Direct Sales Success: The 3 Month Irony
I was talking with a woman who owned a direct selling company and she shared with me a staggering statistic:
“You can expect the MOST from your consultants within the first three months of business.”
I almost fell out of my chair. My experience has been quite the opposite in the industry, and to hear this from someone that lived on the corporate side of the fence was actually kind of shocking.
As a consultant, I’ve heard similar themes from my upline: “you really want to encourage your consultant to hit all her goals in her first three months of business, because then she’ll feel more successful.”
But when you put it that way, it sounds more like you’re doing her a favor, rather than saving your own business.
Anyone that follows me knows that my team is consistent and we all know our expectations – and our limits. When training recruits, I encourage them to focus on the long term relationship. I remind them they’re building a business – and I tell them that very few startups ever make a profit in their first two years! That means as a new consultant, they are shortening the profit curve GREATLY, because they are usually turning a profit after their first or second show.
And my turnover rate is incredibly low, compared to industry norms. In the four years I was with my last company, I had 7 consultants that went inactive and didn’t return to the business. More than half of them had serious life issues that prevented them from continuing on – and all of them went on to be loyal customers after the fact.
Do you know your turnover rate? As a true leader, you need to be looking at the statistics of your business on a regular basis. Turnover rate is a KEY indicator of how well your organization is doing on the whole, and how your team responds to your leadership style.
But that’s another article for another day. What concerns me today is the irony of the first 3 months of business.
One of my mentors explains that we all go through 4 stages of learning. The first is Unconscious Ignorance. It means we don’t know what we don’t know. This is essentially where we start before we become consultants.
Then we transition into Conscious Ignorance – where we know that there are things we don’t know. That’s essentially the first 3 months of business for a new consultant. They’re learning the comp plan, the products, how to do the demos, and their heads are usually swimming.
So what do we do? We tell them that “an idiot on fire is worth more than brains on ice.” Then we promptly send them ot the door, kit in hand, to start signing up other “idiots”.
No wonder they leave after 3 months.
If you’re running a real business – and expect a real return on your investment, there’s a timeline you need for training. Companies are getting better about this. They don’t just shove a manual into the hands of a new recruit and send them on their way. Now there are online classes, webinars, teleclasses and even local weekly trainings to not only instruct consultants, but also connect the consultants and keep them “plugged in” to the pulse of the business.
That’s a great start.
But what if we looked at changing the way we incentivize consultants in the first place? What if we offered longevity recognition or consistency recognition for more than the first 3 months?
Do you think we’d have a few more people sticking around and being productive?
I also think it’s imperative that we as leaders share these kinds of statistics with our teams for a number of reasons: first, because as business builders, we need to be clear with our teams about the reality of direct sales. Not everyone will stick around, and we need to be consistently attracting new business. Stop trying to snow your prosects and new recruits and lay it plain in front of them so they can truly make an educated decision.
This goes back to the “stop recruiting everyone with a pulse” idea I’ve talked about before.
When you train your team to realize that the first three months are critical because that’s when most consultants do the most work, you’ll have one of two scenarios:
1. Leaders will push new recuits to do more in the first 3 months, causing burnout and dissatisfaction – so they’ll leave.
2. Leaders will push new recruits to do more in the first 3 months, causing the recruits to feel more successful – so that they stay.
Either way, someone is doing the pushing, and someone else is being pushed. Sounds like a lot more work than it needs to be.
Instead, why not lay the facts out and encourage your team to recruit people that are already expecting a long-term commitment? Sort out the “quick bucks” from the “slow and steadies”. They might not hit all their 3 month objectives, but if they’re consisently adding to your bottom line every month, isn’t that better for the health of your team?
I know, I’m going against the grain here, but let me illustrate with a story:
I was in training as a financial advisor. We were “recruited” to the company with a pitch about how great it is to own your own business, and that the company gave us “free leads” to work to grow our business. We were promised a training period where we’d be paid to study, learn all we could and start developing a client base.
We were NOT told that after our training was complete we’d be subjected to 10-12 hour work days, cold calling leads from 2 years ago, and that we had 12 weeks to start making money off our clients or we’d be booted from the company.
Kinda puts things into perspective, don’t it?
Needless to say, about 70% of the trainees I started with were long gone before the 12th week. A handful managed to find other employment, but most went on to different careers entirely.
This was a case of “Carrot and Stick” without the carrot.
What if, instead, we were given the facts, up front, about the job we were expected to perform. Would there have been fewer applicants? Absolutely. But would the applicants have a better level of expectation? Absolutely.
The added bonus is that the company would have spen fewer dollars training recruits in the first place. That money could have then been used to extend the 12 weeks to 15 or more. Or better yet, it could have been used to reward the advisors for consistency in their business – for doing the income producing activities consistently even if they weren’t always bringing in money.
Encourage the behaviours you want to see repeated. Consistency and repetition are the keys to success in direct sales.