A team that understands people and knows how to bond with prospects will always outperform the team that memorizes their presentation. Building a smart and nimble team can take time, but if you want a business that can withstand hard times and flourish in good times, you must be bullheaded with your determination to train and mentor people to think and listen instead of just memorizing facts.
In the Ultimate Sales Machine, Holmes gives us 6 steps to set you up for great follow-up after getting a client or enlisting a new member to your team. The 6 steps below are inspired by Holmes.
1 – Create rapport. What professional goals did you note during the first meeting? How can you help prospects achieve those goals? What personal tidbit, common interest, or funny story can you refer to later to remind them of your bond?
2 – Qualify and establish need. Do you understand prospects’ needs and objectives? What are the dreams and aspirations of your prospect? What are their most pressing problems and how can you solve them?
3 – Build Value. What do they consider valuable? What benefits or addons would appeal to them and build the value around your product or service?
4 – Create desire. What are their hot buttons that can increase their desire? What is the pain point that you can use to remind them of why they bought and why they will want to keep buying from you? Remember that people naturally gravitate away from problems toward solutions. Is their current career matching up to their dreams and goals?
5 – Overcome objections. What are their objections and how can you put them to rest? Do they really want to join your team or buy your product but a small obstacle is keeping them from doing so?
6 – Close. What closed them or caused them to join your team? Do you remind them with regular contact or product updates?
Most businesses teach their people to be stupid. Yes, being stupid is actually encouraged. I have heard many people even say, “It does not matter if it works, only if it is duplicatable.” What? So if something is working for you and your unique personality, stop doing it because the next guy can’t copy what you are doing? It is time we get something straight, unless we focus on teaching leadership and thinking, we are teaching the people of our organization to be mindless followers, not productive leaders.
The great book Linchpin talks about how the robber baron millionaires from the early 20th century used uneducated people in their sweatshops to make themselves rich. Andrew Carnegie even decided that education caused violent strikes and hurt his business. The robber barons decided about 100 years ago that if they wanted to be really really rich, they needed compliant uneducated factory workers. Workers who will be productive and willing to work for less than the value that their productivity creates. This system worked for a long time, but today, the factory system is breaking down, just ask General Motors.
Linchpin says that schools should teach two things:
- Solve Interesting problems
Memorizing is what is taught in school today, not problem solving or leadership. The whole education system is based upon passing an exam, not creating leadership skills or decision-making abilities.
Leaders in direct sales organizations have been teaching their “factory” workers for years to say the same things, memorize little sayings and get together once a month for a shot of enthusiasm to keep them from quitting too early before they can sell them some more presentation tools or product. Many entrepreneurs and members of direct sales organizations mock traditional education. Let me tell you, direct sales has a failing grade in real education too. It is time to start teaching our people to solve real problems and lead, not just memorize if we want to thrive in the new economy.
Times are changing my friends, we live in the new economy of an information age. Just teaching a budding sales person or field marketer to follow an easy presentation will not build that person into a leader. Entrepreneurs who are taught to memorize a certain pattern and copy it exactly are no better off in the long run, and neither is your business. If you want to keep churning people, teach them to follow a set, non-thinking presentation. If you want to build a business that lasts, teach them to think.
Supplement sales are up in direct sales, unless you are in network marketing. In my last blog post I guessed that network-marketing supplement sales were down as a result of much lower traffic to their websites, but I wanted to find out if I was off or not. It turns out that lower traffic to network marketing websites has definitely resulted in lower sales.
If sales are up everywhere else for nutritional products, besides price, what else could be wrong with network marketing? Why would sales be down for network marketers if they were up everywhere else? Is there something wrong with the leadership in network marketing for sales to be lower across so many companies?
According to Nutrition Business Journal the Internet and other non-network-marketing direct sales companies had a banner year in 2009. As people lost their job and benefits, they turned to preventative health, which means increases in supplements. So, once again, why are sales for nutritional supplements down for network marketing?
