As an Associate with Strategic Choice Partners, Rick helps companies update their sales efforts in a way that works in today’s direct selling climate while also taking into account the quickly moving landscape from a regulatory perspective.

Building GREAT Sponsors

IT’S AMAZING WHAT OUR PEOPLE DO!

Our businesses rely on the efforts of the sponsor (coach / upline) to equip, guide and support new recruits. It’s a fascinating process to observe, and so multifaceted that it’s hard to say any one component is more important than another. Used to, we at the corporate office let sponsors handle the onboarding of their new Distributors almost entirely. Today, that’s not the case, for several reasons.

Previously, I shared what I consider to be Part 1 of this series on “Becoming Brilliant in the Basics”. If you haven’t read that article, I suggest you do it now for a proper frame of reference. The corporate team is much more responsible for pretty much every area of a direct sales operation than it used to be. This is especially true when it comes to helping our people not just sell well, but also sponsor well. That’s what I want to focus on in today’s article.

Typically, sponsors serve as teachers, trainers, encouragers, product experts, compensation gurus, sources of inspiration, boundary enforcers, information centers, and much more. Additionally, many of these sponsors are actually very young in their journeys, and thus leaning on their sponsor for the same kind of help they are trying to give others. Each of them deserves a standing ovation for every day they stay in the mix.

KEY QUESTION:  What is the company’s role in supporting and equipping sponsors to be GREAT at what they do?  They want to be effective and successful, their sponsors want them to be successful, and the company wants them to be successful, no doubt. Yet frequently there is no specific training or defined pathway for becoming a great sponsor. Often, it’s more “Catch what you can, when you can, if you can!” for them.

No doubt some veterans take this very seriously and give their best efforts, but sadly, this needed training remains far from the top of the priority list in so many companies.

This is not optimal, but it’s understandable. The corporate team is busy, most associates are very part-time, time for training in general is scarce, and the upline veterans have their hands full already. However, there is a price to be paid for leaving skills training – such as being a great sponsor – to something akin to chance.

OPPORTUNITY IS STARING US IN THE FACE

We know that people respond to product offerings. Some purchase at full retail. Some go on to become preferred customers. Some go on to become Distributors.

Some engage the business casually. And some move through the ranks as they choose. In the midst of it all, quite a few purchasers / preferred customers will cross over from purchaser to seller. And every one of those people deserve the company’s best efforts to help them become competent, comfortable and confident.

“But that’s the role of the upline!” I understand this has been the typical approach for a long time, but the view has shifted dramatically over the past few years. Consider this:

• The highly-skilled sponsors in most companies comprise a small percentage of the active Distributors.
• A percentage of those choosing to become Distributors (sellers) are not structurally near the highly-skilled sponsor above them.
• Those who are close to a highly-skilled sponsor will typically not get a lot of time with her or him.
• There can be (and often is) notable variation in how different leaders present basic orientation and training.
• New Distributors need simple, absorbable and duplicable tools.
• Everyone using the same “playbook” is a win for each and every Distributor.
• Efforts invested here consistently can increase productivity.
• A collaborative content-creation group of corporate staff and veteran Distributors can design this in a relatively short period of time.
• Great sponsors support sales, volume, revenue and growth for the company.

Some in our companies will say, “We have videos on our website that address some of this.” We do well to look at it from a different angle: How many people have watched those videos all the way through? How frequently do we hear stories of people using the videos and increasing their retention and volume? Are we seeing any growth in retention of engaged associates, or is it flat-lined? Is the challenge to build GREAT sponsors worth the effort?

Some others in our companies will say, “The existing sponsors can handle it; we don’t need to get in that loop.” Again, look at it from a different angle: When a purchaser or preferred customer chooses to start selling, we owe them all the resources we can muster. They come with hope and the willingness to try something that is probably totally new for them. They are “buying into” more than just their upline; they are now willing to speak and act in support and endorsement of the brand at large. Many, if not most of them, have a sponsor not fully equipped to train them. Without guidance, a new seller – who will face “no’s”  or “let me think about it” responses in their natural market- may quickly set selling aside and default to just purchasing.

