Thursday, March 8, 2007

Direct Sales heresy

Here is the heresy:

You can actually make more money selling product than by recruiting. Do you believe that? I do. Here's why:

Out of every 100 people you talk to about your business, how many actually sign up? My guess is that if you got 3 of them you are a really good sales person. Now, how many of those 3 will be successful in your business. My guess is that none of them will. You need more signups. Maybe one out of 25 will be nicely successful.

Second question: out of every 100 people you talk to about your products, how many might become a customer? I am thinking at least 20.

So, you tell me. Would you rather have 100 regular customers or one potential salesperson? Normally I would jump at the chance of 100 regular customers.

But here is one of the problems.

Many direct sales companies are set up to recruit not to grow customers. Why is that? The main reason, in my opinion, is that their product will not sell without making people buy it on a monthly basis in order to make money for themselves. Thus, we have that strange thing called "autoship." Can you see how depending on your downline ordering monthly on "autoship" leaves too much luck in the process to maintain a solid base of strength?

Mary Jane Medlock has over 6,000 customers. She says that you need to earn the respect of your customers before anything else good happens. "I don't think my customers would have been happy if I recruited. They just wanted to lose weight. They wanted my success. They weren't coming to some pyramid thing. They weren't coming so I could put them on autoship."

How much does Mary Jane make? Here's the math: 6,000 customers order about $200 per month each. Her company pays here 20% commission (not points, not bonuses, not a vague amount over a certain monthly sales volume). How much is that? My calculation shows she makes $240,000 a year in commissions.

Let's look at the top direct-sales companies and the commissions they pay. Not too shabby!

Again, if the products are good, why is there so much emphasis on recruitment? My idea is this: if you can't sell the product, leave the company. Is that too harsh?

That MaryKay commission of 50% sure looks yummy. Too bad I'm a guy! Tell me, do MaryKay reps do well? Would you say that the people who have the most sellable products make the most money? Be honest. How hard did you work to get your current downline? How many in your downline are doing much at all?

Lots of questions. I don't know the answers. Please enlighten me.

Pretty much off-topic article:

How to make a great signature file

Here are some ways I can help YOU be as successful as you want to be!
1. advertise on my Ryze Promote It! bulletin board at no cost
2. advertise in my Yahoo group at no cost
3. Sign up for my awesome newsletter! ;)
4. Learn about Web 2.0 on my Squidoo website

Write me if you have any internet marketing questions.

I'd love to have you receive my weekly marketing newsletter. I provide solid, no BS, marketing information for people who work at home.

May the wind be always at your back!

Greg Cryns

No comments:

Post a Comment