Sunday, 18 January 2009

Tactical Victory Or Strategic Disaster?

Next week I'm facilitating a group of European Sales Managers to develop their sales strategy for the next few months - it's tough out there and they're wondering how to bring in nearly $100million in the next quarter. Why would you want to know this? Well, while preparing for this task today it seemed pretty obvious to me that they have the same challenges as so many of the mlm operators I meet.

In these tough economic times so many sales people are told to "get out there and sell, sell, sell!" to the point where they get desperate. The same desperation can quickly develop in the network marketer if they fail to think and act strategically (see Obstacle #4 in my Manifesto. Download it here if you don't already have it...) and only focus on the tactics.

Imagine this situation: you've been talking to a prospective recruit for weeks, building a rapport, telling them about the details of the products and compensation plan on offer, and so on. You have so much in common it seems, that they are 100% going to sign up any day now. Except they don't. Much to your surprise. You see, they went with another mlm operator, with a different mlm company which actually offered a slightly less attractive proposition.

So how come you've lost this recruit? All that time you spent is now wasted - you can't get it back. For many mlm operators, especially in the early days of start-up, time is a very scarce resource, and you can't afford to waste it with all this effort to recruit an individual who then doesn't go for your downline - perhaps one reason why the automated downline building and recruitment websites are popular...

What you didn't do was think about your strategy - you were only focused on your tactics. What does strategy in selling actually mean? Well, in this case of ours you didn't think about competition, in the form of the other mlm company. You didn't think about the fact you were selling to more than just 1 person - you didn't have to influence 1 person to decide to go with you, you also had to get their spouse on board. What your competitor did was to get the spouse interested and 'sold' on their offering as well. What you did was not even realise the sales situation was more complex than you thought. You can't just 'get out and sell' like this and expect a good return for your efforts.

So as you set about your recruitment campaign, think on the following:

  • Who is your ideal recruit - what kind of people do you want in your downline? (And are you prepared to reject those that don't meet your criteria?)
  • Who else other than the recruit needs to be 'sold' on your offering?
  • What needs to happen for all parties involved to feel comfortable giving you the 'sale'?
  • Your biggest competitor is not some other mlm company or even downline builder, it's the inaction of the prospect/recruit - what can you do to overcome this apathy?
It's my experience that most sales are lost not because of price or an unattractive proposition but because of a lack of a process for making sure both the tactics and the strategy are taken care of. Now while it's true you can learn a little more about processes in general in my Manifesto (see Obstacles #5, #10 specifically), it seems to be the case as well that having a process seems to require more time, and so operating a sales process may mean that you can only build relationships with 1/2 or even 1/4 of the number of people that you could without a process. Yet you are more likely to have a conversion rate of 80% than the much lower rate (less then 20%) when no process is followed. So while you may seemingly talk to less the relationship is a higher quality one, and you are engaging with just the kind of people you want.

Simple maths tells you that for the situation with the sales process, 0.8 x 0.25 = 0.2 or 1 in 5. And if you have a conversion rate with no sales process of at best 20%, you will, at best, have 1 in 5 successes. Which relationship will be the more enjoyable and fruitful in the longer term? The numerous but quickly and arguably, shallowly engaged one, or the one where you take more time to really understand what is going on, and where there is a deeper personal connection. Which situation is going to result in the person staying with you longer?

So, with your next sale/recruit - are you on the verge of a tactical victory, or a strategic disaster?

Happy recuiting & selling!



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