The 10 Most Common Mistakes in Direct Selling Part 5

by Dan Jensen

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#8: Listening to the Wrong People 

I am often amazed at how often my consulting clients have taken bad advice from people who know very little about direct selling. As a result, they often make foolish decisions along the way that cost them millions of dollars in lost opportunity.

The direct selling industry is a unique type of business. For the most part, things that do well in conventional business models do well also in direct selling. There are, however, many very unique aspects to direct selling where this is not the case. Here are some examples of what not to do and why:

  • Retain a local attorney to deal with direct selling specific issues. This would be like hiring a foot doctor to do open heart surgery.
  • Have a successful distributor from another company write your compensation plan. Distributors who have built successful businesses will know the compensation plan of that company. They will have very narrow experience with limited perspective and will, in most cases, design a plan that will not work well for your unique business. They don’t know what they don’t know and often have little or no corporate experience to balance their field perspective.
  • Hire a computer consultant with little or no experience in direct selling to help you choose or design your software system. Direct selling has unique requirements and business practices that require specialized skill and experience. An inexperienced consultant will not know what questions to ask nor which issues are more important than others.
  • Hire a VP of Sales with no previous experience in direct selling. Your VP of Sales will be the person responsible for working with your sales force. If he or she has no experience in direct selling, how will they teach the sales force how to build successful businesses?

In summary, find competent people who have experience in the type of direct selling business you have, remembering that there are many business models out there. These are the people you want to listen to. Remember also that what you do not know today will often be the cause of your grief tomorrow.

#9: Poor Customer Service

One of your most critical departments is the Distributor Services Department. Each person in this department will handle problems, complaints, inquiries, and a thousand other issues that arise from your sales force. Your sales force are all volunteers and will quickly fire you if they are not well taken care of. Your Distributor Services Department must consist of an elite “SWAT” team with an obsession for customer service excellence to your field distributors. They must be trained by those with a similar obsession for excellence. A few entrepreneurs try to rely solely on the Internet to handle questions and concerns by distributors. Don’t fall into this trap! direct selling is a relationship business. Yes, you should use the Internet to take care of some of the needs of your sales force, but you can never build relationships and loyalty through the Internet. That takes person-to-person contact – the lifeblood of this business. You will also find that some of your sales people are not comfortable using computers. Most importantly, do not outsource this function! Nobody will take better care of your precious sales force than you will.

Many companies enter the industry thinking they only sell a business opportunity and some great products. They soon learn that they sell something more, something of immense power: customer service. Distributors are fickle and seem to join the company that offers the most. They stick with the company that keeps them happy. Those who have shopped at Nordstrom’s soon learn the power of customer service excellence to build customer loyalty. Some direct selling companies find their average distributor stays active only a few months. Others find it is several years. What’s the difference between them? It’s not the compensation plan. It’s not the products they sell. Instead, it is how well the distributor is taken care of.

A Customer Service Excellence Plan

Excellent customer service does not come by accident. It is the result of well thought out plans and hard work. It starts by having a very committed Distributor Services Manager empowered to implement the necessary systems, policies, and procedures to achieve excellence. The Customer Excellence System (CES) must be comprised of at least four areas:

  1. Customer Information Data Base
  2. Follow Up Systems
  3. Satisfaction Measurement
  4. Work Load Monitoring

Let’s look more closely at each of these:

1. Customer Information Data Base

In today’s modern business, customers have very high expectations for service. When a distributor calls the home office to ask for information, they expect to receive their answer immediately, not an hour later. With a customer information data base, the service rep on the phone can instantly access information that would otherwise take minutes or hours to find. Their answers can be correct because they base their answer on the computer database of information. The goal of any customer information data base is to know everything possible about the distributor that might be the source of a question. From order status to commission problems, the customer service software must provide instant answers to distributors as they call the office.

2. Follow Up Systems 

If 1,000 distributors were recruited this month, and 10,000 distributors had already joined, how many phone calls would they place with the home office? Most likely, well over 1,000 phone calls would need to be answered by professional, courteous, and competent office staff during the month. Of the 1,000 calls, how many would require a “call back”? It depends entirely on the quality of the customer information data base. The better the online information, the fewer call backs necessary. The goal of a good customer service system should be to have less than 5% of the calls requiring a call back. If 30% of the calls required call backs, there would be at least 300 opportunities for not following up and finishing the call. That’s 300 opportunities to lose a distributor per month.

Any customer service system that strives for excellence has a means of tracking each phone call or ‘service request’ to completion. Open calls can be tracked and aged with priority given to the oldest calls, or to the most important distributors. Such a system, often called an Event Management System, becomes the core of any professional customer service system. In essence, it keeps track of each inbound phone call or email from the field and makes sure that every call is answered in a timely fashion. It provides the department manager with the reports needed to avoid having a distributor’s call fall through the cracks in the floor.

3. Satisfaction Measurement 

If you don’t know how well your customer service people are doing, then you don’t know how your future will be. If they are doing poorly, the company is doomed to failure. If the distributors rave about the excellent service they receive, you can be assured of future success because they will trust you. If they trust that their new recruits will be well taken care of, they’ll recruit. If they have doubts that a new recruit they bring in would be happy, they’ll hold back. A customer service system must include the ability to track satisfaction levels. How is this done?

When a distributor phone call is logged and closed, a follow up call is placed, an email sent, or a survey letter mailed to the distributor asking:

  •  Was your call answered in a timely manner?
  •  Was the customer service representative courteous and professional?
  •  Was your question answered to your satisfaction?

Questions such as these, when answered by field distributors, become invaluable to reaching the goal of customer service excellence. The best software packages today incorporate Customer Service Excellence systems to make your obsession for excellence become a reality. Some companies provide bonuses to those reps who are consistently scored well by the distributors they serve.

4. Work Load Measurement 

No customer service department can survive increasing work loads for long without burn out. If the number of calls received each day is tracked, with the length of time it takes to handle the average call, expansion plans can be put in motion before work loads become critical. Distributors cannot be serviced with excellence if there are too few people to do the work. Once again, the task of measuring work load will require an excellent direct selling software system.

In summary, let customer service be your secret weapon to success. It takes planning, commitment, and hard work to achieve the excellence a successful direct selling company needs.