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5 Reasons Why Direct Selling Companies Fail

Direct selling can be a tricky business strategy for inexperienced newcomers. For this reason, around 70 percent of people will fail in the first 18 months of trying direct sales. If you’re planning on shifting your business to focus on direct selling, you need to be aware of the pitfalls that people often fall into. Knowing this will help you to succeed in direct selling and make a profit off of your sales. To help you out, here are five reasons why direct selling companies often fail, and what you should do to avoid this.

Poor or Mismanaged Leadership

One of the main reasons that direct selling companies often fail is because of poor leadership. Without a good leader, direct selling cannot thrive and grow a business. A good leader can make or break a direct selling company–they act as a mentor, and guide you to make the right decisions in your business. Some of the most important qualities in a great leader are:

  • Making intentional decisions
  • Clearly communicating expectations with their team
  • Being accountable
  • Leading by example
  • Measuring performance
  • Providing feedback and areas of improvement
  • Allocating talent
  • Asking questions and problem solving 

However, if your leader does not possess these qualities, your direct selling company will ultimately be unsuccessful and cause more harm than good. If you are a direct sales leader, there are ways that you can motivate your team to do a good job that will lead to greater chances of success. 

Help Your Team Feel Successful 

Making sure that your team feels that they are valued and successful is a great way to ensure that they will do good work. If your team doesn’t feel that they are successful, they will be more reluctant to continue working in direct sales. Adversely, when your team feels that they are doing a great job, they are motivated to do even better. Consider congratulating or awarding team members who are doing an exceptional job–this mark of achievement will inspire them to continue working hard. 

Encourage Team Effort

It’s unrealistic to expect everyone in your team to reach your high goals. However, don’t make these employees feel bad for not achieving the high status that other employees have–make every team member feel valued and appreciated for their hard work. Congratulate them for their work, even if they are not reaching the same levels of other coworkers. Let them know that they are an important part of the team. Encourage them to continue making an effort–even if their sales aren’t great this time, that doesn’t mean they can’t be next time. 

Celebrate Significant Occasions

When your team member has a special event in their life, such as their birthday, marriage, or the birth of a child, be sure to congratulate them. Show your team members that they matter to you and that you care about their lives outside of a work environment. 

Talk Less, Listen More

Don’t feel like you are responsible for fixing every minor thing as a leader. Your team members may have the answer themselves, and it is important that you listen to them and value what ideas they have. Don’t feel like you always have to be telling your team members what to do–oftentimes, letting them choose their next actions will motivate them to continue doing good work. 

Cheer Your Team On

Be a cheerleader for your team. Stay positive, even if things are tough, and encourage your team to keep working hard. If you have concerns, you can acknowledge them–but be sure to focus more on the positives. Remind your team members that you appreciate their hard work, and be grateful for them. 

Lack of Funding

Funding is another big reason why most direct sales companies fail. Simply put, your company not having enough funding can lead to problems down the road in direct sales. If you are struggling with funding your direct sales business, however, this does not mean that it will ultimately fail. Look for great ways to improve your lead generation–by doing this, you will get more people interested in your company, and potentially people to help fund it. Some common problems you may run into with lead generation include:

  • Inability to generate a high volume of leads
  • Not delivering high-quality leads
  • Not having a strategy of what to do when you’re bringing in leads
  • Lead generation method is failing to bring people in

If you’re not generating leads, then you’re not getting any real funding to continue your direct sales business. Make sure that you are focusing on the most important ways to generate leads. 

Know Your Target Audience

Know who your customers are before you start looking for leads. If you’re targeting the wrong audience, then you will ultimately not generate any funding. Knowing your audience will give you an idea of what you can do to draw them into your company. 

Have a Website

Because we live in a digital world, having a digital footprint is more important than ever. To connect with people, you need to have a website. Having a presence online will help you generate leads that turn into sales, which then turns into funding and profit. 

Utilize Social Media

Using social media is one of the best ways that you can connect with your audience today. Social media gives you the chance to connect with thousands of people, and some of these people will undoubtedly turn into leads. Use social media to show potential customers why your products are unique and why they should be interested in purchasing them. 

Use Email Marketing

Using email marketing is another way to make your presence online known. Email marketing can generate tons of leads for your products, and can give you a way to direct prospective customers to your website. Having a strong email list will allow you to generate more leads.

