Growth is important in all industries, no doubt about it. In today’s challenging business environment, this is crucial at least to prevent complete failure. That said, growth is probably more important in direct selling than it is in many other industries. And this is especially so in acquiring new sales force members.
We generally call this activity “recruiting”. What we also generally do is to accept a high level of attrition in this industry as a given… Even from the day those direct sellers join the company. But does this have to be so? Maybe not! Let’s have a look at the common causes of attrition.
1) Personal
Some of those independent contractors who leave a direct sales company do so because they feel they just don’t fit in. Whether the primary motive initially is to pursue a hobby, a way of socializing, a part-time source of income or a full-time business, this can happen to anybody.
As long as this is the true reason and there is nothing else behind it, there is not much a company can do to reverse this decision. But what if in reality, there is something else behind that have caused this?
2) Upline
In some cases, what motivates the direct seller to quit is the sponsor or even the whole upline. The sponsor’s neglect in “training & leading” usually ends up with losing the newcomer. In other times, it is an unrealistic income expectation that is created purely by the sponsor.
Even if it is merely a clash of personalities between two people, I believe there is a lot of homework that can be done by the management, most of it being on the field training side.
3) Company
And yes, sometimes it is the company itself that is the cause of people’s leaving.
Poor customer services, commissions payments not made on time, rejecting product return requests for no good reason, abruptly cancelling promotions, frequent price and/or compensation plan changes, failures in communicating news updates and announcements in a timely manner… These are not unheard of in this industry and they definitely lead to higher attrition rates.
4) Dissatisfaction with the Opportunity
Another common reason is direct seller’s discontent with present or potential earnings that the company provides. It may be that the individuals might have set their own expectations too high. Alternatively, the company might be intentionally or unintentionally sending wrong messages. And in some cases, the compensation plan itself is poorly designed.
Leaving aside pure consumers, most of the field members are part-timers and hobbyists in direct selling. This is a fact. Therefore, probably it will never be possible to even get close to perfection. Yet I believe companies can make significant moves in that direction.
The first step here is identifying the true reasons behind quitting. Once this phase is over, it will not be too difficult to deal with each of them and make improvements. Don’t you think?
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Hakki Ozmorali is the Principal of WDS Consultancy, a management consulting and online publishing firm in Canada, specialized in providing services to direct selling firms. WDS Consultancy is a Supplier Member of the Canada DSA. It is the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki 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.
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