Minimal efforts to equip new Distributors get minimal results. And, while maximal efforts here do not guarantee anything, real-world and relevant training will capture the attention of some new Distributors. And that can…

• Accelerate their learning curve,
• Build their confidence,
• Increase their sales,
• Support retention of their purchasing base,
• Lead to duplication of these their skills in more new associates.

What if there was a 3% growth in retention of active Distributors? What if it was 5%?

The point here is simple: The business relies on committed, competent, confident and consistent Distributors. So, taking a minimal or arms-length approach to equipping them is unwise.

We can take this statement to the bank: “People don’t respond much to what is said or published; they respond to what is EMPHASIZED!” If we believe strongly that GREAT sponsors are keys to our future growth in all categories, then creating and continually emphasizing solid tools for them makes perfect sense.


TRAINING WE CAN OFFER OUR NEW SPONSORS / DISTRIBUTORS

New sponsoring Distributors have much to learn and master. Most of them need specific guidance and direction, enabling them to start building their own business. Even more important is their ability to then transmit the learning to their downline. This is why simple and duplicable strategies are essential, and companies who choose to own the training will be in an advantaged position.

Here are some example modules we can create and provide for our associates:

I. CELEBRATE THEIR DECISION TO BUILD!

A. Thank them for their trust, affirm their choice, and pledge support / help

B. Give them a vision of what’s ahead

1. Influencing the thinking, behavior and development of others
2. Adding value to their lives with our products
3. Learning as you go and increasing leadership skills
4. Receiving help and coaching from your upline
5. Growing in competence, comfort and competence

C. You’ll enjoy the intangible and tangible rewards that can come with our business

II. PERSPECTIVE ON THE PROCESS THEY ARE BEGINNING

A. There is so much common ground

1. You AND your new Distributors are all “volunteers”; you do what you do for reasons that matter to you
2. You and your Distributors work your businesses with discretionary time (Free to choose how much time / effort you will invest)
3. Your leverage with others is your character, commitment and consistency
4. Leading others here is influence, not management
5. Your role is to guide and equip those who want to build

B. Your upline knows all of this; ask for their help and support as you go

C. The target is to make progress in the process

1. Keep a narrow focus initially: what do I do next?
2. Emphasize action; knowledge will come as you go
3. There is a learning curve with anything new; be patient with yourself
4. You may move fast; others may move slower or faster; it’s not a contest

III. STRATEGIES AND MECHANICS TO MASTER

A. Learn and role-play key behaviors (repetition increases skill)

1. The mindset for a relaxed conversation with a prospect
2. Learn to share a story that’s real in you and relevant to others
3. Speak confidently about products you value; simple and short
4. Ask relevant questions, and listen carefully to what’s said
5. Embrace the reality of questions; they are to be expected and most often are a signal of interest
6. Respond well to “No” or “Not now”

B. Develop language for comfortably moving to a decision; stay with it

1. Summarize: “Here’s what I heard you say…”
2. Identify: “I really hear that…I remember my own experience with…”
3. Affirm: “I’m confident I can help you, and I pledge that I will…”
4. Recommend: An affordable group of products that meets the target
5. Ask: “Let’s go ahead and place your order now, okay?”

C. Having business conversations with downline associates

1. Reinforcement: “Let’s walk through this again and nail it down”
2. Clarifying: “Tell me where you are with this; I want to serve you well”
3. Corrective: “Your energy is great; let me help you with some changes we need to look at…”
4. Boundaries: “I’m for you; I’m sensing resistance to what we agreed we would do together… Can we talk about that?”

IT’S WORTH IT FOR EVERYONE

Distributors are the most valuable assets. When equipped and enthusiastic, they can accomplish so much that matters to so many. Knowing that, helping them become GREAT sponsors makes perfect sense.

Many years ago, my mentors in the financial services industry modeled for me extreme ownership of their highly successful business. They understood that the quality of their investment in a client could literally change the trajectory of that client’s life. They never handed key / critical matters off to other members of their team. They counted it their responsibility and privilege to ensure that clients received the best counsel and support possible, personally. I’m now an advocate of that approach. One of their favorite sayings is timely for us right now: “If you own your own business, then be SURE you OWN your business.” Let’s own our businesses, and give our people the tools they need to succeed.

Footnote:
Video modules make the most sense, with a corporate team member and a respected Distributor guiding the conversation. Six to eight minutes is common, but remember that people who really want to learn will stay with you longer if the content is solid. And, spreading out the content in absorbable segments is preferred over attempting to cover everything in one setting.

