Customer-centric multi-level marketing (MLM) companies make every decision and execute every strategy with their customers in mind. As the direct selling landscape evolves, how can MLM companies be more customer-centric? Increasing customer centricity and turning it into a competitive advantage takes strong leadership, a focus on customer experience, and a commitment to optimizing technology and MLM software to create added convenience.
Customer centricity is defined as the ability to understand a customer’s situation and expectations and then make the customer the driver of all decisions related to delivering products, services, and experiences. MLM companies have long focused on building relationships between the company’s independent sales representatives and customers, but until recently, those relationships were primarily forged based on a product-centric approach. MLM representatives focused on making sales by emphasizing the features of a product or service.
In recent years, as customers became more comfortable with browsing, comparing, buying, and sharing their experiences online, MLM companies have adopted a more customer-centric approach. Today’s successful MLM representatives connect with prospective customers through shared needs and experiences and then introduce the products and services as a solution they can provide. From there, MLM companies are also focusing on leveraging digital technology to make it easier for customers to purchase and re-order their products and services.
Why customer centricity matters for MLM companies
Maximizing technology and the online shopping capabilities available through the company’s MLM software gives MLM companies and their field sales representatives a powerful way to connect with customers. This enables them to focus on targeting the best customer segments for their products and services, rather than simply pushing the products to anyone on the chance they’ll be interested in buying.
By starting with a deep understanding of the ideal customers’ needs and challenges, MLM brands and representatives create authentic and long-lasting relationships. These relationships then translate into customer satisfaction, loyalty, and retention.
- Customer satisfaction: Satisfied, happy customers are 14 times more likely to make a purchase than a new, prospective customer.
- Customer loyalty: When a customer is loyal to an MLM brand, nearly nine in ten will recommend it to their friends and family.
- Customer retention: Existing customers are a valuable asset for both MLM companies and their representatives. Organizations that have a customer-centric focus are 60% more profitable.
Along with these key business metrics, customer centricity can be measured by Customer Lifetime Value (CLV). CLV measures the value of a customer, not purchase by purchase, but on the basis of the entire relationship. This is a compelling metric to monitor because retaining existing customers costs up to five times less than acquiring new ones. CLV is calculated by multiplying annual customer revenue by the number of years they have been a customer and then subtracting acquisition and service costs. By tracking CLV, MLM companies have a way to demonstrate the value of repeat customers to their representatives and encourage them not to focus their time and energy solely on attracting new ones. CLV is improved by increased customer centricity and the nurturing of key customer relationships.
How MLM companies become more customer-centric
For direct selling companies, there are three primary elements behind adopting a more customer-centric approach. Each element combines with the others to help the company better understand customer needs and make strategic decisions based on that understanding.
1. MLM leadership and organizational culture
MLM leaders set the tone for customer centricity. It’s their job to make customer centricity an integral part of how the company operates. For customer-centric MLM companies, a focus on the customer must be a core value for the company at the corporate level as well as among field sales representatives.
One way to create an organizational culture based on customer centricity is to encourage everyone to make decisions from a customer-focused perspective. This can be facilitated by answering the following questions during the decision-making process.
- How will this new product, service, or marketing strategy benefit our target customers?
- How will this new technology or MLM software feature benefit our target customers?
- How will this new process enhance our target customers’ experience?
Another way to establish a customer-centric culture is to build incentives and rewards into the MLM compensation structure that tie directly to customer-focused behaviors. For example, MLM companies can reward the nurturing of long-term relationships with compensation, bonuses, or rank qualifications based on the number of repeat customer purchases a representative has during a specific period of time.
2. Personalized experiences
MLM companies have a distinct advantage over traditional retailers when it comes to the strong, personal relationships MLM representatives build with their customers over time. By combining this differentiator with a customer-centric strategy and culture, an MLM company is able to maximize its competitive advantage.
Eighty-six percent of consumers are willing to pay more for a great customer experience. And great experiences are rooted in personalization. MLM companies and their representatives deliver personalized experiences in two keyways. The first is by leveraging the data and reporting capabilities provided through their MLM software. Having this centralized, accessible source of customer intelligence should be an essential input to strategic decisions as well as customer-specific experiences.
Customer-centric MLM companies combine data and analytics with the practice of empathy. MLM representatives establish personalized connections by creating shared experiences with their customers. This occurs when reps are able to put themselves in a customer’s shoes and show them how well they understand their challenges and what they need. At the company level, MLM organizations can support these relationships by applying data and insights to product and process development as well as to the tools, training, and support provided to the field.
3. Ease and convenience
The third essential factor behind increased customer centricity is simplifying each interaction. Again, having a deep understanding of who an MLM company’s target customers are and what they want is critical. For most direct selling companies, today’s customer expectations put the emphasis on digital access and ease.
MLM representatives must be available to customers on the customers’ schedules. Increasingly, this means connecting via Ecommerce and social media. As a result, a company’s MLM software should be designed to serve as the representative’s hub for delivering integrated, personalized customer experiences. This makes MLM software capabilities such as replicated websites, mobile responsive design, autoship, customer relationship management (CRM), automated alerts, and reporting essential.
Technology-based tools facilitate the access and ease customers expect without sacrificing the personalized relationships between MLM representatives and their clients. Behind the scenes, these same MLM software tools provide reps with the information they need to simplify operational tasks, which keeps their focus on building customer relationships, making sales, and building their downline teams.