There are many network marketers who claim that when the economy is slow, network marketing booms. In 2008 MLM author, Rod Cook, wrote, “When recession hits the economy, network marketing booms.” Cook even claims that during past recessions network marketing showed explosive growth. Not so in today’s recession.
I am a small business entrepreneur. I have made money in ventures inside and outside of network marketing. I have many friends involved in network marketing and I am a major stakeholder in a network marketing company. I do not write this article to try to hurt network marketing. I write it to show that network marketing is not currently capturing the hearts and minds of consumers. If this trend continues, network marketing will be set back many years.
In my next post I will explore some of what I have seen across multiple companies that I believe to be hurting network marketing. I believe that government agencies can try to stop bad practices all they want, but in the end, the market corrects itself and that is what I see happening right now.
There is good news and bad news for direct sales nutritional companies. The good news, the recession has not decreased demand in the nutritional supplement business. In fact, supplements are selling quite well in the consumer market place. In a Packaged Facts survey, 63% of adults surveyed have taken a supplement in the last 12 months. That is phenomenal news if you are selling supplements. The bad news for network marketers, people are more price conscious than ever and let’s face it, network marketing has never quite matched up with Wal-Mart’s pricing.
It is time to get a little real, network marketers. Yes, I am talking to the big distributors and company executives here. It is time to acknowledge what the public is saying with their checkbooks. The public is buying more health and nutrition products, but not from you. Few network-marketing representatives encourage retailing and instead tell their downlines to focus on the business opportunity and personal consumption. The problem is that there is only a small percentage of people that make sustainable money with their downlines. When people don’t make money, they look at how much they are paying for their $30 bottles of juice and switch back to Wal-Mart multivitamins and $4 orange juice.
The CEO of Dominos pizza recently said, “We are going to learn and we are going to get better.” Dominos even has the guts to post customers’ pictures of bad pizza and apologize to those customers via text message software. It is time for network marketing to step up and admit that, although we have a great form of distribution, we also have some issues that need to be addressed.
We can get better, but we better start looking at some facts. In order to pay commissions of 40-50% on a product, network-marketing companies must mark up their cost 6-10 times. As a result, the product value can suffer at the expense of the opportunity. We can preach product value all day long, but if it is too expensive, the public will stop buying. Network marketing works because of the opportunity. I am not encouraging that to stop. On the contrary, I am saying that the days of over priced supplements for the sake of the opportunity are fading quickly.
Before you start thinking I don’t know what I am talking about look at these numbers. Packaged Facts shows that supplements continue to grow steadily in sales with the market steadily progressing from 5.5% annual growth in 2007 to 6.5% in 2008 to 7.5% in 2009, bringing U.S. retail sales to $9.4 billion in 2009. However, as supplements continue to increase in sales, network marketing companies’ site traffic continues to decline during the economic hard times.
Company – Monthly Unique Visitors – Yearly Change
Tahitian Noni (tni.com) 15,277 – 36.13%
Monavie (monavie.com) 63,847 – 59.39%
Xango (xango.com) 29,259 – 40.46%
Amway (amway.com) 453,490 +165.68%
Melaleuca (melaleuca.com) 390,923 – 30.80%
Usana (usana.com) 74,994 – 12.93%
Of the list above, only Amway’s traffic has increased in the last year. Amway has reemphasized the product significantly through a multimillion-dollar ad campaign. Few companies have the resources to buy millions of dollars of advertising on the major networks. I purchase some of my supplements from Wal-Mart and I have never seen Wal-Mart advertise vitamins on television. (By the way, Wal-Mart accounts for 43% of supplement sales in the Packaged Facts survey.) Perhaps it is time to reemphasize the product value through education and better pricing rather than emphasizing the opportunity so much.
Getting people to buy product with the pitch that they will eventually make a ton of money is not statistically sustainable. However, selling a great product that people want regardless of opportunity will always improve the bottom line.