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As an Associate with Strategic Choice Partners, Rick helps companies update their sales efforts in a way that works in today’s direct selling climate while also taking into account the quickly moving landscape from a regulatory perspective.

Becoming Brilliant in the Basics: What is the Company’s Responsibility for Sales Training?

“Pay attention to detail; leave nothing to chance.” My mentor in direct sales stood on this maxim daily, and I watched as he proved its value again and again.  It is timeless wisdom we would do well to heed.

One of the “detail” items that can be amplified and accelerated in our companies now is the development of “specific guidance for people to use in their selling conversations”. Why? Let’s reflect for a moment on things we already know:

• The vast majority of our associates have never been in a sales venture.
• Many, if not most, have no appetite for “selling”, even though it’s what we do.
• They will “share “ the product with others if they believe it to be high value.
• They either “fly solo” in their efforts, or are directed by their upline to “just do what I do.”
• Statistically, and for many reasons, most stop trying fairly soon.

So, what do we do with all that? In an industry that, for years, has relied so heavily on a “This is just how we do it!” mentality, the corporate team finds itself at an interesting and recurring crossroads when it comes to sales training. Here are some approaches I’ve seen over the years:

* Leave all sales-training to the upline leaders; let them train as they choose. After all, they know best, don’t they? They have the track record to prove they know what it takes to be successful. This is problematic; the company is ultimately responsible, and accountable, for all content produced.

* Provide some resources on websites or in conferences, but with little energy or planning. The problem with this approach is it takes more of a “check it off my to-do list” approach. Sure, you can say training is available. But is it any good? Is it actually what you want to see duplicated? If it’s worth doing at all, it’s worth doing with excellence and energy.

* Employ the motivational challenge of “You’ve just got to talk to more people.” The content of the training doesn’t matter quite as much as the sharing of that content. But, of course, the content does a lot.

We are better than any of that. Or at least, we should be.

Before serving for 20+ years as an executive in direct sales, I worked as a registered representative for a financial services company. The sales training I received during that tenure was unlike anything else I’ve ever experienced. It was thorough, detailed, accurate and, most importantly, effective. I understand fully that what we do in our industry is not the same as my previous engagement. Yet, I see a tremendous opportunity for us to find some healthy, engaging and profitable middle ground for our companies to “own sales training”. What if our efforts here increased retention, engagement, and sales by just 5%? Would that be worth the effort?

3 Reasons the Company Must Take on Full Responsibility for Training

The rationale for a company to fully own sales training and provide associates with the needed guidance is sound.

First, from a regulatory standpoint, each company is 100% responsible for any messaging presented to consumers by the company, by associates, in any form and via any method / tool. That’s sobering, but it’s true. We do well to own this, and certainly can engage key associates to help create and refine it. But the company must be its owner, ultimately.

Second, our messaging shapes the way consumers view us. So, it’s a big deal. Our websites, videos, promotions and imaging are meticulously reviewed to ensure a “best foot forward” effort. Why not apply that same diligence to a simple, cohesive and duplicable guide for the entire associate base?

Third, simple processes can be duplicated quickly by existing associates and absorbed quickly by new associates. Duplication is a key part of what we do; it’s wise to standardize tools and move away from many versions of trainings that result in confusion. This confusion consumes precious time that could be given to business-building activities. With the participation of veteran leaders, companies can establish  content in a standardized guide and drive it deep for the entire organization. An environment wherein everyone uses the same messaging – along with their respective styles, strengths and personalities – will unify and solidify key components of the business.

It is worth noting that today some US companies are being very specific and directive with messaging, and strongly recommending that it be employed across the company. It appears that a unified message is actually quite successful. Simple, clear and duplicable works well.

Training Basic Selling Skills: Where to Start

What selling skills do we train? With so many companies and products inside our industry, any recommendations will have to be modified to accommodate the company’s unique offerings. That said, here are intentionally simple, duplicable examples of the training we can and should provide for our associates. They are not intended to be scripts, although the language is solid. But if you’re not exactly sure where to start, creating training that addresses the topics listed below is a perfect guideline for you.

