What You Need to Know Before Starting a Direct Selling Business

What Company Is Best For You

When deciding if a direct sells business is right for you, there are many options to consider. There are a lot of reputable companies out there that will enable you to make a nice commission income for selling their products. While some companies might be a perfect fit for what you’re looking for, some companies might not be so helpful. So, how do you decide which company is best for you?

Don’t Be Afraid To Ask Questions

When searching for the best direct sales company for you, the best advice would always be to ask questions. Don’t be afraid to ask questions and do your research. Here are a few questions you could ask before taking that leap into a new direct sales business venture.

1. How much money will you make? Beware of the get rich quick schemes and companies that promise you will make thousands of dollars in your first week. It takes time to build anything of worth, and your direct sales business is no different.

2. Do I have to meet sales quotas? Sales quotas are mandatory with some companies that you sell a certain amount of product within a certain timeframe. If you are not very experienced in sales, this can be very stressful for many people and can cause many to leave a company.

3.What are some consultant success stories? Getting the testimonies of other consultants or reps that have been in the business for over 1 year is a great way to gauge the success of a business. Is there a large turnover rate with reps? What advice can other reps give you to help your business grow?

4. Is training provided? When starting a direct sales business, training is the key to your success. Ask if training is available to you and how often will you will receive it. Be sure to question if training is free or will it cost you extra. What about support? Do they have a consultant’s support group or are you on your own to figure it out?

5. Is their plan based on multi-level marketing? Multi-level marketing or MLM is a strategy in which the reps get paid for their sales as well as the sales of their team members or those they recruit to the business.

6. Are there any monthly charges? This is a very important question to ask. Are you required to pay for products each month, shipping cost, training cost, hidden fees, sales quota fees or late charge fees? Be sure to count up the cost before you set out to build your new business venture.

7. Are there any contracts? With some companies, If you decide the business is no longer for you, are you penalized for terminating your membership. You are required to sign a binding contract with the company stating that for a certain amount of time, you will continue to pay the monthly fees regardless of if you are an active rep or consultant.

Most people start their own business so they can have flexible hours, be their own boss and the supplement or replace their income. Patience is a virtue that many try to skip. Business building takes time, patience and hard work. Keep your real goals and mind when you are evaluating the companies out there. And remember to ask questions!

Beginning Real Estate Investors Spend Too Much Time Doing Direct Mail Marketing

The starting investor spends an inordinate amount of time preparing and mailing each marketing campaign. From the outset, a successful campaign requires foresight into which market segments have higher potential for lead conversion. Once determined, the marketer needs to get access to a marketing list, cleanse the data, and then prepare a mail merge campaign for distribution. Lastly, they convert the campaign to hard copy, stuff and mail the completed letters to the prospects. Startups can handle this process for smaller campaigns but quickly find that it is not scalable precisely when attempting to grow their business.

The new investor, having no staff, is often times responsible for each aspect of the business. The challenge is any time spent doing marketing is time not spent doing directly profitable activities like lead conversion. To add further pressure, many have day jobs, which can limit the amount of time available to work on the business. While the established investor might source the lower value activities to a third party or member of their team, the starting investor does not always have the capital or experience to do so.

It is critically important for business owners to begin simplifying and automating any routine tasks in their business so that they can focus their time and energy on value added activities. To simplify they should streamline decisions and manual effort through processes and by leveraging external sources. When starting out it is both cost effective and conservative to work in the business alone. However, long-term growth achieved when the owner is working in their strengths and on revenue generating activities.

There are three actions to reduce marketing time and improve business growth and scalability. The first is leveraging market trend information to high-grade the process of choosing a target market segment. Investors should plug themselves into a local real-estate investors association and identify on-line sources for market insights. This will minimize the time spent on the front-end of each marketing cycle to determine where it is best to expand.

