by: Anthony Harris

In the past two decades, we have seen that companies around the world have continuously prioritized product improvement and cost control. The goal is to provide high quality products while keeping production costs low. This business philosophy has ushered in new innovations in product distribution.

One of the growing distribution systems that have helped both the company offering the product and the independent distributor is MLM marketing system. Over 80 percent of direct selling companies now use the network marketing distribution scheme. MLM marketing system has surely made an impact in the way products are brought to end-users.

MLM marketing system is characteristically a direct selling method where distributors are compensated in both selling the company’s products and the business opportunity for customers becoming distributors as well. The distributors are independent contractors, so to speak, and not employees of the company; they function as the company’s customer base as well as sales and marketing arm for the products the company is offering.

MLM marketing system significantly cuts the distribution costs of a company. There is no more need for media advertising because word-of-mouth marketing is emphasized.

Warehousing and handling costs for the products are also kept to a minimum because, more often than not, the independent distributors help in shouldering these costs.

As these fixed costs are minimized, the company is able to reallocate the budget to pay for commissions of multilevel marketing distributors; which are variable in nature.

Overall, the company is able to cut down on logistical costs as a whole.

MLM marketing system revolves around three areas. Unlike in a basic direct selling system, these three factors are uniquely present in the many forms of MLM marketing systems.

The following factors also make an MLM marketing system hugely profitable for millions of independent MLM marketing distributors.

Firstly, an MLM marketing system is a perfect model for leveraging. Distributors earn commissions not only from their personal sales but also from the sales of their downlines distributors they have recruited. Upon reaching a qualifying level, rank or sales volume, a distributor earns a percentage from the sales of downlines.

Leveraging enables ordinary people to start on equal footing with everyone within the system. However, distributors have the opportunity to surpass the income of the same people they started with, or even those who started ahead of them, by retailing and sponsoring others into their organization.

Therefore, distributors can be catapulted to star ranks in the organization by having more people who can sell within their immediate group.

Secondly, MLM marketing systems make geometric growth in income potential possible. Imagine a distributor being able to recruit five downline distributors; then those five downlines are able to recruit another five downlines for each of them. On just the third level, the upline or pioneering distributor will have thirty independent sales and marketing arms from whom a percentage of sales can be earned without additional work done.

To be able to maximize the benefits of a network marketing compensation system, a distributor must commit to stay in the company for at least a year and, aside from effective sales, do personal recruiting and help recruits sponsor new recruits.

Lastly, MLM marketing systems provide a good source of residual income. MLM marketing distributors have the opportunity to earn residual income each time customers buy products and each time their downlines make sales as well.

Maximizing repeat sales potential can make distributors wealthy, this time without even working.
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by: Mark Riley

Introduction

The last frontiers to be automated in many organizations are the sales and marketing functions. But the risk of rejection and failure is high. Management see these as tools that will give them more control of an overhead that they find hard to probe and manage. Sales people can perceive these as a threat or hindrance rather than a help.

What are the underlying win-win benefits of an effective sales automation or CRM system? What are the potential causes of rejection and how can you overcome them and drive up adoption?

The Problem With Sales And Marketing People

In most organizations there is cocktail of beliefs, behaviors and attitudes that will undermine the adoption of sales and marketing automation systems.

‘Sales people are a breed apart.’ ‘They want to be recognized for the value they bring to the company without taking blame for any of the customer failures’. ‘They only do what’s necessary to hit quota’. ‘Information is power and sales people don’t like to volunteer shared information. ‘Marketeers are creative and don’t like rigorous processes’ ‘Sales and marketing often don’t work well together’

Many managers see sales people as a necessary overhead that they find hard to manage. Many leaders just don’t know whether to trust their sales people.

What happens if these issues are not recognized and dealt with when the company invests in a system to improve sales and marketing productivity?

Typically managers, directors, executives have been sold on the benefits of an easy-to-digest view of key measures and what’s going on. The users who do most of the heavy data entry don’t necessarily see as much value, and so they’re not as eager to participate.

The really good sales people are probably generating their own leads, know who they need to talk to, where they are in the sales process why and when the prospect is going to buy.

The not so good sales people don’t want you to know that they’re not so good and they don’t want you to know they don’t know what they’re doing.

