This week’s featured article is from Brett Duncan. Brett is a founding partner with Strategic Choice Partners, and an experienced executive specializing in marketing, communications and digital strategic consulting. He has worked in direct selling since 2002, and has served the industry as a strategic consultant since 2014.
Guest Post by Brett Duncan
The 9 Overlooked Benefits of an Attractive Customer Program
Plenty of experts have reported on and provided suggestions about how to respond to new regulatory requirements and best practices that have popped up in direct selling over the past two years. One of those best practices is the creation of a strong and distinct customer program, in which a customer would be allowed and encouraged to purchase products and, in most cases, receive a discount without having to become a distributor and have the ability to earn income.
My thinking on this is… why did it take us so long?!?
Having a strong customer program is not something we should feel like we “have to do”, but rather something we should “want to do”. It’s not a regulatory burden we must bear, but rather a wonderful (albeit obvious) opportunity for us to serve our customers and distributors better and more effectively.
I surveyed several direct selling customers at the end of 2016, asking them what types of projects were at the top of their lists for 2017. They were given about 15 different choices, and the top answer by far was the development of a customer program. In my discussions with clients, it continues to come up. So in this article, I hope to spotlight a few benefits that can be easy to overlook when it comes to customer programs.
First, here are a couple clarifications for this article. The term “Customer” refers to a person who is interested in simply buying and using your product. A “Distributor” is someone who is interested in sharing and selling products and earning income from that work. In your company, you may call these people “Consultants,” “Ambassadors,” “IBOs,” etc.
Here are nine advantages of strong customer programs that you may not be thinking about:
1. Be Satisfied (Elated) with Customers.
The fundamental shift in our thinking starts here. Any and every business, regardless of industry or product, thrives and survives on paying customers. And paying customers come when companies serve a certain audience by providing something they want in a way that they deem to be valuable. Put another way, if customers are the lifeblood of any business (and they are), then direct selling companies shouldn’t simply “tolerate” customers, or view them as a means to an end, but actually be elated when we get new customers, and see them as the end goal themselves.
For network marketers especially, we often think of “Customers” as our distributors (those who want to earn income). And I get that, and could even make an argument that they are a type of customer. But I think the best way to start looking at our distributors is as an extension of customer service. They can serve their customers in ways that our home office team cannot. They compliment the efforts of our corporate departments, and the synergy can be a true differentiator for you. In fact, with so many technologies and new direct-to-consumer capabilities available now in the marketplace, I believe direct selling’s ability to serve customers in the most personal and personalized way is and will become even more what sets us apart.
So for that reason, we must be ecstatic with new customers, and we must see everything else we do as a means to that end, and not the other way around. When product is leaving the warehouse and customers are receiving products they appreciate and value, then everything else about our business (recruiting, income earned, leadership development, etc.) gets much easier and more effective.
2. Sharing Wants Is Much Easier (and Better) Than Selling Needs.
I tell a story all the time of how, when he was four years old, my son would do everything he could not to brush his teeth. It was something I knew he needed to do, but he definitely didn’t want to do it. On the other hand, I could mention having some ice cream, and he jumped at the opportunity to have some without any further convincing. Ice cream was something he wanted.
So, what was easier for me to share to this audience (my son)? Toothpaste or ice cream?
When we focus on a customer, the best marketing we can do is give them what they want, not what we think they need. We too often try to convince someone who simply wants to try our product that they need to share this with all their friends and get life on their terms. Why don’t we start with “product on their terms,” and then just go from there? It’s that “on their terms” part we so easily say and yet so often ignore.
Think about it for yourself. When someone gives you what you want, not only do you value the solution, but you also appreciate the person/company who provided it. You think fondly of them. They clearly understood you. You want to talk about them to others, because the experience you had with them was awesome. And, because they don’t force you to make a decision about something you didn’t even think you needed to begin with, you’re more open to what they have to say as the relationship deepens.
3. Segmentation is a Marketer’s Best Friend.
As a consultant, I work with a lot of companies to help streamline their marketing and communications efforts internally to serve distributors and customers best. And I’m shocked how many direct selling companies don’t segment their communications. More times than not, companies are sending every message out to everyone in their database. And given that the majority of their database is made up of people who just want to buy and use their product, it’s hugely counterproductive when the majority of the messages these people receive has to do with Distributor incentives, contests, recognition, earning money and more.
There are definitely ways to position the income opportunity to customers the right way (see point #6 below). But great, effective marketing begins with knowing the recipient of your communication, and making sure the message resonates with the audience. Having a strong customer program in place that separates those with a “customer mindset” from those with a “distributor mindset” automatically helps you with the most basic segment.
Don’t stop there; use the data you have at your fingertips and tailor your messaging appropriately to deeper segments within your customer base. Customers who purchase something every month vs. those who purchase three times a year are very different. Customers who purchase a certain type of product vs. another type of product clearly have different interests. Customers who have been with you for two months vs. those who have been with you for two years are very different. Start segmenting more, and tailor every message to fit the audience.
4. Distributors Can Now Be More Qualified Than Ever Before.
More than anything, I love the fact that having a distinct customer program makes it so much easier to quickly identify those who are truly interested in and engaged with earning an income as a distributor. When someone chooses to become a distributor instead of a customer, and invests whatever you’re asking them to invest to do so, they are telling you in no uncertain terms that they are ready to start a business and share product. Not only is this a great opportunity for messaging segmentation at corporate, but it also helps your current field leaders tremendously, because they know who they should spend their time helping and developing as new distributors, and who they should help have the best possible customer experience.