Next, it is important to simplify the data-gathering and preparation practices. Many of the online marketing data sources provide complex and expensive tools, which provide flexibility but then take it away by requiring the user to subset their data in awkward ways to fit within their marketing budget. After the data is gathered, the more manual and detail intensive task is data cleansing. The perceptive investor simplifies the reoccurring data gathering and cleansing tasks through easy and low-cost means. Finally, the task of preparing the mail campaign for distribution should be outsourced as soon as possible as it is the single biggest time sink and is not scalable without assistance.

Taking these steps will greatly minimize the time-spent marketing and leave more time for profit generating tasks such as working with and converting leads. Automating and simplifying is an important step to improving the scalability of business operations and preparing for business growth and expansion.

Introduction to Marketing – Part Nine: Communication and Relationships

Part Nine: Communication and Relationships

Promotion and advertising is the cornerstone of the marketing plan and marketing department, requiring a strategic plan to work out the best way to leverage marketing efforts to successfully promote a product.

The Promotion Mix

The promotion mix consists of advertising, personally selling, sales promotion, public relations and direct marketing, utilising the main elements of the original marketing mix. It depends on the product, industry and market as to which of the promotions mix to use, however usually a combination of two or more is the most effective way of communicating and sparking the interest of the target market.

Common trends have blurred the lines between which promotion method works well, and consumers today require very tailored messaging for them to actually pay attention to the marketing activity itself. “Same old” advertising is starting to get lost in the clutter, to be replaced by innovative and viral campaigns that engage consumers.

The IMC Approach

Integrated Marketing Communications (IMC) is the approach where all marketing efforts utilised by the organisation from the promotion mix communicate a clear, consistent and compelling message about the product or organisation themselves. Shifts in communication and message should be done slowly overtime, rather than confusing the customers by promoting inconsistent messages. IMC is a way that an organisation manages its entire portfolio of communication.

The Whole Communication Offering

An organisation is constantly communicating messages to the target market. These include:

(1) Planned and deliberate messaging: via the promotion mix

(2) Product messaging: via the marketing mix (such as price, distribution, etc)

(3) Service messaging: via interaction with the customers themselves

(4) Unplanned and uncontrollable messaging: via gossip, external publicity, reviews, rumours and other external environment buzz.

An IMC plan will ensure that an organisation presents a united, solid communication front to customers: this means the management of all contact points of an organisation and product (what is said in the promotional mix, confirmed by the unplanned messages, and performed via the product and service messages).

Elements in the Communication Process

All messages follow a process:

(1) The sender creates the message and encodes. By encoding, this means the process of creativity of the message.

(2) The message is then send out via the medium chosen. At this point is must also compete in amongst what is known as ‘noise’- these are all of the conflicting messages and all other interference that can distract the target receiver.

(3) Once the message is received via the medium, the receiver must decode the creativity of the sender, which is heavily biased by their own perceptions, judgements and past experiences, to finally receive the message.

(4) After this, a response action is triggered, whether it be dismissal, negative, positive, purchase, and so on.

(5) Concluding the action, feedback from the receiver to the sender is sent, which must also go through the ‘noise’ or interference factor before the sender can use the data.

Different elements of the promotional mix approach this cycle in different ways. For example, personally selling is effective because it completes the cycle entirely in almost one transaction, whereas Public Relations campaigns are slower and can experience high amounts of noise.

Developing Effective Communication

(1) Identify the target audience

(2) Determine the objectives and goals of the communication message

(3) Design or encode the message creatively, catered to what would spark the interest of the target audience.

(4) Select appropriate channels

(5) Establish a budget for this message so as to determine best use of resources

(6) Determine which elements of the promotional mix to utilise

(7) Measure results

(8) Manage the IMC system

(9) Collect data on this experience to improve the next message

Reach and Frequency

When it comes to marketing communication strategy, reach and frequency are the two main factors that must be decided upon.

The reach is all about the level of access to the target market. How many segments within the target market need to be accessed? What times? What demographics? Which media do they use?

The frequency is about how many messages through those reach channels, above. If, for example, a magazine is the selected medium, then how many issues is the communication present in? How many times does the advertisement run on television? And so on.

