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Though there’s much still to be accomplished, direct selling technology has come a long way.
Not a few short years ago, direct selling was underdeveloped in terms of tech. Technologies were spread across multiple platforms, with numerous vendors and logins. Distributors had to leap from Gmail to YouTube to Google Docs to Facebook pages to commissions systems. Meanwhile, field administrators–sales and operations leaders–had no visibility and transparency with regard to their effectiveness.
Now, many major direct sellers have implemented technology to enable higher performance and more efficient operations for distributors at scale. The direct selling industry no longer looks anachronistic, but for the most part is in the process of modernizing and going through a digital transformation.
However, one tool that’s out of date for most major direct selling tech stacks is, arguably, of signal importance to distributor success today: the field-facing CRM, which helps distributors build and manage customer relationship.
Why is that? And what can direct sellers reasonably expect from smart CRMs, when integrated with other tools, for their distributor-facing tech stack? Let’s explore.
Direct Selling Downturn: Static CRMs Are Probably Dragging Your Profits Down
According to the “Complete Guide to Direct Selling Software 2024”, there are only a few direct selling-specific CRMs in existence, and many are for purchase by distributors themselves, rather than companies. Those platforms that do include CRMs are not noted for this technology, which for the most part seems to be more or less a Rolodex of contacts for distributors.
Now, normally this wouldn’t be such an alarm-raising problem. But last year, direct selling slumped. According to the Direct Selling Association, sales were down about $2 billion USD, while the industry experienced an 8% decline in the total number of distributors.
Researcher John D. Fleming of Ultimate Gig found that last year, only 3% of gig workers were self-described direct selling distributors. That’s down from 6% in 2020.
In order to resist this downturn, direct sellers have an obligation to do all they can, surveying all options, to enable distributors to perform at their best. Quite often, direct sellers deploy distributor CRMs that act as glorified Rolodexes. They’re static systems that list contacts to whom the distributor can reach out. Furthermore, they’re not integrated into larger systems, so even if they had deeper capabilities, they don’t have enough data to make them effective. At Rallyware, we see this in new customers. When they first implement Rallyware, they sometimes don’t know to what extent having static CRMs has hobbled distributor sales growth. Which is understandable: it’s not something we’ve talked about much in our industry.
Smart CRMs present direct sellers with a different way of enabling distributors. Such CRMs are built to actively help distributors maintain and develop relationships with more customers over time, while making business-building easier on the individual level. Today, direct selling enterprises have to find a way to take their “enablement game” a notch higher, and create not only more knowledgeable distributors, but distributors who are better able to build businesses autonomously.
Smart CRMs are an advance in exactly that direction.
Tech Briefing: How Does a Smart CRM Work?
What exactly is a smart CRM?
Each action in a smart CRM is targeted to drive sales performance in a manner that makes sense for the individual distributor using the system. Where static CRMs are useful for manually managing contacts, smart CRMs are automated to help the distributor acquire new customers through outreach strategies, and then nurture those contacts into long-term relationships and repeat sales. They intelligently suggest what the distributor should do next to develop the relationship further.
Let’s say that Lisa is a distributor, and her new customer Joan bought a face cream from her five weeks ago. The smart CRM will suggest a series of actions for Lisa to perform in order to persuade her to purchase more creams, and even expand her cart to encompass other kinds of products in the future. For instance, it might suggest that Lisa contact Joan after X amount of weeks about a refill, or send her a video on how to use the creams for maximum effectiveness, sharing product knowledge and showing authentic care.
The “smartness” refers to the technology by which that series of actions gets determined, which combines external data sources (for instance, commissions and payment systems), Lisa’s past activities and performance metrics on the platform, the behavior patterns of her affiliated company’s top performers, the “if-then” business rules set by this company, Lisa’s own decisions and goals, and more data types. This way, the CRM’s suggested actions are highly informed, relevant, and productive, which increases the likelihood Lisa will take them.
Here we’re already a long way from static CRMs. As opposed to a stagnant Rolodex, smart CRMs are meaningful and acutely helpful in building the distributor’s business.
Smart CRM Synchronization: Don’t Wall Off Your Tech
However, it’s not enough to have CRM technology if it doesn’t have the right data to guide distributors toward the right entrepreneurial actions. Otherwise, you risk having a static CRM that, if it provides suggestions to the distributor at all, provides irrelevant ones –a surefire formula for making them disengage from the tool. Instead, you want a smart CRM that suggests the right customer-related action to take at the right time using a variety of data inputs, behavioral models, and integrations.