Make sure that you are also keeping track of your inventory when you are working in direct sales. Know what you have and what you don’t, and market your products appropriately. Don’t spend too much of your money investing in a huge supply of products–this will likely be a waste.

Consider Your Supply Chain Strategy

One of the problems that may be leading to your direct sales business failing is that your supply chain strategy isn’t effective. In a direct sales business model, the supply chain reduces intermediaries to sell directly to consumers in a non-retail environment. A direct sales business model cuts off the typical steps that you would see in a supply chain model. Network marketing is important in direct sales, and involves the supply chain. Direct sales is powered by a supply network that works to meet the demands of individual consumers in an efficient way while leveraging economies of scale. One of the reasons your direct sales company may be failing is because the supply chain model is not providing visibility, control, or math-based decision making at key points during the supply chain. 

One way that you can help fix your supply chain system is by diverting inbound products at ports of entry to match up with real-time shifts in demand. This gives you the opportunity to expand your customer base; because the supply chain is always changing, it is important that you keep up with it rather than sticking to a rigid model. Remember these three things when you are planning your supply chain strategy: 

  • Scenario planning is pointless in today’s economy–no one knows what the future will look like, so don’t waste your time planning for complex scenarios.
  • Traditional forecasting will not give you an accurate forecast of the market.
  • The future is uncertain–for this reason, you need a new approach in your supply chain management to be successful. 

Keeping Up With Technology

Technology has grown to be increasingly important in the direct sales business, and not utilizing all of the technology at your fingertips may be part of the reason that you are not seeing success in your direct sales company. 

When you’re forecasting your company, always keep direct selling software in mind. Utilizing direct selling software is one of the best ways to ensure that you will see success in your company. Though direct selling is traditionally done door-to-door, this is no longer the case with the rise of technology. Some advantages of direct selling software include, but are not limited to: 

  • Optimal business performance–direct selling software can help maintain a proper procedure of planning and monitoring performance.
  • Streamlined business operations–direct selling software ensures that you will have better collaboration and coordination between everyone in the company.
  • Better integration of systems–direct selling software facilitates the integration of company systems and resources.
  • Cost-effectiveness–direct selling software is an economic solution that does not drain you of your money. 
  • Higher productivity–management facilitated by direct selling software leads to increased productivity.
  • Motivation of the sales force–direct selling software has many advantages that add up to make work easier for the company.

Aside from utilizing direct selling software that is available today, it is important to still remember to make your presence known online. Have a website and social media pages, and use these to promote your company and the products that you are selling. Email marketing is another way to ensure that you are generating leads and that you are drawing in prospective or returning customers. 

Direct selling businesses that are not using technology are putting themselves at a significant disadvantage compared to companies who are using technology. Technology is one of the most powerful tools at our disposal today, and most of your company’s leads will likely be generated through technology. So make sure that you are getting a head start when starting your company by making your online presence known–you are much less likely to fail if you do so. 

Trust and Believe in Your Company

You won’t find success in the business of direct sales if you do not trust and believe that your company is capable of using this method of selling. If you go into your direct sales business with a negative mindset, this is bound to carry over to your company’s overall performance. Keeping your hopes for the company high and your thoughts positive will give you more motivation to keep working on the company–if you go into the business with a negative mindset, you are setting yourself up for failure. 

Many direct selling companies fail because they expect that they will fail. The numbers for how many companies are successful in direct sales can be troubling, and they may be off-putting if you’re just getting into the business model. However, you cannot let these numbers deter you–doing that will only ensure that you will not find success. Even if things start off slow, believe in the strength of your business and the value of the products that you are offering. Trust that your company is good enough to be successful. Even if it ultimately doesn’t work out, you will know that you put the best effort that you could into the business. Always stay positive, no matter how dire things may seem. 

Remember, it is normal to feel discouraged when you see the numbers–but you have to pick yourself up, and not let this get you down. Trust yourself and the employees who are passionate for your company and want to see it succeed as much as you do. With the right mindset and enough effort, you can be successful in all that you set out to do.

When you are starting your direct selling company, make sure that you are aware of these common pitfalls that many businesses run into. Don’t feel discouraged because you are afraid that you will not be successful–by being aware of these factors, you can build your business up to be strong, successful, and powerful.  If you’re ready to to transform your Online Business with the right assets contact us today!.

