In a previous post, I discussed Pareto’s Law, the 80/20 Rule. And often, as was this case with this post, the comments come back like this:
“I *know* this. It’s just hard to put into practice.”
So I wanted to take a closer look at Income Producing Activities for Direct Sellers, as I research your most burning questions for an upcoming free teleclass for my subscribers.
Many direct sellers don’t even know what their income producing activities (IPA) really are. Simply defined, IPA are any activities that directly generate income for you.
Most consultants think of this as booking, selling and recruiting. Most consultants would be wrong.
Let’s look more closely at each of these activities and see if they meet our simple definition.
Booking parties is time-consuming. Even at the show, we’re dropping 3-10 booking seeds to get 3-4 shows added to our calendar. When we look at industry statistics, 20% of your shows will cancel or reschedule. But in reality, it’s not the booking that generates the income. Any consultant who’s failed to follow up with a hostess, or forgotten to mail the invitations, or didn’t confirm the booking has invariably lost a show (or had a mostly unprofitable one). Therefore it’s not the act of BOOKING the party that produces the income, but rather hostess coaching and follow up that produce the income.
Dozens of industry trainers will offer you host coaching programs. The best one I’ve ever seen – and use myself, is Deb Bixler’s Create a Cash Flow Show – which virtually guarantees you’ll have a $1,000 show every time you do a party. And yes, out of full disclosure, that’s my affiliate link. It give me credit for referring you to her website. I only recommend products I use and love. Deb’s is one of the best on the market in terms of content and delivery. Her no-nonsense, build it like a real business approach is in complete alignment with the way I run my business, and she’s a trainer of integrity.
So booking is NOT an income producing activity, per se. Hostess Coaching is. And often, this is the area in which we suffer most.
Selling is quite obviously an IPA, since the result of selling is that you earn income. Whether you’re doing custmer care follow-up, reorder calls, or the show itself, I think that IPA is fairly self-explanatory.
Recruiting can be an IPA, but you need to check your company rule book. In nearly all direct selling companies, no one is paid for recruiting someone, but rather, is paid when that recruit meets a performance goal – selling a certain amount, getting “qualified” or some other performance based measurement.
In fact, many companies have strict rules AGAINST compensating a person for adding recruits to their team to avoid being considered a “pyramid/ponzi scheme”. Ponzi was notorious for paying people in the pyramid a portion of the recruiting fee and there was no real product to sell – which ultimately meant the pyramid would crumble when people stopped signing up. The DSA and the federal government have some pretty strict rules about this.
So recruiting in and of itself is not an income producing activity, rather the income is produced based on team performance. But how do you encourage consultants to perform? Coaching. Thus COACHING your team is the income producing activity.
So aside from the actual sales process, the bulk of your income is derived fom your coaching activities – either with your hostess or with your team.
But where are we told to spent the bulk of your time? Booking, Selling and Recruiting.
Don’t get me wrong, these are important activities, but when it comes to the 80/20 rule, Booking and Recruiting (also known as prospecting) shouldn’t take more than 20% of your business time (they likely take up 80% of your time now). The remaining 80% of your business time should be focused on actual Income Producing Activities: SELLING and COACHING your hostesss and teams.
Yet this is the very complaint I hear over and over again: I don’t have the TIME. Thus the need to streamline, automate, delegate and eliminate activities that don’t fall into the most productive parts of our business.
Freeing yourself to focus on IPA isn’t an overnight task. It takes time, but is critical to the overall success of your business. Top Direct Sales Leaders don’t try to do it all themselves. Neither should you. Begin today by looking at what you could delegate, or things you know you’re not good at that you could have someone else handle for you.
Take time to develop the list. Eventually, put a plan in place to start delegating. You’ll free up your time to focus on making more money, which will eventually turn into freeing up more time because you won’t need to work so much!
Want more help understanding IPA and how to apply it to your business? Use this form to Ask Lisa your questions for an upcoming free teleclass about Income Producing Activities for Direct Sellers. The only certified Direct Sales Marketing Coach in the WORLD, Lisa Robbin Young can help demystify the business side of running your direct sales business. Visit her free online community for direct sellers today.