1. Your Mindset for a Relaxed Conversation

• I’m meeting / talking with a valued friend.
• I’m sharing good things with my friend…things that matter to me.
• I’m a bit nervous since I just started, and it’s OK to share that with my friend.
• I’ll own what I know, and what I don’t know.
• My friend may or may not have interest; either is OK.
• I will learn a lot about me and about this process; that’s a win!
• I’ll get better with repetition.

2. Sharing Your Story in 2-3 Minutes

• Invest some time affirming your relationship with the prospect.
• A question: “May I share with you something I have found?”
• Where I was when I learned about this.
• What I saw and heard, and what I felt.
• What I did (purchased / used product, enrolled, etc).
• The results I’ve seen and value I’ve found here.
• A question: “Does any of that pique your interest?”

3. Being Comfortable with Questions

• Questions are to be expected; we all ask them.
• Affirm the question with a smile.
• Questions are most often signals of interest.
• Give simple answers if you can; say “ I don’t know” if you don’t.
• Pledge to get the answer if you don’t know.
• Ask, “Are there any other questions that come to mind?”
• Continue the conversation.

4. Asking Good Questions and Listening Carefully

• Have you ever used products like this?
• What was your experience?
• What did you like or not like about it?
• Why did you stop?
• May I ask what kind of support you received?
• Would you be open to trying my product?
• May I offer you a plan to get started?

5. Language for Moving to a Decision

• Summarize: “So, here’s what I’ve heard you say… did I get that right?”
• Identify: “I understand… I recognized I needed to do something new.”
• Affirm: “I really believe I can help you here, and I pledge that I will.”
• Recommend: “Here’s what I recommend for you today…”
• Ask: “Let’s go ahead and place your order, okay?”

As simple and obvious as these may seem, they work and can make a massive difference in how associates develop in pursuit of their goals. My experience with so many companies today is that they bypass these simple, foundational trainings and instead seek out trendier topics or novel approaches, hoping to find a shortcut to success. Online marketing and social media techniques have certainly accelerated this approach. But ask yourself this question: what happens when my new associate makes a connection on social? Won’t they still need to address the same questions I’ve listed above?

Regardless of the medium used to share these message, the content itself needs to be crystal clear to your new associate. From there, sharing gets so much more comfortable, across any communication channel.

Make the Transition in Your Training

Our respective teams of associates are precious gifts, and we should steward them with the very best we have to offer. Equipping them to be competent, comfortable and confident in the marketplace is a privilege and responsibility that rests on our shoulders. If we do this well, they can accelerate their growth…

• From mechanical to relational
• From tense or intense to relaxed
• From monologues to conversations
• From “telling” to partnering
• From heavy promotion to attracting and drawing others to join

Finally, I repeat the initial quote from my mentor: “Pay attention to detail; leave nothing to chance.”

Footnote: Video presentations with PowerPoint and two “live” trainers guiding the conversation are effective. And, utilizing role-play scenarios in the videos will amplify the learning notably. Additionally, making the text versions available for download from your website can be useful to many.

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Rick Loy is a sales strategist and training specialist with more than 20 years of experience as a Senior Executive in direct selling. As an Associate with

Rick Loy
The Decision That Defines The Future: Lead, or Follow?

Company employees terminated because a few Distributors don’t like them. Marketing initiatives undermined and ineffective because a key Distributor would prefer a different approach. Highest level executives attempting to deal with weighty issues impacting everyone in the business, but having to give time to rumors, accusations and the activity of the “shadow government”. Sadly, these examples and more are realities in far too many companies. And, the result over time is often a fatigued company team, a field force divided and / or confused as to whom they should follow. Generally, there is a common root where these things are present: The failure of company leadership to lead.

The most consequential choice some companies face today is the decision to re-establish a healthy structure regarding the roles/responsibilities of company leadership juxtaposed with the roles and responsibilities of field leadership. Simply stated, will the company lead with vision and strength, or abdicate it’s responsibly to lead and take a subordinate role in deference to the field?

