March 01, 2017
The Core Principles of Successful, Scalable and Sustainable Direct Selling Companies
by Paul Adams
Throughout our 30 years of business in the direct selling channel, we’ve been on a never-ending search to identify the consistent elements that successful companies have in common. Whether large or small, legacy or brand-new, we’ve looked for those “core principles” that elevate and sustain their growth and viability. Observing companies over such a long period of time has given us insight in both good and bad economies, as well as opportunity to evaluate those that have come and gone.
Two years ago at SUCCESS Partners University, we handed out our first published version of our white paper on these Core Principles. After another year of watching and learning, we’ve refined them even further. We continue to find great value in assessing the implementation of these principles, as we have observed that fast-growth companies tend to engage at least three to five of these principles well. Below are a few thoughts on these Core Principles for your consideration.
One of the key elements we have realized is that all too often companies lack a clearly defined strategy. It seems obvious, but frankly, it’s easy to jump over this important building block and start working on everything else. In the end, however, it can be wasted time, because before you can start to apply each of the principles, you must have a strategy that defines where you are going to play, and how you are going to win. Then, and only then, can each of the other Core Principles be designed to support your overall strategy.
It is also a good reverse exercise: If you find that these Core Principles become difficult to consider and refine, it could be that your overall strategy is the sticking point.
The Core Principles Wheel
One of my favorite words in business is focus. We’ve also learned it is one of the most difficult concepts to adhere to. Our experience in consulting with companies has been that the ones with the most sustained growth also have the discipline to focus, prioritize and say no to many, many interesting things.
Without the discipline of focus, a phenomenon we call message drift can easily occur. It’s human nature. People get distracted. Add to that technology and the availability of information, and it becomes harder and harder to maintain focus. From our perspective, however, focus is a must-have. Focus is also something that can be lost, so it’s important to revisit it from time to time.
You could actually maintain both a company brand and a clear product identity within your company. Each needs the appropriate amount of attention in order to differentiate yourself from the competition. Great brands come from intentional forethought and execution. They do not appear accidentally.
You have to have customers. It’s not optional. It’s the lifeblood of our business. They are the ones that continue to buy products because they like them—not because they are part of a compensation plan. The focus of your company also becomes less about a popular product trend and more about what customers actually want. This is what builds a business.
All sorts of ideas have taken hold among companies in the channel to maintain their customer base. Pretty common programs include “3 and yours is free!” and rewards for being an auto-ship customer.
There are tons more options for customer acquisition. I encourage you to explore them as much as possible to get and keep customers.
Think of field perspective as your lens. When making decisions, are you making them with the impact on the field in mind? Are you seeing things from the perspective of the field and considering how your decisions and initiatives will affect behaviors?
It is interesting to note how many of the fast-growth companies today have former field leaders at the helm or somewhere near the very top of the organizational chart. We don’t think that is a coincidence. Everyone is easily distracted these days, but our field is a great volunteer army and can decide to do a million things other than work their business. It is more critical than ever to understand their motivations and where they are coming from.
Recruiting and Onboarding and Retention
When we first published these ideas, we had one core principle called Recruiting and Retention. In fact, this is the No. 1 issue for most of our clients and for many in our channel. But we’ve begun to think differently about Recruiting, and see it now as a separate function from Onboarding and Retention.
Recruiting a new person, and then bringing them on board and helping them to become active, are actually separate activities that need appropriate attention from the company. In attracting people to our companies and recruiting them, we need to be realistic. We need to be authentic. We need to stay away from setting unreal expectations and painting a picture that is not attainable. Not only is this not needed, it should not be tolerated.
Once a person is recruited, the follow-up and instruction should quickly move to onboarding and retention. In other words, introduce them to the business and make it seem simple and doable by providing the most basic training possible. The first hours and days in the business are crucial. There should be lots of clear guidance and handholding. Get the starter kit there fast so none of the excitement dies.
