So far in my career, I have not heard anybody say, “Customer is not important to me.” Regardless of what industry they are in, people always say the opposite. Some even make the exaggerated claim, “Customer is king!” – or queen.
This said, I am not so sure if customers are receiving enough attention in the network marketing world. Indicative of this is the fact that most compensation plans and incentives tend to reward recruiting over customer acquisition or customer loyalty.
More emphasis on customer, on the other hand, boosts growth and helps to build a succesful and sustainable business. Three important facts worth remembering in this context are:
Customers bring sales.
Obvious as this may sound, in my experience most network marketing cultures emphasize recruiting much more than sales. The reality is, if you don’t have a customer, your products will stay in your inventory. Only the customer has the power to convert them into cash for you.
Acquisition is more costly than retention.
Numerous books and articles have been published on this topic, along with many surveys. I don’t think there is anybody who can deny this anymore. Or is there?
Today’s customer is tomorrow’s network marketer.
Company executives and network marketing leaders witnessed this over and over again: Satisfied customers make enthusiastic networkers, who bring in new networkers and more new customers.
However, placing more emphasis on customer is easier said than done. Network marketing leaders have always been focused on the field organization, leaving the end-users aside for a very long time. Changing this will inevitably require a paradigm shift within any network marketing company and within its sales organization.
This shift will bring an additional perspective: While continuing to focus on the network of distributors, the company should also nurture and grow its customer base. This new perspective should include:
– Incentives to boost new sales, including cross-sell and up-sell programs.
– Rewarding loyalty and retention among customers.
– Providing motivation for regular purchases (i.e. auto-ship programs)
– Providing ways to join the club as customers only (i.e. preferred customer programs).
One of the world’s largest network marketing firms reported that in 2012, 88 percent of its organization members did not receive any commissions from the company. Moreover, 71 percent of the members did not sponsor another person. I don’t think the situation is much different in other network marketing companies in general.
This means most people joined simply because they liked the products and did not have any intentions to build a business.
In other words, there is such a huge crowd out there with entirely different motivations than what compensation plans aims at. Wouldn’t it be worthwhile to show a little more attention to this segment of the business? I am sure it would benefit everyone!
This article of mine was originally published on Networking Times. Republished with permission from Networking Times. All rights reserved.
This is a critically important topic for our industry. With more and more scrutiny on direct selling, we may soon see government regulation limiting recruiting practices and forcing a more customer-centric model. Hopefully enough of us will learn to do that ourselves as there is no doubt our understanding of how to focus on customers is much more acute than regulators’.