For what may have been well-intentioned thinking, some companies have ceded functional control of the business to the field leadership. In some cases the balance of “power” is so skewed toward the field that the corporation is severely limited in its ability to lead, steward and effect necessary change for the long-term wellbeing of the company. Some of this imbalance is driven by corporate fear of upsetting those in the field, and some is driven by the reality that company leadership doesn’t have sufficient experience to lead a direct-sales business. Then, some of that fear is amplified when executive leadership or ownership chooses to undermine corporate members b y yielding to or placating strong veteran field voices. When the corporation is afraid to challenge and lead the field, the vacuum will be filled by field leaders every time.

For the sake of clarity, here are working definitions for this topic:

The Field: The Distributors/Consultants/IBO’s, etc, representing  the company in the marketplace
The Company: The owners, Board Members, CEO, President, Executive leadership and all company employees

This decision to truly lead is sobering for the company because tough questions have to be answered with absolute honesty and tremendous courage. Those questions include – but are not limited to…

• Which group is for all intents and purposes “calling the shots”?
• Who has practical ownership of the company messaging to the public?
• Who has practical ownership of field training?
• How does any of that impact short-term company decisions/efforts?
• How does it impact long-term sustainability for both groups?
• Isn’t the Distributor “king / queen”?
• Isn’t the corporation fully responsible for any / everything?
• What does the current regulatory environment suggest relative to these matters?
• What impact would change in these matters have on the field, company momentum and thus on revenue?
• How would a company approach resetting the table on these matters?
• Can a respectful and productive partnership be established between the two groups?

This issue is real, but often unspoken. Addressing it is a multi-dimensional challenge, likely to evoke fear / angst for all parties. The conversation is clearly not comfortable, yet the future of a company may rest on the will of ownership / corporate leadership to lead definitively while authentically valuing the insight, creativity and experience of its field leadership.

The company must genuinely respect the unique, essential role the field plays every hour of every day in the business. This is so obvious that it would seem unnecessary to mention… but just to refresh the thought: Good people work functionally as volunteers, using discretionary time, placing their reputations on the line, learning new skills and internally generating the will and energy to persist. That is their primary role. They must be celebrated and sincerely honored regularly.  The company needs them, and they need the company. The common ground upon which both corporate and field stand can be rich and fertile for a creative, joyful and productive partnership. Yet, that’s not always the reality.

In his book, “Leadership Is An Art”, Max Depree gives a starting point for addressing the current situation: “The first responsibility of the leader is to define reality”. Reality encompasses what is actually happening, versus what we may want to believe. What is reality today, versus what once was? How much distance is there between the public presentations of harmony and the private realities of conflict? How did this happen? And, perhaps the most important reality question: will the company own the challenges and move with integrity to correct the course, or allow the unspoken to remain unspoken, continuing down a path that will quietly undermine the best efforts of both the company and the field?

It’s a complicated and difficult situation that’s rarely addressed in the corporate offices. Yet, wisdom demands an honest look at these matters. So, back to Max Depree’s book, “Leadership Is An Art”, “the first responsibility of the leader is to define reality”.

Which leader is the focus of that statement? The CEO? The top Distributor?

Clearly, it is the CEO and the company. The company is 100% responsible for everything.  EVERYTHING. The company cannot abdicate that role, ever, for any reason. Yet, it happens often, and when it does there are short and long term consequences which impair everyone’s efforts to build a strong company. Here are a few of the possible unintended consequences…

• The CEO and executive leadership forfeit the ability to truly lead
• Over time the company loses the respect of dominant field leaders
• Field leaders are emboldened to “take more ground”, such as designing and disbursing training materials, philosophies, and business practices that may in fact undermine the companies’ values and place the company at regulatory risk
• In some cases field leaders operate independent of company policies, and may somewhat exclude the company from participation in field activity
• In some cases, dominant field leaders may be so empowered that they  influence company personnel decisions
• The role of the company shifts from leadership to follow-ship
• Materials, training systems and selling systems will multiply, inevitably creating disunity of messaging in the field / marketplace, and perhaps even divisions between teams in the field
• Company employees / team members will realize over time that their value is diminished, and perhaps their potential contributions are irrelevant
• Over time, the weight of accommodations and exceptions made by the company for the sake of “keeping peace with the field” render the company hamstrung, and somewhat irrelevant

How many of these consequences would it take for a company to find itself struggling?

