In today’s competitive business landscape, growth is essential for survival in any industry. However, when it comes to direct selling, growth takes on an even greater significance, particularly when it comes to managing the sales force. The direct selling industry often accepts a high level of attrition as inevitable, even from the moment independent direct sellers join a company. But does it have to be this way? Let’s explore the common reasons behind attrition and how companies can mitigate it.
1) Personal Reasons
Independent contractors sometimes decide to leave a direct sales company due to a personal disconnect. Whether their initial motivation was to pursue a hobby, socialize, find a part-time source of income, or establish a full-time business, personal reasons can lead to departures. If the underlying cause is genuinely personal and not related to the company, there may be little a company can do to change this decision. However, what if there are deeper reasons hidden beneath the surface?
2) Upline
In some cases, the decision to quit is influenced by the sponsor or even the whole upline. A lack of proper training and guidance from the sponsor often results in new recruits leaving the company. Sometimes, it’s unrealistic income expectations set by the sponsor that lead to disappointment. Even when it’s a clash of personalities, there is room for management to improve, particularly in field training and support.
3) Operations
And yes, sometimes, it’s the company itself that pushes people out the door. Poor customer services, delayed commission payments, unexplained refusals of product return requests, sudden cancellations of promotions, frequent changes in prices or even worse, in compensation plans, and failures in timely communication of news updates… These are not unheard of in this industry, and they definitely lead to higher attrition rates.
4) Opportunity
Another common reason for direct sellers leaving is their dissatisfaction with the present or potential earnings that the company provides. This could be due to the individual setting unrealistic income expectations, or it might result from mixed messages sent by the company. In some cases, the compensation plan itself might be poorly designed, causing frustration and disappointment.
5) Products
Mediocre products, over-priced offerings or items that fail to meet the expectations created by marketing claims are often to blame for departures. Ensuring that products align with their marketing promises and are demanded by the end-users is crucial for retaining satisfied independent sellers. Additionally, it is always advisable to offer a wide range of products so that direct sellers can meet a variety of customer needs.
6) Digital Presence
In today’s digital age, a strong online presence is no longer a luxury but a necessity. A lack of digital tools, platforms and resources can signal to direct sellers that the company is out-of-date or unwilling to adapt to modern business practices. It is of the utmost importance that companies should follow and adopt the tools that will facilitate independent contractors’ ventures.
7) Reputation
Negative publicity has always been a significant factor leading to departures. Who would want to be associated with a company where another adverse news story breaks every day? Direct sellers expect their companies to have a good reputation. They are the ones representing the brand to their customers and to potential direct sellers on a daily basis. Obviously, they want to be proud of their companies.
It is crucial to acknowledge that most field members are part-timers and hobbyists. Achieving perfection here may be an unrealistic goal, because not all departures can be prevented. Yet companies can make meaningful efforts to minimize attrition.
The first step in this direction is identifying the root causes behind quitting. Once this phase is complete, companies can address each issue and make the necessary improvements to reduce attrition rates. The ultimate goal is to create an environment where independent direct sellers feel supported, valued, and motivated to continue their association with the company. By recognizing and mitigating the reasons for departure, businesses can increase their chances of retaining a dedicated and successful sales force.
…..
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 the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki Ozmorali 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.
SHARE THIS ARTICLE:
Another great article. I really do appreciate your content.
In our research and working with so very many large companies worldwide, we have identified the over arching reason why distributors, especially new ones, leave their business and company… We call it the “dollar per hour proposition” which boils down to a question every distributor asks themselves frequently… “is it worth my time?”. If not, they spend less time on their business or just leave. If it IS worth their time, they are much more likely to stick even when things are not ideal. I believe that this one issue is greater than all other reasons combined. Why do some companies have less than 10% annual retention while a few others experience above 50%? In every case where we have data to analyze, the reason has been the dollar-per-hour proposition. How much do I make for the time I spend on my business?
Thanks once again for all you do!
Thank you very much for your input, Dan!