I am a fanatical entrepreneur, I admit it. I love the thrill of attempting to organize chaos. I love taking new and undeveloped ideas and making them a reality. I love challenging myself and others. I started my first business when I was 8 buying candy in bulk from a wholesaler and selling it to the neighborhood kids at retail. I have helped raise millions of dollars for two startups and I have had some great successes. I have also had some miserable failures.
For you new business owners and also you job-laden entrepreneurs seeking to strike out on your own and throw so-called security to the wind in hopes of achieving the seductive dream of riches and independence, I speak to you. I embrace you, my fellow entrepreneurs, and applaud that fire in your belly that keeps you up at night seeking something more, but I also have a couple of suggestions and warnings.
1. Estimate how much money it takes to run your own business, then double it. Felix Dennis
, a famous magazine publisher, described how to get capital: inherit it, steal it, win it, marry it, earn it or borrow it. I certainly don’t advocate stealing it (and few of us are lucky enough to marry, win or inherit it), which means most of us must earn or borrow it
. Never underestimate the financial requirements of getting a traditional business off the ground. If you fail to properly finance your company, you will never be able to gain enough business momentum to make it past your first year.
2. Learn how to deal with people and study the art of sales. If money is tight, consider a business that needs little startup capital such as a home-based business or consider taking a commission-based job before you venture into business ownership. There are many companies that have tremendous sales training and educational systems that teach you how to make money from sales-based activities. If you can’t make a living selling, you will struggle to make it as a business owner. Business owners must sell to prospects, employees, vendors and their significant other. However, in addition to their sales responsibilities, business owners also have the combined duties of company accountant, gopher and janitor. Learn people skills and get a sales background, it will become invaluable as you grow your business.
3. Have a written plan. After a couple illustrious childhood entrepreneurial ventures of selling candy and mowing lawns, my first real venture into financing my own company came in 1996 when I put $10,000 on my credit card to have an online information portal built by a local web design company. The site was built on the latest technology and was a great reference tool. It was everything I dreamed it would be, but I had forgot to figure out how to monetize the thing. Three months later, I was paying interest at 15%, wondering why such a great site with so many visitors didn’t have any income.
There are many entrepreneurs that practice the philosophy of “Take a leap and a net will appear.” I know I sure did in the beginning, and I have to fight from doing it still today. It can be disastrous. Entrepreneurs are confident and often cocky because they truly feel they can accomplish anything out of sure grit and determination. Many entrepreneurs think that they will figure out the details as they go. However, taking the time to properly run some numbers and research new or profitable niches will give you the focus to truly exploit them. You will spend less time jumping from idea to idea and have more time to use your creative resources to sell your product or service.
It does not matter if you are in a home-based business, network marketing distributor, or even if you are working on commission for someone else, a game plan is never a bad idea
4. Spend $500 on an attorney. I went to three years of law school to be better at business, not to become an attorney. Trust me, legal protection is important. For a small investment, you can protect your personal assets by forming the right legal entity or by protecting the partners from each other. If you plan on having a business partner, you better understand the rules of engagement. Partnerships work great until you start making money, or after you’ve lost all your money. Either way, protect yourself by having a good legal entity and a real understanding of your partnership responsibilities. I frequently say that partnerships are like marriage without love. For better or worse, you are stuck together once you open that bank account together. If things fall to pieces, divorces are always easier to settle when you know who gets what.
5. Get Lucky.
Luck doesn’t just happen. I have yet to win more than $5 on a lottery ticket and besides, Vegas-style roulette is a bad way to cover payroll. Edna “E” Mode
from Pixar’s The Incredibles
says it best, “Darling, luck favors the prepared.” Luck rarely finds those unwilling to take a chance. Sweat, passion and perseverance are the most important ingredients to “getting lucky.” Constantly educate yourself on your industry. Study successful businesses. Read books and work hard on finding employees that buy into what you are doing. When you are really prepared, you may get lucky.