If we get this right, the distributor may stay on and earn a little money, and a little money makes a big impact. Working with Infotrax, we’ve learned that if someone receives a one-time payment of $200, there is a 70 percent chance that person will purchase products every month for at least the next six months.
Everyone knows they need a solid message—something relevant and important. Something easy to say and share. It has to be super-simple for them. Even in established companies, this takes time and effort to get right. Often, when a client comes to us with a new product, or a new company, we spend 10-15 hours consulting directly with executive teams to identify, refine and simplify their messaging.
Your message is a critical part of your recruiting process. After you get that right, focus on the tools and systems you use to spread that message. In other words, have a way—a system—that you teach everyone the sharing process. Don’t leave it to chance for someone to learn how to do this, especially when they are new.
Keep it simple. Keep it clear. Don’t doom it from the start by making it complicated. Then, provide the tools to maximize the system. The tools tell the story for you. Yes, it’s 2017, but I can tell you the physical tools still work. Magazines, DVDs, CDs, other printed items. They all work if you use them within a system. And without them, your company’s message is at risk of being diluted or lost.
We all know the importance of events for our field. This is where your company comes to life and your brand and culture are exemplified in the actions onstage, through the visuals, and in the feelings you evoke. It’s also a place to build community and belonging, a place to provide training and motivation.
An event is special and impactful. It is your time to inspire, motivate and recognize in a meaningful and long-lasting way.
Keep it simple and start at the beginning. When someone signs up in your business today, what do you want her to do today? Not tomorrow. Not next week. Nobody gets to be a high performer on Day 1, 2 or 3. But, they can surely be lost on Day 1, 2 or 3 if they are not handled with care and given appropriate training. Give enough, but not too much!
Keep in mind there are different types of training. We’ve defined a few areas and know there are layers of topics underneath each. It’s important to combine efforts so that there is a cohesive delivery across all media and technology platforms. This is a great place to use technology to your advantage.
This has so many layers to it that we could spend an entire article on this topic alone. I suspect most executives have read something by Jim Collins, so you know that getting the right people in the right seats on the bus is crucial. Once you find the right person to join your corporate team, do you have a good onboarding and training system? How about recognition and retention planning? We are really glad to see this topic gaining traction throughout the direct selling channel.
The way we see it is simple: Technology can either enhance or detract from the other Core Principles.
If done well, technology makes each of the other elements better. It touches them all. Think of it as a multiplier—it increases the efficiency and effectiveness of every other principle. However, if sub-par or outdated, it actually detracts from the effectiveness of each.
We call personal development the industry’s “X-Factor” because, honestly, the growing companies do this better than just about any organization inside or outside of the channel.
Personal development, like technology, is a multiplier of all your efforts. Actually, I like to think of it as a multiplier on steroids. If your people are growing and developing their skills, then performance, attitude, output, and engagement are all growing.
Culture is truly the culmination of all the little things you do with the Core Principles. Culture is not an accident; it happens by design. All points need to lead to a common goal of what you want your company to be. Culture happens with intention. It happens with every decision you make and every interaction you have.
You cannot assign a single person to “take care of culture.” It is everyone’s responsibility, and it starts at the top.
You, the Corporate Leader
The corporate leaders in the home office are at the center of all of this. How your business conducts itself will ripple out from you, the leaders and the example you provide. People will watch and observe you. They will see if you are genuine or simply using the “do as I say… not as I do” approach. However, if you do accept the challenge as the leader of this, the impact on your organization can be truly transformational.
Throughout this channel, there are great examples of fast-growth companies that have powerful personal development initiatives and leaders. These companies have created a very special bond between the leadership, the employees, distributors and the companies themselves. It’s powerful.
We’ve gathered these Core Principles together after many years of studying what works and what doesn’t work within our channel. The companies that focus on mastering three or four of these Core Principles and pay close attention to the remaining are those that build successful, sustainable and scalable companies. Set your goal to join them in 2017.
Paul Adams is the Senior Vice President of Strategic Marketing at SUCCESS Partners, a consulting firm that offers services in branding, messaging, product strategy and market expansion.