|
Hello my friends,
Heres some powerful information that we tend to forget about why we are doing network marketing. Kathy Martin
... make a list of the essentials you'll want to take along with you on the exciting journey of starting a network marketing company.
Starting a Network Marketing Company?
By Jay E. Leisner,
Sylvina Consulting
Starting a direct selling or network marketing company?
If so, you've taken the first step on an exciting journey. Before you pack your bags, though, you might want to make a list of the essentials you'll want to take along with you.
Product-Focus or Opportunity-Focus
First, you'll want to think about what type of company you will be launching. Will your company be a product-focused company, or an opportunity-focused company, or a company which emphasizes both equally?
Some companies are product-focused. They emphasize the product or products in their marketing literature and de-emphasize the compensation plan opportunities.
Other companies are opportunity-focused. For these companies, the compensation plan is emphasized more so than the products.
What will be your company's focus? The answer is an important decision for it will impact not only the spirit and tone of your marketing materials but also the types of consultants attracted to your business.
Your Story
Next, you'll want to create your "story." All successful MLM companies have a story to tell which helps attract both consultants and retail customers. In addition, you'll want to create a company mission statement and a tagline.
Your story, mission statement and tagline will help to differentiate your company from others. Consultants will want to share your story with new recruits. Customers who buy products will want to know what makes your company special.
Your Spin
Then, you'll want to answer this tough question:
What specifically will you do to attract consultants to your business opportunity?
When you think of your competition, think not only of other companies selling similar or identical products, but also think about other direct selling companies. For people interested in part-time or full-time income opportunities, your business opportunity is one of many options available to them. So, making your business opportunity attractive to new consultants is VERY important.
Similarly, attractiveness is also important to your end consumers, the retail customers who will purchase most of your products from your sales force. Ideally, you'll be selling products or services that are in demand and that are unique. If this isn't possible because your products are sold by many other companies, then you'll want to emphasize the features of your products that are different from others.
"Differentiate, differentiate, differentiate." This phrase should be your mantra.
Don't Forget Legal
During the excitement of planning your journey, don't forget about the legal aspects of your business. For a long business life, you'll want to make certain that both your products and your business opportunity don't violate any laws. Unless you're an attorney with experience with this marketing channel, don't presume that you already know what's legal.
Engaging the services of an attorney is a wise decision before you open your doors for business. While you may have a relationship with a general practice attorney, for your new business we strongly suggest you contact an attorney who has worked with other direct selling/network marketing companies.
Collateral Materials
You will also need to develop the marketing brochures to be distributed by your company and by your consultant sales force and to design the website that helps to sell your products and your business opportunity. These collateral materials are highly important as they often are the "first impression" that others will form of your company.
The rules and regulations for your company will need to be written and published. While some companies choose to make the rules after the business is going, it's best to think about your policies and procedures before you open your doors for recruiting, so that everyone knows the "do's and don'ts" from the very beginning, and you're not playing "catch up" with your sales force.
A young company with clear policies looks much more professional and thus attractive to new recruits and customers than a new kid on the block that is less than fully prepared to open its doors. Remember, first impressions leave lasting memories.
You can either write these collateral materials yourself, hire others to write them for you, or purchase templates from a consulting firm.
Compensation Plan
Some companies say that the compensation plan is most important to the success of a direct selling or network marketing company.
While this point may be debatable, what is certain is this… For a company to be successful, its compensation plan must fit the products or services being sold and must encourage the right behaviors, those behaviors that motivate performance at each level in the compensation plan.
If you have positions in your plan that are difficult to achieve (relative to the previous position), you may have trouble retaining your best performers who continually seek to advance themselves and increase their earnings.
Whether you create your own compensation plan or pay a consulting firm to create one for you, it is often a good idea to share the compensation plan with experts who have reviewed many compensation plans before publishing it to your sales force.
Over time your compensation plan will probably change. Many compensation plans are a "work in process." Statistically, the average company changes its compensation plan once a year.
MLM Talent
Many principals of direct selling or network marketing companies have never owned this type of company before. Most employees of direct selling or network marketing companies have not previously worked for this type of company, either. As you may imagine, these situations would put an extra burden on any company.
To help ease these situations, some companies choose to retain the services of a business consultant. If you hire such a consultant, it is best to locate one who has years of experience working with many direct selling and network marketing companies. You don't need to pay a consultant for his or her learning curve. Let someone else do that.
Alternatively, you may decide that you wish specifically to locate and hire individuals with heavy experience in this marketing channel. If you do, you may find that they wish to be compensated in two ways… with a base salary and with a percentage of sales. Some may ask you to place them into or near the top level of your sales organization with their position "grandfathered" at the highest level of your compensation plan. And some of these folks will ask you to try to "hide" their identity in the sales organization from your sales organization.
Because the interests of your company are different from the interests of your sales force, it is better when possible not to place an individual into your sales organization when he or she is also an employee of your company. Otherwise, you will find as your business grows that these individuals may be motivated more by the income opportunities as a consultant than by their fiduciary roles as employees. There is a clear conflict of interest when an employee is also a consultant in your sales force. It's best when your MLM talent has just one of the two roles, either to become an employee or join the program as a consultant.
Software and Technology
Today, in all industries, companies use software and other technologies to reduce costs or take advantage of economies of scale. Companies using your marketing channel are no different. Software can be used not only to help contain costs but also to provide the home office and the sales force with the tools to better manage their businesses.
Making a decision on the purchase or use of software for a direct selling or network marketing company can be a difficult process. Each business is unique with specific requirements that should be considered when evaluating software vendors and their products.
On the surface, vendors can look alike, but each has its strengths and weaknesses that are not readily apparent.
Some companies choose a vendor based on how quickly they can implement a system, assuming all vendors offer the same service and the same product. These are incorrect assumptions.
Selecting a software vendor is much like selecting a spouse. Just as you shouldn't select a mate based on how quickly he or she will marry you, timeliness is not the primary factor to be considered when purchasing software. It is definitely better to choose a software vendor carefully than to make the wrong choice quickly, for the wrong reasons.
Using a consultant to assist with the purchase of software gives companies many strategic advantages. A consultant familiar with software vendors and their products and services can help not only to explain the differences among them, but also to help identify what is most important to the purchaser and to communicate these requirements to the prospective vendors.
For a marriage to work well and last, both parties need to understand how each other thinks. The same goes for the client/vendor relationship. An experienced consultant can help teach the purchaser how to be a good client and can help present the client's needs clearly to the vendor. He or she can provide guidance to both parties and can serve as an intermediary to help negotiate the terms and deliverables in contracts or to resolve disputes.
Business Analysis
In your marketing channel, companies use differentiation to help compete in the selling of the business opportunity and the company's products or services. Each company therefore has its own unique requirements that need to be identified and communicated clearly to its vendors.
Business analysis is the name used for the process of gathering the individual requirements of a business. Before software is purchased, it is recommended that the business analysis be performed first. Otherwise, the total cost of the software investment is not known until after the software is purchased.
Software companies prefer that the software license or software use agreement be purchased first. An experienced consultant can help you navigate these waters where your interests and those of your software vendor are different.
Project Management
After you have selected a software vendor, there will be many details to address for your implementation project. For a project to be successful, each party must remain informed as to the steps assigned to them, and the impacts of missed deadlines. It is suggested that you have scheduled weekly phone calls with your vendors to review outstanding tasks.
You will need to appoint a project manager internally who will be your primary contact for your vendor, or you can retain an outside consultant with experience working with software vendors on these types of projects.
Conclusion
Congratulations, again! You are on the path to launching a company which sells not only products or services, but also a dream of independence for your sales force.
|