How Social Selling Can Grow Your Business

Social selling, specifically during the pandemic, has evolved to become one of the most effective ways to create awareness and drive traffic to your business. Direct sales companies specifically can benefit from social selling and the use of social media. As more companies begin to focus on social selling as a model for their business, it’s extremely beneficial to you join in as a way of keeping up with your competitors.

If you want to be a leader in your industry, then it is important that you utilize the tools offered by social selling to continue growing revenue and publicity. Because social media is such a huge presence in our world today, it is vital that you learn how to use it to benefit your business. If you’re thinking of having your company focus on social selling, here are some important things that you should know about the practice.

What Exactly Is Social Selling?

Social selling is a relatively new approach to selling that gives direct sellers the opportunity to target their prospects and establish rapport through existing connections by using social media platforms. Network marketing can be done through utilizing social selling to build relationships. It involves the practice of utilizing social media channels to connect with prospective customers and engage with potential leads, allowing your business to reach its sales targets.

Social selling is not the same as simply bombarding strangers online with information about your company and your products, and it is not solely about getting new contacts. With social selling, you can make the interactions that you have with prospective clients meaningful, and can show that your brand is trustworthy and loyal.

How Social Selling Has Evolved

Social selling has evolved over time as people worked to figure out ways to utilize social media for their direct selling companies. Those who adopted social selling early on flooded their market contacts with a variety of social media posts in an attempt to make social selling work.

As the practice has continued to evolve over time, a wide variety of approaches for social selling has become available aside from the typical social media posts. Some examples of these approaches include companies doing Live Sales when they’re selling on-hand inventory or unboxing products on social media. Anything that gets the audience interested and engaged and that drives traffic to your company can be considered social selling.

The Social Selling Index, Or SSI

The social selling index, introduced by LinkedIn in 2014, is a metric that is used to measure the impact of a brand’s social selling. There are four components to establishing this score. The score looks at whether you are:

  • Establishing a professional brand with a well-managed LinkedIn profile.
  • Finding the right people on the platform.
  • Sharing relevant and interesting content.
  • Building, maintaining, and strengthening relationships.

If you are using LinkedIn for your business, you can find this score by navigating to your Social Selling Index dashboard. This will help you understand how your score could be improved and ways to make it better.

Make it Easy for Your Customers to Participate, Engage, and Shop

There are approaches to social selling that you should be taking to ensure that your sales remain steady and continue to grow. The first one of these approaches is selling drop ship inventory, which is the most common focus of social selling. This allows your company to drive customers to replicated websites and shopping carts to complete their purchases.

Make sure your e-commerce site is like any other shopping site. It should have ratings and reviews, the option to use wish lists, the ability to search products by name and categories, and suggestions for other products the customer may like based on what they buy.

The other approach to social selling is selling on-hand inventory. The Sales Consultant would be selling inventory directly to the customer, collecting the payment, and shipping the product. This is a practice that has evolved over recent years. If your company is focusing on this model, make sure that you are considering the following questions:

  • How is awareness being created for the social event?
  • How is an item being claimed or sold through the live event?
  • How is the item paid for after being sold?
  • How are the items shipped to the end customer?
  • How does corporate maintain visibility on these sales?

Make sure that you continue to assess the customer experience to make the best experience for future shoppers. Consider attending one of these live events yourself as a customer so that you can understand what they think and feel about your company and the events that you host.

Use Attraction Marketing

With social selling, you want to attract people who want to socialize with your company. Using the power of attraction in your social media presence is an important aspect of social selling. Some ways that you can use attraction marketing with social selling for your direct sales business include:

  • Making sure that your social media profiles are optimized and completed across all platforms, not just some.
  • Making it simple for your audience to connect with, and interact with you by following you on all platforms.
  • Using attractive and compelling imagery in your profile and posts.
  • Being real and authentic, but still professional.
  • Giving glimpses into your business and private life to allow your audience to build a level of trust with you.
  • Letting your personality show through your posts so that your audience can feel like they know you.
  • Using storytelling in your social media posts to help draw your followers and readers in and to attract new followers.
  • Speaking to your audience like they are your friend. You want to establish a relationship with them, so being friendly is crucial.
How Social Selling Can Grow Your Business

Why Should My Business Care About Social Selling?

