Written by Brett Duncan. Brett specializes in helping direct selling companies evolve into modern social selling models while still maintaining the culture and essence of who they are and what makes them different. He is co-founder and managing partner of Strategic Choice Partners, a business development firm that helps direct selling companies take their next steps.
New Numbers for a New Year
It’s 2024! In an age of unprecedented access to data and AI, it’s very easy to get lost in all the data we have access to. I’m intrigued and amazed by it all, but I’m also a rather simple man. I tend to find ways to simplify and synthesize things so I can actually do something with it, while also not getting too caught up in finding 10 different ways to essentially show me the same thing.
So what numbers are you focused on in 2024?
My partner and co-founder of Strategic Choice Partners, Alan Luce, used to coach clients that, if you could only track one number to determine the health of your direct selling business, track the ups and downs of your paid-as leaders. In other words, it’s one thing to track the number of Consultants who have achieved a certain rank in your company at some point, but what really matters are the number of Consultants who actually produce at those levels each month. Typically, if the number of Consultants achieving at each level rank increases for a month, some good things happened. If not, it was probably a weaker month.
Alan was right (he typically was). There can be exception to the rule, but tracking this one number not only typically captures the trends in revenue and recruiting for the month, but also the “pulse of the field.” Nothing causes more excitement than promotions and rank achievements. And, it has an interesting ability to track not only lagging indicators, but also predictive indicators in your business.
So, let’s start with saying this: If tracking paid-as leaders each pay period is not a part of your core KPI review each month, it needs to be.
As I’ve worked with clients the last few years, I’ve also noticed my fondness for tracking some often overlooked metrics that I feel have way more impact than most that we share. I even wrote about it here a while back. Sure, we still need to track revenue, recruiting, new customer acquisition, order counts, order averages and more. But so often some of those data points can only capture a piece of the real puzzle. When you start asking questions like “why is recruiting important?”, or “why do new customers matter?”, you can find some deeper meaning in what I think are better numbers.
So, here are three numbers I think every direct selling company should start tracking diligently in 2024 and beyond:
Consultants Who Sold to a Customer
Enrolling new Consultants into your business is always important, and always will be. But why is it so important? Where the company may run campaigns for customer acquisition, it’s just acquisition by addition. The very nature of a “Consultant” should be that they are joining as a Consultant to sell to Customers (and maybe more). So they represent customer acquisition by multiplication.
But, of course, we know not every Consultant sells to a Customer every month. Or every quarter. Or sometimes even every year. We love ‘em all, but what we really need are Consultants who sell to a Customer.
So, start tracking how many Consultants sold to at least one customer in a month. Doesn’t have to be a new customer; just any customer. Some companies call these “Active” Consultants. Regardless of what you call them, set your baseline as to how many Consultants typically act like Consultants in a month, and then put together programs and campaigns to increase that number.
Focusing on multiplication efforts over addition efforts makes sense every single time.
Here’s a twist on these numbers to consider, too:
- What percent of total “Active” Consultants on your roster actually sold this month? So, if you have 50,000 Consultants on the books, and 20,000 of them sold to a Customer this month, that’s 40%.
- How many sold to 2 Customers? 3 Customers? 5+?
- How many new Consultants sold to a New Customer? (However you want to define “New”).
Consultants Who Sponsored Another Consultant
Much like tracking how many Consultants sold to a Customer, we also need to track how many Consultants sponsored another Consultant, for all the same reasons. This number will be much lower than the selling Consultants number (and it should be). But again, you want to really track your producers, not just people who sign up with good intentions.
Here are some twists you can put on this data as well:
- Track it quarterly as well as monthly; for most Consultants, sponsoring once a quarter is still very reasonable and denotes a high level of involvement.
- What % of your total Consultant roster sponsored this month?
- How many new Consultants sponsored a New Consultant?
# of Customers Who Placed Their Second Order
Customer Acquisition gets so much attention. But what does one order get us, really?!? What we really need to do is turn that acquisition into repetition. So much goes into getting new customers, and we so often completely drop the ball when it comes to retention. Start tracking how many Customers place their second order.
In the work I’ve done with clients, just getting more second orders from a new Customer can lead to thousands, even millions in new revenue.
Once you start tracking this metric, you’ll be shocked just how much it will shape your sales and marketing efforts moving forward. And the cost for the second order it normally way less than the first, in terms of total effort and investment.
We all love third, fifth, tenth orders, but none of that happens until you get the second. Focus way more on getting the second order from your new customers and watch what happens.
Where Do I Start?
Ready to get going? Here’s a simple place to start:
- Figure out how (and who) will track these new metrics.
- Backdate these new metrics for each month in 2023 to serve as your baseline.
- Set aside 30 mins each month to review your numbers, comparing them to last year, and make decisions on how you can improve them in 2024.
I’d love to hear about your results. Just think of what 2024 could like if more Consultants sold and sponsored, and more Customers came back and ordered more.
SHARE THIS ARTICLE:
Leave a Reply