Many weighty questions necessarily flow from the assertion that the Company must retain the stewardship responsibility of guiding the ship:

• How would a reset of roles / responsibilities be engaged?
• Is true partnership possible?
• What current or long-term issues of trust and respect must be addressed between the two groups?
• Does the company team truly understand the nuances and realities of a Distributor’s day-to-day work?  If not, why not?
• Is anyone in the company experientially acquainted with what the business looks like on the pavement – level?
• Do Distributors truly understand the challenges and pressures the Company faces in attempting to protect the business and the field, all while navigating those whose voices will resist the first sign of change?
• What is the typical “insider” talk about the company from the field?
• What’s the typical “insider” talk  about the field from the company?
• Who “owns” company messaging and training?  What changes have to  occur?
• What are realistic expectations for success in a change of this nature?
• How would a company “make the case” with the field for a reset?
• Is it even worth it?

It’s absolutely worth it, and it’s not an option in an environment where regulatory agencies are scrutinizing the channel and those who administrate the channel in their companies.

If we suppose that these things just work themselves out over time, we err at our own peril. Nothing gets better by chance; it requires focused and consistent effort. Yet, where present, these matters are impacting everything right now, and will require courageous leadership from the company to guide everyone to a place of understanding, respect and forward action. Forward action will likely involve change the field may not prefer, but it must be embraced by all if the company is to thrive.

To be crystal-clear, this cannot be about “power-plays”, egos, demands, or any signal that one group is more important than the other. Those seeds are unprofessional, unprofitable and unsustainable. The target of resetting the business in this manner is to stabilize, secure, steward and diligently protect everyone’s best-interests. A very wise man frequently said this of the company role: “We are the privileged stewards the hopes and dreams of our people.” That stewardship demands corporate leadership.  Sustainable growth requires consistent leadership: “An uncertain trumpet leaves the troops in limbo.”

Thoughts on a Path Forward

1 – This is a season of significant change in the industry, filled with massive opportunity. Companies can seize the open-door to reset their “reason for being” and method of operating with the field

2 – Field respect for the Company must be intentionally strengthened.

3 – Company respect for the Field must be intentionally strengthened.

4 – A Distributor Council, formed by the company with recommendations from the field and conducted with professionalism and mutual accountability, can be the key to starting the changes noted in #2 and #3 above. Over time it can help turn many of the dynamics between company and field toward a productive partnership. A forum of this nature can bring the “under the table” talk to the “top of the table”, and that’s where durable solutions are discovered.

Trust is the basis for forward progress here, and stipulating that all participants on the Council sign non-disclosure agreements not only elevates the privilege of being a Council member, but also creates mutual formal accountability.

The content for meetings must be collaborative, the environment must be safe for all viewpoints, and promise of action on anything must be fulfilled.

For more excellent insights on this approach, review the article below, authored by my colleague, Brett Duncan:  “The Right Way to Handle Distributor Advisory Councils“.

Clearly, this is not a comprehensive list of potential actions. It doesn’t need to be. If the Company makes the decision to LEAD, the pathways are wide open, and ideas will be abundant.

Final Thoughts for Now

Change is always a process; it will be here. It begins with a decision, followed by determination and disciplined action. It will take time. It will include sober conversations, great hopes, deep concerns, reluctant / rebellious voices along with enthusiastic supporters. For the field, some may leave. For company leaders, it will likely require additional learning in how to lead effectively.

Everyone will be investing time and energy to create something new. It will be a lot of work to not only “take the reins” but continue to hold them with a steady hand.

Most heads and hearts will know this shift is the right thing to do.

Yet, be aware that all the “what it will take” items above are also the typical reasons some companies avoid it.

The esteemed General H. Norman Schwarzkopf often used what he termed as Rule 14: “When put in charge, take charge”. Many reading this have been placed in-charge… check your heart and motives, set your eyes on the target, and take charge of the opportunity to steward the hopes and dreams of your people.

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Rick Loy is a sales strategist and training specialist with more than 20 years of experience as a Senior Executive in direct selling. As an Associate with

Guest post by Rick Loy
7 Clear Signals That Today’s Direct Sales Company Must Embrace 

Since 2015, three prominent direct sales companies have publicly faced regulatory scrutiny in the United States. While there were similarities in the issues addressed – such as multi-level compensation systems – each company faced a different journey, and a different outcome. Yet, there is a commonality that we are wise to acknowledge and embrace now: Change is here; it’s our challenge and our opportunity to understand it, respond to it and embrace it.