There are many reasons why you should care about social selling. If you are still unaware of the value that social selling has to offer, here are some of the best reasons why you should begin the practice:

  1. Social selling works. LinkedIn found that businesses who are leaders in the social selling space created 45% more sales than brands who are not leaders in the social selling space. Businesses that prioritize social selling were also 51% more likely to reach their sales quota. 78% of businesses that use social selling outsell businesses that do not use social media in any capacity.
  2. Social selling can help your business build real relationships. Because of the pandemic, a large number of business events had to be cancelled or postponed. Networking has largely shifted to being online, so it is important that your business adapts to this new change. Social selling gives you the chance to connect with prospective customers without having to meet them face to face. Engage potential customers on social media, and use social selling to reach out to audiences who are already interested in what you are offering. Build an authentic connection with this audience–this will turn into loyalty.
  3. Your customers and prospective customers are already interested in social buying. Within the last six months of 2020, 25% of Americans aged 18 to 34 made a purchase through social media platforms. Because so many people use social media, it is by far one of the best ways to market your products and generate sales.
  4. Your competitors are already doing it. If you want to keep up with the competition, you should definitely get started on social selling. Using social selling means that you are staying competitive and keeping your name relevant.

Integrating Social Selling With Back-Office Tools Available to You

Depending on whether you use a drop-shipped versus consultant fulfilled approach to social selling, there will be some different tools and technologies that you should be leveraging. As you begin to identify these tools and implement them, you should be making it easy for your Consultants to access these tools–no matter if they are tech-savvy or not. Make it as easy as you possibly can for people in your field to know the tools to use and the selling processes to follow.

Make Sure Social Promotion Marketing Content is Readily Available and Easy-to-Use

It is important that you implement easy-to-use ways for your field to share consistent social content with customers. As companies begin to evolve, there is a growing desire to implement a stand-alone app that simplifies sharing content. When you are getting started, you should include simple ways to share and promote your content. Make sure that your sales team and marketing team is collaborating so that you can have sustained adoption and growth.

How Does Social Selling Ultimately Benefit the Company?

Social selling benefits the company in many ways. The most important of these ways being:

  • Increasing brand visibility. By having more employees sharing content and optimizing their social profiles, their networks are able to click and engage. Oftentimes, people who are not familiar with the company will be able to discover it through social selling.
  • Drives more leads, and higher quality ones. The quality of your leads will increase as brand visibility increases. Having a team of social sellers ready to work for your business gives them the opportunity to educate their social connections.
  • It boosts web traffic. As brand visibility continues to increase, more people will be inclined to search for information on your company.
  • It boosts sales results. Social selling is a good way to increase deal sizes and drive better win rates, resulting in better revenue for your company.
How Social Selling Can Grow Your Business

The Importance of Communicating With Your Field

Make sure that while you are mapping out your social selling strategies and evaluating your tools, you are also tapping into your field Consultants to get a better idea of their needs and concerns. Follow these stages of adoption:

  1. Discovery. Engage with your field to help you identify the tools you need and to figure out what Consultants are seeing in the field.
  2. Pre-launch. As you begin to use and integrate solutions into your social selling model, involve some influential Consultants into the beta testing phase. These people will help you drive the new tools’ utilization.
  3. Launch. Create training documentation with your Field Advisory Board’s input and hold training webinars to help showcase these tools and demonstrate how to use them.
  4. Post-launch. Continue to encourage use of social selling by providing tips and success stories, and establish a process for Consultants to share feedback.

Understand Financial and Resource Investments Required for Launching Social Selling Tools

When you are evaluating solutions, look at the overall costs from a corporate perspective. Consider what tools are needed by your field, what you are paying monthly to run your business, and if there is a more unified solution. Make sure that there is an aligned focus from corporate upon implementation from every part of your business.

Social Selling Allows for Better Customer Service

It is important that, when you are operating your direct selling business, you are keeping up with good customer service. Even after you make the sale, you should be working to provide your customer with the best service possible.

You want to be able to retain customers after you have made the sale, and this starts with good customer service. 68 percent of customers leave companies when they feel that the company does not care about their business anymore. Social selling makes it easy to communicate with your customers and improve your customer service. Put in the effort to make your buyer happy and to help them solve their issues.

Social selling is becoming increasingly more important to the success of businesses, and can make or break your company. It is important that you understand all of the ins and outs of social selling so that you can maximize profit and get your business out there. By following these tips and understanding social selling, you can make sure that your business is fostering relationships with new and returning customers.
You don’t know where to start, Schedule a Free Strategy Session today and let’s work together to create a unique strategy for your business.