7 Critical Success Factors for Direct Selling

When speaking with executives and sellers in the direct selling industry, we’re often asked:

“You’re looking outside-in at our market, working with many different types of direct selling organizations around the world. What are some common success factors you’re seeing?”

As we do with all questions from our partners and customers regarding market conditions and opportunities, we listen very closely; we seek clarification where we aren’t clear; we discuss internally with our subject matter experts; we discuss externally with our trusted advisors; we arrive at a Point of View that we are comfortable sharing.

Following is our current point of view for the 7 critical success factors for direct selling organizations:

Preface

Direct selling and multi-level marketing (MLM) firms are facing a rapidly changing landscape, making it more important than ever to identify and focus on the critical success factors that will drive growth and profitability. In this blog post, we will explore seven key areas that are essential for the success of any direct selling or MLM business: quality products, innovative marketing and go-to-market strategies, strong leadership, financials, networking, training, and technology.

7 Critical Success Factors for direct selling Organizations - Our Current Point of View

1. Quality Products: The foundation of successful direct selling or MLM firms is a high-quality product or service. In addition to the quality of the product or service, it must also meet the current and near-term future needs of customers. This sounds simple, but quality products are what creates an initial base of customers. The success of the business is based upon the experience and influence gained with these initial customers. direct selling or MLM firms that are quickly successful build a loyal customer base with products or services that are understood, well defined, in demand, are easy to purchase and equally easy to recommend to others.
2. Innovative Marketing & Go-to-Market Strategies: To reach potential customers and incentivize distributors, direct selling and MLM firms must be innovative and creative in their marketing efforts. Major shifts to affiliate, referral, and influencer business models that complement the traditional MLM/direct selling model are not slowing. As a result, new compensation and incentive programs are rolling out. These programs require payouts to be more frequent, localized to the payee’s currency of choice and delivered to their chosen wallet. This evolution is creating a need for a flexible and robust payouts platform that can facilitate reaching a much more diverse and larger audience.
3. Strong Leadership: direct selling and MLM firms require strong leadership to effectively manage teams and ensure everyone is working together towards achieving company goals. A leader should be able to create a vision and inspire their team to work towards achieving it. Leaders are expected to go above and beyond management of the strategy and day-to-day operations of the business to directly engage with and support sellers.
4. Financials: Careful planning and budgeting is critical to establishing and maintaining profitability. This includes setting clear sales and revenue targets, establishing transparent financial projections, and effectively monitoring expenses that will impact the business and, most importantly, its sellers.
5. Networking: Networking is at the core of success in the direct selling and MLM industry. Establishing relationships with customers and distributors is essential for growth. The ability to help support new recruits by sending money for expenses or incentives helps build those relationships. With relationships being developed via an ever increasing number of pathways (industry events, influencers, social media), understanding the importance of each connection – with customers and selling partners – is critical.
6. Training: Invest in your team. Be sure everyone in your value and delivery chains are properly trained and equipped to be successful. This includes providing training on the product or service, sales techniques, building a network of customers and distributors and knowing how, when, where and why to support one another in growing their business (as noted above in supporting new recruits onboarding expenses). Training is the most critical action to ensure the knowledge and skills your sellers need to be successful and grow the business are in place.
7. Technology: This can’t be overstated. Every business is a digital business. Technology is a required tool to manage and grow any direct selling or MLM business. From streamlining processes, automating tasks, motivating the sales force by paying them faster and offering various payout methods, and increasing visibility into the business, the technology stack – and your technology partners – are your second most important assets.

Success in any dynamic market is a result of partnership and collaboration.

Lean heavily on those who will help you address these opportunities and set 2023 up to be a record year.