So, what do we do? What merits attention now? What else is ahead? The questions are legitimate and important. And, while I cannot answer them definitively, I can offer perspective, insight and ideas on matters that may be worth your careful consideration based on my own personal experiences.

A Sober and Courageous Reality-Based Assessment

The first suggestion is obvious, but essential: Gather your team and begin a careful, open and honest assessment of the state of your company relative to the signals coming from regulatory bodies. You cannot afford to be nonchalant or partial in your approach here. Do not look at what you do through the eyes of someone familiar with and favorable toward direct selling. You must view your company through the eyes of our critics and see what stands out.

In his book, Leadership Is An Art, Max DePree says, “The first responsibility of a leader is to define reality.” That’s the starting line. The conversation must be no holds barred. Nothing can be off limits. It cannot be constrained by “what we used to be,” or “what we want it to be.” It must a reality-based assessment, looking soberly and courageously at potential threats to the business, internal and external.

A traditional SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is the right approach. Yet, it must be approached with the discipline to see your situation for what it really is, for better or worse. The value of a careful, open assessment of this nature can be the springboard for positive change in your organization, and should be empowering for you and your team in an environment that feels unpredictable.

And one last thought: include MORE team members than usual in this conversation. Hear many voices. New and fresh thinking typically requires new and fresh perspectives and people.

So, what topics merit review right now? Here are the seven areas of your analysis that I believe should serve as the core of your assessment.

1. Corporate Messaging in General
Assess current corporate message for clarity, accuracy and integrity. Look at ALL forms of your messaging: Product positioning, earning opportunity claims, promotions language, policies and procedures, etc. Are they congruent? With so many departments creating and weighing in on so many points of communication, it’s easy for messages to get mixed, or be in contradiction with others.

2. Field Messaging to their Distributors, Preferred Customers and Retail Purchasers
When it comes to how the field communicates with others, are they saying what you’re saying from the Home Office, or are they using language that either minimizes the Company’s emphasis or distorts it with more sensational themes? It’s not enough for the field to communicate the essence of the corporate messaging, or its general meaning. The company messaging must be the absolute standard for field messaging. Good people with good intentions can create challenges for everyone with their “creativity” and put the entire company at risk.

3. Income Claims/Statements, from the Company or Distributors
The concerns here are straightforward: Income claims may be true for a given individual, but they are not the whole truth. They speak to what may be possible, but not to what is typical. Typical is a notably different scenario, and it must be accurately represented. Explicit or inferred income claims are quite problematic; that’s reality. So, setting very clear parameters for what Distributors can/cannot say is the role of the Company. No doubt important conversations with the Field will be required. Yet in this arena, clear direction must take precedence over Field preferences and passions. For the sake of clarity, here are some examples of explicit and inferred claims. As you read them, take a moment reflect on why they may be problematic. Wisdom seeks to understand different perspectives and viewpoints, even those that are difficult. Ask yourself: “How might others interpret this differently?”

Examples of Explicit Income Claims:

“I’m on track to be earning “$XXX” in the next 3 months”
The phrase “on track” is a projection that may or may not be achieved, and can be construed as a warrant or guarantee.

“I was able to leave my full-time job…”
The message is that earning in the direct sales venture equaled or exceeded the income earned from employment, yet there is no information provided as to how much time was required to achieve that income, what work was done to create income, exactly how income is actually earned, and the multiple variables that are involved in the business activity that can impact earnings.

“I paid off “$XXX” in debt with my income from our business.”
On its face, this appears to state that a person earned that amount of money directly from their business activity, which may or may not be accurate/truthful. It’s possible that some of that debt was paid off by earnings from the direct sales business, but possibly other debt payments were simply made by managing their finances better during the same time, etc.

“Last month I earned “$XXX” from my business.”
This may be true for a given Distributor, but it is likely not typical of the vast majority of Distributors, and is thus a misrepresentation for the consumer.

Now let’s look at inferred income claims. “Inferred” refers to images, photos and statements that infer income, even though they don’t directly make the claim. Examples could include pictures of houses, cars, boats, luxury trips and much more. If it’s tied to the business at all, it is an inferred income claim. To the regulatory community, there is no difference, or tolerance, for claims of this nature, either.