When a smart CRM doesn’t stand alone but is embedded in a larger technological framework, multiple data sources feed into a single user experience that over time becomes maximally relevant to the distributor’s needs and goals as a long-term business-builder.
For instance, a 2022-23 Global Direct Selling Field Performance Report by Rallyware showed that in 2022, while so many direct selling enterprises suffered from a downturn, engagement for distributors using Rallyware increased over the previous year.
We saw firsthand that companies who used multiple data sources to inform each user-prescribed activity, making each action more personalized, saw a 30% growth in sales in the first six months after adoption, along with 26% more distributor engagement, which historically is positively correlated with retention and sales productivity.
Additionally, last year, we saw that actively engaged distributors had a 3x larger order size than less-engaged distributors. So even if the number of direct selling customers declines YOY due external market-wide factors, distributors can still push to increase basket size with the right suggestions from the smart CRM.
In order to make these suggestions personally meaningful and helpful to the distributor, it’s important to synchronize the smart CRM with other tools, rather than siloing it off; doing so makes a smart tool even more intelligent. Overall, for direct selling organizations that started with multiple tools integrated into one distributor experience, there was a 64.6% higher retention rate for the first six months, 5.3x higher than the benchmark rate.
What this data shows is that connecting multiple aspects of the distributor’s experience under a single platform increases sales productivity, as well as engagement and retention. This is because the suggested business-building actions for the distributor are as personally relevant–as informed by context, goals, and manifold data sources–as possible.
For instance, integrating sales incentivization and smart CRM data in a single platform means that Lisa’s suggested next steps for customer nurture might also remind her of an incentive she can attain if she sells X number of face cream.
Real Results: Actionable Reporting for the Boardroom
At a time of austerity for many direct sellers, this is particularly helpful for field sales and operations leaders at corporate HQ. Fully integrated smart CRMs produce real, measurable sales and recruiting results in the field. And with tools like executive reports and user dashboards to analyze these field results, field enablement leaders’ jobs get much easier. They can glean actionable insights from distributor performance, demographic, and behavioral data to see which initiatives and programs, what kinds of business rules and motivators, work to enable success.
Now they can prove to the boardroom the impact of the smart CRM on the company’s bottom line. This is part of the reason why customers have such an overwhelmingly positive experience with Rallyware as a digital technology partner.
As Kim Welling, formerly Program Manager for Global Sales and Operations at Nu Skin, put it, “For us, Rallyware became an out-of-box solution with the features we were seeking…brand customization, a level of gamification, leaderboards, API data integration, AI options, journey mapping, communication options and impressive reporting mechanisms.”
Conclusion: Three Steps to CRM Dominance
To summarize this digital strategy, direct sellers looking to boost their bottom-line results at scale can take three major steps.
- Adopt a smart CRM for direct selling: In a tight market, and with field participation falling, it’s important to provide tools that easily and automatically show distributors what to do to acquire and retain customers. This has the benefit of increasing sales and making productivity easier for distributors, helping encourage them to stay in the field.
- Embed the CRM into an all-in-one platform: CRMs that embed into larger, end-to-end platforms are preferable. Each action becomes as personally relevant for each distributor’s revenue generation: showing them what to do to make money, nurture relationships, recruit downlines, etc., based on their past actions with other, synchronized tools.
- Ensure the platform has actionable BI with unique insights: For this technology to be maximally effective for field sales and operations leaders, make sure it has actionable reporting and BI. That way you can assess distributor patterns to see what works and what doesn’t, perfecting your field enablement strategy for the future.
Though they might have been adequate in the past, stagnant CRMs aren’t enough to address the present realities of direct selling. Up your enablement game and explore your options for modern, dynamic CRMs that help distributors feel like business wizards–and demonstrably impact company revenue to make your organization more competitive. Here, the data speaks for itself. Rallyware’s all-in-one field enablement platform, which includes a smart CRM (which is also available as a standalone), is proven to lead to +53% sales growth, +67% year-one recruiting, +141% long-term retention, and 3X order increase.
Rallyware is the all-in-one performance enablement platform that generates profitable growth at scale for large direct selling companies. Request your Rallyware product demo today.
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