Of course, your “recruiting” numbers may go down when this shift occurs, but just remember you’re comparing apples to oranges at this point. The real advantage here is that the productivity and activation of your Distributors now should increase significantly, because they are more qualified from the beginning. And customer acquisition is now just as important as distributor recruiting, if not moreso.
5. Discounts Are The Best Reward for Customers, not Distributors.
For many companies, one of the greatest benefits of becoming a distributor is to receive the top discount on products. In many of these situations, there is an opportunity to earn retail profits off of your wholesale purchases, so the larger that discount margin, the better. However, what has occurred more often than not is that people with a true customer mentality have become distributors on paper only because they want the discount.
This should tell us something. A discount on the product is first and foremost most valuable to those who value the product. Yes, I’m sure your distributors value the product highly. But clearly your customers do, too (or else they wouldn’t be customers). So I am a big fan of leveraging discounts for customers, not just distributors.
There are several ways you can go about doing this, and it’s not a one-size-fits-all solution. I won’t go into all the options now, but suffice it to say you need to ask for something in return for your discount off of retail (be it a “membership,” etc.), and distributors should definitely have access to the same discounts. You may also still want to include some form of additional discount for distributors. But be careful with this, or you may end up in the same place you were before: attracting product consumers who simply want the highest discount to become distributors. I challenge you to leverage your compensation plan and income earning potential as the primary perk for becoming a distributor, and not a product discount.
6. We Can Position the Income Opportunity the Right Way and at the Right Time.
In so many companies, field leaders will tell you they first started as just a product consumer. Their results and experiences with the product then led them to consider sharing it with others, and the rest is history. I love it when this happens. I feel like it’s the most organic and even most productive way for a distributor to join your company. I wouldn’t make it the only way someone can join your company as a distributor, but I certainly wouldn’t downplay it either.
By having a distinct customer program in place, you’re not taking away your opportunities to “upsell” customers toward becoming a distributor. You’re simply becoming a better steward of how and when to tell them about it.
When you can consistently deliver value at the product level to a customer in a way that meets a want they have, you can also make them aware of additional ways to interact with your brand and your products. One of those ways is as a distributor. Instead of “pushing” the opportunity on them, you can position it in a way that makes sense to them, when it makes sense to them. Instead of “exposing” them to the income opportunity, you can simply make them aware of it. And because you’ve delivered on providing value already, they will be much more open to receiving your messages now.
7. Most “Distributors” Actually Want to Just Share Product with Customers.
New distributors don’t always understand downlines and overrides, but they do understand that they can make a little money when they share and sell products to people they know. They don’t typically get how your breakaway compensation plan works, but they do know they are rewarded when people come over for a party and buy product.
The common denominator of every level of distributor you have is that they all want to share products with potential customers. So when you have an attractive and distinct customer program in place, you’re equipping distributors with something they can start sharing right away. You’re not forcing them to apologetically sign up their friends and family as distributors just so they can get the best discount. You’re allowing them to simply talk about products they love to other people they think will love them, too.
I believe conversations are the fundamental unit of success in direct selling. By allowing new distributors to simply have the conversation they’re most comfortable with having (and rewarding them for it), then more conversations take place, and everyone wins.
8. Corporate Must Have Access to the Customer Directly.
I’m always surprised how many corporate teams do not have access to customer information. I get how it happens. Especially in party plan companies, customers are viewed as “property” (for lack of a better term) of the distributor, not the Home Office. So companies have not accommodated for even collecting the information of those customers. Inevitably, the Home Office reaches a point where they would love to connect with these customers directly, in a way that compliments and supports the work of their distributor, but they cannot, because they do not have the information.
If you’re in this situation, creating a customer program gives you the opportunity to change this moving forward. As these customers choose to join your program, you now receive their information and can connect with them directly. Continue to honor the partnership with your distributors, viewing them as the most important part of your customer service team to these customers. But also leverage all the messaging and promotional opportunities (retargeting, email marketing, text notifications, etc.) in a way that only the corporate office can, simultaneously bolstering the efforts of the field in tandem. Implementing a customer program gives you the perfect scenario to gain access to your customers moving forward.
9. It’s a Natural Opportunity to Tighten Up Your Compensation Plan.
Compensation plans are all about rewarding, and influencing, certain behaviors. Additionally, shifting discounts and other components of your plan to accommodate a customer program can directly and indirectly influence other behaviors and your distributors’ income. So move forward carefully and methodically.
Firstly, to drive the cultural shift toward a higher focus on the customer, you must earmark certain components of your compensation plan to this behavior. Which means you probably need to find this money elsewhere in your compensation plan. Secondly, model every aspect of your plan and identify and account for any unintended consequences. Lastly, if you need help, don’t hesitate to ask for it. In my experience, you can never be too cautious about even the smallest improvement to your compensation plan.
My hope is there are at least a couple thoughts here that haven’t crossed your mind yet when it comes to the benefits of a strong and attractive customer program. If you’ve already incorporated a customer program, are there some ideas here that could help you leverage and/or position it in a stronger way? If you have not incorporated a customer program yet, my hope is you are now convinced that this isn’t just “safe” business (driven from a regulatory perspective), but also “good” business (driven from a marketing/growth perspective).
What stood out most to you? What aspects am I missing? I’d love to hear your feedback in the comments below.