| Channel Conflict | Solutions | Licensees | Partners | About | Client Login | Contact |
Direct Selling - MLM
Summary
| ||
 | |
The Challenge
As a Direct Sales Organization (DSO) reliant upon multiple levels of distribution to bring your products to market, your Consultants (sometimes known as distributors, agents, sales representatives, etc) are vital to your success.
Existing and prospective customers are looking to the internet to purchase your products as their popularity and demand grows. The next generation of consumers is relying upon the internet more and more to save them time. Competitive products are being sold online by companies that are not dependent on multiple levels of distribution. Of equal importance, your direct competitors are selling online through their Consultants, using channel management strategies and software to remunerate for online sales at all distribution levels.
Your challenge is to help your Consultants maintain and build relationships with their customers online and offline: offer convenient and simple online product ordering 24/7/365, attract new customers and allow those customers to choose which Consultant they want to work with, and prevent customer defection while remunerating your Consultants at all levels of distribution.
The Solution
Reshare offers Collaborative Channel Commerce® (C3) for eCommerce. It is a patented software and technology solution that allows a DSO to sell its products directly from its website WITHOUT alienating its existing Consultants. Reshare acts as a third party that is invisible to the customer. We apply the brand's existing business rules from the offline world (e.g. percentage "commission" to Consultants) to online sales. While a customer has the convenience of ordering in the privacy of their home at their convenience, 24 hours a day, seven days a week, the Consultant is never circumvented.
To assure the relationship between Consultants and their customers, customers are required to choose a Consultant at some point in their online shopping experience. Depending upon the DSO's preferences, this may be upon entering your website, browsing products, adding products to a shopping cart or at check out.
Similarly, new customers are prompted to select a Consultant based upon the MCO's business rules. We work with the MCO to determine the question/manner in which customers are asked and Consultants are presented online. An example might be, "if you needed to return or exchange your product, who would you like to have help you?" Consultant Bios, interests, or other relevant information can be presented to help a new consumer choose a Consultant. In the case where the customer has no preference, any number of geographic, performance based, business building, or randomizing algorithms can be used to make the selection.
Best Practices
There are a multitude of DSOs that have yet to adopt the best practices achieved when using the Reshare methodology. A 2010 study of 500 DSOs reveals the following:
- 31% have no eCommerce capabilities whatsoever;
- 22% have restricted eCommerce capabilities wherein consumers cannot purchase from the DSO without first contacting the DSO manually through phone, fax or email to get a Consultant assigned to them; and
- 16% are selling online direct-to-consumer without compensating their Consultants at all!
Reshare's methodology assures that consumers can buy from DSOs 24/7/365 while assuring that a relevant Consultant is chosen and remunerated while giving consumers who would prefer to shop without the direct involvement of a Consultant, the ability to do so.
DSOs selling direct-to-consumer without remunerating their Consultants are destined for failure as a DSO. The idea defies the very tenets of a DSO, leads to Consultant defection, festering brand loyalty, and reduced sales.
DSOs not selling online are willfully giving away market share and profits for themselves and their Consultants.
Some of the benefits of DSOs utilizing the Reshare patented methodology are:
Gaining Incremental Sales Through Existing Customers
Regardless of how large and far reaching a DSO is, Consultants cannot be available to every customer 24 hours a day, seven days a week, nor can they attend to more than one or two customers at a time outside of a group setting. Online sales allows Consultants to serve all of their customers all of the time and all at the same time, if needed. Geographic barriers, time of day and availability of Consultants will not hamper an online purchase. Furthermore, DSOs have the opportunity to cross-sell/up-sell based on previous online ordering behavior, survey information, with a level of technological sophistication that Consultants cannot duplicate. All of this translates into incremental sales.
Gaining Sales Through a New Kind of Customer
Serving customers who are not interested in the relationship building and social aspects that Consultants offer represents a very important and often overlooked marketplace. Products offered by DSOs are no less valuable or meaningful to these people; however, the psychology involved in their buying process is not conducive to the techniques used by Consultants. DSOs can provide these new customers with all of the same products, support, and services using C3 and apportion profit share to an appropriate Consultant at the same time.
Augmenting your existing Sales Model
DSOs usually have a longstanding reputation for quality products as well as an offline distribution system that works well. Aside from internal initiatives to evolve business as needed over time, there is no reason for a DSO to change into something completely different from what it is. Reshare's C3 solution does not, in any way replace or change a traditional offline model that is working. It creates the opportunity to bring in incremental online sales from a new kind of customer as well as from existing customers who are increasingly going to the internet to buy.
Supporting Consultants
Consultants are critical to DSO business regardless of how large internet sales are. For DSOs to sell online in direct competition with its own Consultants is a strategy that causes ill-will with those who support the DSO. If DSOs lose their Consultants, their business fails. Similarly, to engage in eCommerce but then give Consultants less profit for online sales than for offline sales is also a strategy that creates conflict. In order for acceptance and advocacy on the part of Consultants, they need to benefit from online sales just as they do offline.
Brand Control
Brand is the relationship between people and products the culmination of thoughts, essences, feelings and beliefs each of us has towards a given product or service. It is a summary of what a customer expects of a product, over and above the product or service itself. Brand is arguably the single most important asset a company has. Opportunistic online vendors fill the gap where brand owners fail to serve their brand-seeking customers. When DSOs do not offer their products online, brand-seekers resort to online suppliers such as Amazon and eBay. Although the customer's personal experience with a Consultant remains intact, the brand is undermined by association with these lesser channels. Of potentially even greater importance is the impact that lesser channels have on prospective customers who categorize your products among the inferior brands that surround it on these sites.
Preventing Customer Defections
Customer Defections attack profitability. Customers are intolerant of any company that does not meet their needs in the Internet age. Inaccessible or non-existent webstores often causes defection to another product or brand. A Harvard University study written by Frederick F. Reichheld and W. Earl Sasser, Jr., entitled "Zero Defections: Quality Comes to Services" shows that by retaining just five percent of your customers, profits rise by no less than twenty-five percent.