Everything you need to know to build a successful direct selling business

A few years ago I remember asking some of my senior colleagues if we knew the reasons why some markets suddenly started to growth exponentially. Their answer surprised me. They didn’t know. And after more than a decade working in direct sales I came up with my own theory.

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One day I got  a call from the boss’s boss. I was during summer, so a lot of people were out of the office and when you get a call saying “the boss wants to talk to you”, unannounced, you get worried. I remember that day because I thought it was going to be the end of that trip. And in a way, I was right.

I must say that I’ve been really lucky with the bosses I’ve worked with most of my life. I have learned many things from them and they have helped me develop personally and professionally. Haven said that, during that year I was getting bored. We had been working on the CRM strategy for the las couple of years and everything was going very well. All those long working hours were paying off, and we were starting to see some good results. But if you’re a doer, like me… this is the time when things start to get boring. I was younger, and I also needed more action. And well, I found it.

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That day, couple of hours after the call, I was having a coffee with the big boss. Everything was going smooth, normal until he finally said it. Just when I was starting to feel confident that nothing was about to happen he said “there’s an opportunity in Mexico, do you want to take it?”. I was stunned. “What?” I said. He explained to me that our colleagues in Mexico had just lost their Marketing Director and that we were going to launch TM5 worldwide within a year. They need someone with the experience and expertise to make sure the launch was a success, and support with business development in the country, as the numbers weren’t still not very good. Before I could even think about it, I found myself on a plane to Mexico. This was one of the best decisions of my life. But that’s a story for another post.

Define the right KPIs and incentives, including not only the commission scheme, but gifts, trips, recognitions… all you have.

For the next few months, I had to fly to Mexico every month. I spent two weeks in Mexico and two weeks in Spain, finishing all the work I had there. This time game me the opportunity to know the country, the team and the market situation a little bit better. And as I was also attending a lot of meetings at headquarters, I was able to ask my colleagues a lot of questions about how their markets work. One of the questions I used to ask whenever I got the chance was “Do we know what it takes for a market to explode?”. And I was really surprise that most of the people I met couldn’t answer the question. Even people with years of experience in direct sales. I was shocked. How could we not know? This is one of the basic of any business. You must know the circumstances necessary for your business to be a success.

Fortunately, I had the opportunity to work for another great boss in Mexico. She knew the business like no one else. She came from the bottom and had made it to the top. She knew all the secrets and the way to make a successful business.

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There’s something we need to clarify about direct sales. Many people believe that direct sales is a B2C business when in reality it is a B2B2C. It’s very common to forget that you have a middle layer between you and “your customers”. And why I use quotation marks when I talk about “your customers”. Because in reality your customers are in that middle layer. Think about the automotive industry. Where do you think car manufactures have the hardest negotiations and work? With the final consumer or with the car dealers? Of course you need to spend on advertising and targeting the end customer to make them aware of your products and decide to buy them. But the hard work is with your distribution channel. The same is also true for direct sales. Your business depends on the middle layer, your distribution channel. And this is the secret sauce to your success.

When you invest in your distribution channel, in your team, you are building the foundation for your business to succeed. It may take some time, but numbers won’t be long in coming. Now the question you may be asking yourself is “how do I do it? It’s not that simple”. And you’re right, this is not that simple. There’re a lot of factors that you have to take into account. There’re many pieces in this puzzle that have to fit together. But it’s not impossible either.

There are some basic principles to keep in mind. First, define the right KPIs and incentives for your sales force. This includes not only the commission scheme, but all the other incentives you may have: gifts, trips, recognitions… In fact, the direct sales industry has been using what is now known as gamification for decades. The only difference is that they call it “sales meetings”. Second, and this is just as important as the incentives, is training. Training your team is critical.

When you invest in training, you can achieve two goals. One is to improve the skills of your team, so they can perform better. Another is that you have plenty of people ready to support your growth and fill the new positions that will be created as your company expands. And to create some pressure on the existing team to achieve their objectives, since you have the replacement ready in case they don’t make it.

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Going back to my experience in Mexico, we invested a lot of time and effort in creating the dashboards and data that supported the business analysis. We needed to know how the teams were performing. When to split a team. In which city or suburb we should place the next office… and many other indicators that helped us to read our business. All this work paid off and we manage to growth three digits in few years, after expanding to 5 new cities and growing the team from about 200 people to more than 1000.

And don’t get me wrong, we also invested a lot in marketing and specially in content marketing. We also improve the customer service area, automatizing many processes and campaigns. We worked hard to find better suppliers for our incentives, got better offers and improve the incentives we had for our sales force and customers.

If you are in the direct sales business and are struggling, remember this basic rule: invest in your team, specially your sales team. That’s the magic sauce you need to be successful.

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