Both direct selling company managers and individual direct sellers have two common goals: Maximizing productivity and business volume in their teams. Some signs and symptoms may emerge which might indicate that things are not necessarily going in the right direction. Some of the issues might be transient and might not hurt the business much, but some are critical. Differentiating the two requires close attention to the warning signs that show themselves the numbers.
Here is a list of areas where you can see the significant early warnings:
Number of New Members
Newcomers constitute the lifeblood of a direct selling business. They boost growth. Check if there is a decrease in their rate of inflow.
Number of Those Who Quit
Some of your field members will leave the organization for a variety of reasons. This is inevitable. However, it is not desirable at all to witness an upward trend in their numbers. Especially dangerous situation is an increase in the ratio of those who give up to the existing direct sellers.
Ratio of New Members to Those Who Leave
As a rule of thumb, the number of those who join should be greater than those who leave at a given period. The opposite would indicate that the field organization is shrinking instead of growing.
Activity Among New Direct Sellers
There may be a downward trend in the sales made to new members. This could be in the form of less number of orders placed by this group or reduced average order size. The worst is a decline in both.
Activity Among Existing Sales Force
There may be a situation where newcomers lose their motivation after being active for a period of time (i.e. when they are no longer considered “new”). This may be due to many reasons each of which require immediate action.
Average Order Size
Within a year at most, a statistically reliable average order size establishes at new direct sales start-ups. A declining trend in the average order size is also alarming: Either the products are not seen as attractive anymore for some reason or the organization is not pushing them to the market as before.
Field’s Reaction to New Products or Campaigns
The sales organization may be getting less enthusiastic about your newly launched products or campaigns. This would be present in the number of orders per member, order sizes or the number of new products ordered from that offering, as compared to previous ones.
Activity Towards the End of a Commission Period
A flat activity throughout the period happens when the field members are not as motivated by climbing the career ladder in the compensation plan. As a result, they don’t work harder to close the period at a higher level. This is a serious problem!
Attendance to Meetings, Webinars and Conventions
If you see less and less people attending your events, this is just another sign of lost enthusiasm. Seeing the same faces come to your gatherings time and time again is just as dangerous.
Demands Coming from the Sales Organization
By nature, a sales organization has to be coming up with new demands, bringing in new ideas. A decrease in the inflow of these from the field shows that the members are losing faith in your business.
This list has not been intended to be in any order of importance. When any of these occurs, it should be considered as an alarm and taken seriously. Once a hiccup has been diagnosed, immediate action is always recommended. If the ball is left rolling in the adverse direction, after a certain point it might be impossible to stop.
Hakki Ozmorali is the Founder of WDS Consultancy, a management consulting and online publishing firm in Canada, specialized in providing services to direct selling firms. WDS Consultancy is a Supplier Member of the Canada DSA. It is the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.