now there are many professionals and young people involved who see this as the key to their future security. Whilst pursuing their careers, a successful Direct Sales business can fit in, in a flexible way, around their already hectic schedules.
Today Direct Sales is recognised as one of the key areas of growth in the digital age.