Statements such as “If I can do you it, you can do it!” can be very problematic, regardless of how innocuous they seem. The number of variables impacting anyone’s earnings is very large and the typical Income Disclosure Statement makes that clear.

Those variables could include…

* Is a person willing to receive training and ongoing coaching in business practices?
* Does a person have a disciplined, committed work ethic that sustains them in the process of learning and building a business as a functional volunteer?
* Does a person have the ability to organize and discipline their use of time?
* Does a person have a “warm market” wherein some success might be achieved?
* Does a person have skill in selling?
* Does a person enjoy providing service after the sale, and will he/she do it?
* Is a person able to see a business as a process requiring time and effort?
* Does a person have emotional strength to deal with “no” and rejection?

4. Scope of Corporate Responsibility
This may be the simplest of all the points to offer. The company is responsible for…

– All of its messaging via all channels and in all forms;

– All Distributor messaging via all channels and in all forms, including social media, webinars, calls, Zoom meetings, public/home meetings, materials (including Distributor created material).

There is empowerment here for everyone. The corporate team can lead with compassionate strength to ensure a bright future for everyone. Corporate can amplify and deepen the partnership with the field and navigate the journey of change together. The continuity of messaging from both corporate and the field reduces risk for everyone, strengthens the brand over time, and simplifies on-boarding and learning for new participants. Precision and unity in all these things are a win for everyone.

5. Policies and Procedures
There’s a familiar phrase that fits here: “Simple is duplicable.” Are your P&Ps simple? Are they easily understood by the typical person who may or may not be familiar with legally binding documents? Is common language at least equal to or greater than the amount of legalese? Do the policies demonstrate respect and gratitude for those who place their reputations on the line in their communities as they represent your brand, or are they heavy-handed in tone, and thus fear-inducing? Remember, the more complex these are, the less attractive they are.

6. Policy Enforcement
Whatever the policies are, be certain they are honored and enforced without respect to tenure, rank, or any other factor. For example, your “top-tier” Distributors are typically your most influential people, and may also be generating large volumes through their organizations in each pay cycle. The specific question here is this:  Do you require – in every detail – their full compliance with every policy you have published? Or does their success and achievement earn special treatment? There can be no distinction whatsoever between how policies are applied for any/every Distributor; your corporate responsibility is to ensure an absolutely level playing-field for all.And,  be certain every corrective action in response to a policy violation is fully documented, in a timely manner, with notice delivered to all concerned parties.

7. The Compensation Plan
I saved this for last, knowing it is not a simple topic. The good people who represent your company are your greatest asset. They work functionally as volunteers, and they do so using discretionary time. So, if they earn income, it likely matters to them, regardless of the amount. Any proposed amendments or changes to the compensation system typically create anxiety and unrest.

Yet, the culture today places a premium on simplicity, and some comp plans simply don’t provide it. Take a look at simplifying, compressing, and making the plan “brick to the forehead” simple for the masses.

This may be one of the most important conversations you’ll have.  Items worth reviewing include enrollment fees, the cost of starter packs, volume requirements and their frequency, thresholds for rank advancement, components of compensation that are tied to sponsoring and/or recruiting.

Additionally, making a careful assessment of where your volume comes from in a pay cycle would be very wise. How much comes from retail purchasing? How much from Preferred Customers? How much from those who are eligible to participate in the compensation plan? Knowing exactly where you are in all of this, and embracing the “product-sales first” mindset will likely serve you well in the future.

All these items can potentially open great opportunities for companies to enjoy increased field engagement, an infusion of energy and a refreshing of the hearts and minds for Distributors. Decide now to take the comprehensive look toward the future you want.

Some Final Thoughts

I’m not a lawyer; I’m a traveler alongside you, suggesting things I believe merit attention. My areas of expertise and passion have more to do with equipping and empowering the field, and helping the Home Office strategize how to best support those efforts. But I recognize that, for me to do that well and appropriately, I must be clear on what is and is not acceptable in today’s direct selling environment.

“Oaks grow strong in contrary winds, and diamonds are formed under pressure.”

A season of cooperative, collaborative efforts inside our respective companies, and in partnership with each other, will reveal who we are and what we are capable of creating and achieving. A better future is within our reach.

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