The really good sales people will enter the minimum data required and the not so good sales people will litter the system with erroneous, missing or just too much data. The outcome is that the information that was so vital becomes misleading, useless and eventually discredited.

How can this situation be prevented?

Sell The Initiative

People resist new ways of working because they can’t see ‘What’s in it for me?’

This is often a bigger problem with convincing dyed-in-the-wool sales people who are cynical of anything that is designed to ‘soften the blows’.

There are two essential components to getting sales to buy into the initiative.

1. It has to be ‘sold’ by the business leaders who ultimately hold the power of reward and punishment.

2. Getting a good, well respected sales person, a ‘firelighter’ to adopt and evangelize the benefits of the system.

When selling to sales people, you need to play to their needs of recognition, independence, effectiveness, reward, and security.

Recognition

Make sure the purpose of the initiative is to make it easier for the sales to be more successful and help them improve their professionalism. Remind them that sales effectiveness is the key to becoming a leader in your market. Ensure the leaders keep saying so.

Explain the leaders will use the system as a management tool to better interact with the sales people and avoid compromising their relationships with customers for lack of knowledge of what’s really going on. That they will use the information to help them ensure more resources are focussed on their success.

Commit to continuous improvement of the system and ways of working that meet the needs of sales.

Independence

Promise to spend less of their time second-guessing or endless probing of what they are up to and putting them on the spot by asking -What will you close this month?-

Explain that the system will enable management to make sure that everyone else is doing what they ought to be doing to help sales win the order.

Effectiveness

Sales only value they way spend their time if it helps them achieve quota or earns them money. (Not always the same thing!).

Explain that you will ensure the data they have to update and use is minimized but you will require them to keep good data. The benefit will be that they will increase the ratio of selling time to admin time because the system can:

– Reduce the time to prepare for a sales call
– Reduce the time and effort to find out who said what to whom
– Automate approach letters, emails, quotations, forecasts
– Reduce time to produce and distribute reports
– Reduce time spent in learning seminars
– Fast search for the right information to support a sale
– Automate and accelerate the approval of a deal
– Reduce the time to mobilize team selling

Sales effectiveness is determined by the sales process, the competency and behaviour exhibited in each activity.

Point out that the system will suggest what the right process for the sale is, it will help them prioritise what they should do next, and it will show them their key sales activity ratios that they need to adjust in order to be most likely to beat targets. It will help management help to spot which sales people need help to develop their skills and competencies.

Most of all, the solution will help them manage the increasing complexity of the sale as more routine sales are increasing handled by sales administrators and the web.

Reward

Introduce reward structures that pay out for the way people work, not just the results. The system will provide the information you need that will predict probable outcomes and when management needs to intervene. The forecast is the most tangible thing to tie to reward payments. Drill downs from the forecast will reveal the accuracy of the data entered by sales. If sales know that management will drive the business by the system forecast, then let them know they only get paid if they have updated and created an adequate forecast.

Security

(OK Fear). Sales are increasingly vulnerable to the web. Their future hire-ability will be determined by their ability to embrace the business benefits of an effective sales and marketing automation system.

Changing Mindsets

There is no one way to create the right culture and mindsets that where these selling messages will lead to fast adoption of a new system.

We suggest that once the purpose of the system has been defined in terms that will benefit users, you should run facilitated workshops to:

– Get leaders to think and agree how and what they will be doing differently

– Get non management sales, marketing, customer service people to shape the processes and practices that the system must support

– Target credible senior ‘firelighters’ to agree and pilot the future ways of working. Use them to evangelize the solution

– Find a cynic and involve them in the early stages of the project. You will find all the reasons it won’t work and if you turn him/ her around they will be your best advocate

– Discuss and share success stories

Summary

There are enormous benefits in getting sales teams to adopt a well designed CRM solution. The programme must be designed to help sales succeed and will have to work hard to open closed minds, avoid rejection and drive adoption.

Mark Riley founded Xenogenix – http://www.xenogenix.co.uk – after leading marketing, sales and customer service teams at Cellnet, NTL and Dolphin. He has worked on more than 20 performance improvement assignments including clients such as or Vodafone, Virgin, Abbey, Financial Services Commission.