Bringing the right salespeople into a direct selling organization – and keeping them – determines how much and how quickly multi-level marketing (MLM companies) can grow. So, how can MLM companies recruit the best sales representatives? Taking a strategic approach to recruiting is essential, surrounded by robust support, tools, training, and recognition.
The market forces influencing MLM recruiting
The reality is that half of MLM representatives will quit within their first year. Nine in ten will leave within five years. Reducing these attrition levels requires MLM companies to look beyond a “recruit everyone” strategy to create a tailored plan that fits the organization, its products, and its culture. Strategic recruiting is worth the investment of MLM leaders’ time and focus. Research shows that improving representative retention levels by just 10 percent drives an estimated 49 percent revenue increase for the company over a ten-year period.
The good news is that direct sales careers are more appealing than ever. According to the Direct Selling Association, almost eight in ten Americans are interested in flexible, entrepreneurial careers. When it comes to Millennials and Gen Z, the interest level jumps to nine in ten people. Direct selling provides a significantly more affordable way for people to achieve career flexibility combined with the ability to build their own businesses. Seventy-nine percent of Americans view direct selling as an attractive entrepreneurial option.
High interest levels are translating into growth for MLM companies. Overall, direct selling companies achieved a 14 percent annual growth rate in 2020, which equaled a record-setting $40.1 billion in retail sales. To capitalize on these market trends in the years ahead, smart recruiting will be key for MLM companies.
10 elements of successful MLM recruiting
People want to join organizations they believe in. MLM companies need to tell a compelling big-picture story, so that prospective recruits see both what’s in it for them and how becoming a sales representative can help them make a difference.
1. Get clear on the big picture.
Field sales representatives and customers connect to an MLM company’s sense of purpose or reason for being. Younger generations are especially attuned to purpose when making career choices. Forty-five percent of Gen-Z members (born between 1997 and 2012) prefer to work for a company that makes a positive difference. This powerful generation, which accounts for one-third of the world’s population, is projected to make up 30 percent of the workforce by 2030.
To recruit effectively, MLM companies must establish an authentic sense of purpose across all aspects of the business, including brand positioning, company culture, and product and service offerings. Many MLM companies extend their sense of purpose by supporting a cause. Also known as corporate social responsibility, adopting a cause that’s closely aligned with the company’s mission and the values of its customers can expand the organization’s impact and enhance public perception.
2. Recognize different rep types.
Today, there are 7.7 million direct selling representatives, which is up 13 percent from 2019. Within this universe, there are distinct segments of reps who join MLM organizations for different reasons. The majority of MLM representatives – 88 percent – are part-time, spending less than 20 hours per week building their MLM business. The remaining nearly one million reps have a full-time focus and pursue their direct selling career for 30 or more hours per week.
Beyond the amount of time devoted to the business, MLM representatives have different goals and expectations for their careers. Some aim to create a rapidly growing business, others look to supplement an existing full-time income, and some want to earn money to help them reach a short-term goal. All appreciate the flexibility to determine their schedules and the scope of their business. By recognizing the different goals and needs among your company’s representatives, you can tailor recruiting efforts and ensure that all reps have the tools and support they need.
3. Profile your ideal representatives.
Recruiting is easier when the organization has a deep understanding of the attributes it takes to be successful. Overall, MLM representatives tend to be women (75%), over age 35 (77%), and Caucasian (87%). In the years ahead, the diversity among MLM representatives is projected to increase with more men, African Americans, Millennials and Gen Z-ers joining the ranks.
To guide your recruiting efforts, create target representative profiles that go beyond demographic profiles to include attributes such as entrepreneurial interests, communication skills, technology and social media abilities, and overall resilience.
4. Don’t leave recruiting up to chance.
With items one through three in place, make sure your frontline field sales representatives who are doing the recruiting have the information and training they need to be successful. When MLM companies provide their representatives with a recruiting roadmap and focused training, they are better able to attract – and retain — representatives who will succeed within the organization.
One crucial element in helping representatives recruit effectively is to train them how to ask questions of potential recruits, listen closely to the answers, and present the opportunity in a way that resonates with the individual’s needs and goals. In addition, training should include tools and support to help representatives inspire candidates while still setting realistic expectations.
5. Keep compensation plans simple.
Explaining how MLM representatives earn money is a crucial part of every recruiting conversation. When the compensation plan is too complex, many recruits tune out and lose interest. On the flip side, when an organization’s compensation plan is easy to explain to potential representatives, they can see the possibilities and imagine their future success.
The choice of a compensation plan is one of the most important decisions an MLM company makes. Factoring in how it will impact recruiting efforts is essential. The plan must also align with the organization’s structure and long-term growth goals. For example, unilevel compensation plans are simple to explain and are often selected by start-up MLM companies looking to grow quickly. Matrix compensation plans are one of the most common MLM compensation structures because their fixed width and depth give MLM companies more control over payout volumes. Matrix plan structures also provide sales representatives with a range of compensation opportunities through a blend of commissions and bonuses.
MLM compensation plans should also include incentives that motivate representatives to recruit others. While compliance regulations require compensation to be based on retail sales, build in recruiting bonuses to help keep recruiting top of mind.
6. Make signing up easy.
Make a recruit’s decision to enroll as a sales representative for your company seamless. One of the best ways is to tap into your MLM software to create a custom online enrollment experience that people can complete even as they’re shopping. By embedding the enrollment experience within your Ecommerce website, you’re able to convert prospective representatives when their interest and engagement levels are high.
Along with a simple online enrollment form, leverage your MLM software to create an automated welcome message and trigger alerts to the new representative’s upline team so they’re able to reach out with personalized greetings immediately.
7. Consider onboarding and training part of the recruiting process.
Even after someone decides to join your organization, recruiting shouldn’t stop. Shift gears with a customized onboarding journey that delivers the right information at the right time to help new representatives get their businesses up and running. With journey-based onboarding built within your MLM software platform, you can create a mix of information and resources in a range of formats, including written guides and video tutorials.
Journey-based onboarding provides access to the information and tools representatives need without overwhelming them. Research shows that 58 percent of people prefer to learn at their own pace, and half want to learn at the point in time they need the information.
8. Deliver the tools reps need on day one.
Give new reps tools so that they’re able to hit the ground selling. This includes making it easy for them to set up a replicated Ecommerce website with a unique URL that’s just for their customers. Choose an MLM software that provides robust shopping cart and Ecommerce capabilities that are fully integrated with your company’s back-end MLM software platform. Other must-have tools include customer profiles and customer relationship management (CRM) capabilities, automated alerts, and reporting.
Your goal is to enable the new representative to experience sales success as soon as possible. When an MLM representative makes her first sale within 14 days of joining, she stays with that company for an average of six years.
9. Interview and adjust.
Follow up with new representatives after the initial recruitment process and at regular intervals throughout their first several months with the company. You’ll get valuable feedback about their experience when it’s still fresh in their minds. Plus, they are likely to have good ideas about how to enhance the experience. Treat recruiting as an evolving strategy that you constantly adjust and improve based on input from your team and ongoing recruiting results.
10. Set representatives up for success.
Finally, the single best way to ensure recruiting success is to help new representatives succeed. When they do, they provide the positive word-of-mouth endorsements and first-person success stories that will continue to inspire others to join your organization.