There tends to be an “S”-shaped response curve that occurs with frequency and effectiveness that all marketers must take into consideration. It is generally accepted that a low frequency of communications, such as between zero and three exposures, is not very effective at all. A medium frequency, above this, gains a high acceptance with the target market and thus is very effective (usually between three and ten rapid exposures). However a high frequency starts to lose its effectiveness and can even become negative if the target market becomes saturated and over-exposed to the content.

Advertising

Advertising, also known as paid-promotion or ‘above the line’ marketing is any communication message that is paid for by an organisation to a medium sponsor (such as a television station, a magazine, a bus shelter, a billboard, a radio station, and so on) that presents and promotes a product, non-personally. This means that it does not involve a personal, one-on-one interaction.

These kind of promotion offers the organisation almost complete control of the message as they can purchase a space and advertise however they’d like, within reason. This is usually the most expensive and competitive form however is extremely effective.

Marketers today, however, face a lot of challenges in advertising as there is a lot of noise and consumers are starting to filter out the ‘same-old’ advertising thrown constantly at them. As consumers are becoming more de-sensitised through over-exposure, marketers have to be far more creative to cater better and more effective messages to the target audience.

Marketers now tend to use different forms of advertising, such as ‘crowd-sourcing’, which is getting the target market actively involved in the advertising and creativity for a reward. This has large uptake by a target market as they feel involvement as worth their attention.

Advertising has five functions when being utilised: informing, persuading, reminding, adding value, assisting organisational efforts and favourability. One message can perform one or a combination of all of these functions. Favourability tends to be utilised more today- if a message is liked by an audience, it will tend to have more cut-through than an ad that rubs the audience the wrong way.

Public Relations (PR)

This is known as ‘below-the-line’ marketing and involves creating good relationships with the organisation’s publics and stake-holders through favourable publicity, positive corporate and product image and managing or debunking unfavourable rumours, reviews and messages.

PR can be positive or negative and can function as an outlet for information or promotion, depending on the context. Unfortunately, PR isn’t always in control by the organisation. Whilst some forms can be intentional, such as a press release, sometimes PR can be written or circulated without the knowledge of the organisation. Organisations such as Greenpeace tend to use witty PR campaigns to gain momentum for the causes within the community.

Event Sponsorship

Event sponsorship is a form of PR, where an organisation pays to be an official branded sponsor. This kind of PR allows for positive brand association with the event. However, for this to be a success, it is important that the product ties in well with the event- it can be a waste if there is no leverage by the organisation. Just a brand at an event isn’t enough; there must be some related activity such as a stall at the event. A good sponsorship PR campaign capitalises by promoting the tie with the event.

However, with event sponsorship, ‘ambush marketing’ threatens to take advantage of such events. This is where an organisation will advertise with the event’s theme unofficially so as to appear to be a sponsor and steal the limelight, when they’re in fact not.

Experiential Marketing Campaign

A good way to gain positive PR is by letting customers trial a brand or product as an experience so that they consume the brand in a favourable experience setting and then share this with the market. For example, wine tasting in a beautiful vineyard or sports drinks during a volleyball game on the beach.

Sampling is another similar example of this, where consumers are given access to free trials to promote the product and break through distrust barriers.

Sales Promotion

Sales promotion is a short-term incentive given to customers to spur and increase purchase behaviour, such as the push and pull strategies discussed above. These can come in the form of discounts, buy-one-get-one free, coupons, lotteries, competitions and so on.

It is important, however, than an organisation avoids the sales promotion trap, which is over-incentivising to a point where the discount becomes the norm and the organisation can no longer remove the promotion.

Diverting can also occur. This is where someone or an organisation avoids the restrictions of a sales promotion, purchases these discounted goods in one region, and then sells in a non-discounted region.

Direct Marketing

This type of promotion began with physical mail marketing and has evolved to email and mobile phone marketing. Basically, it is any form of advertising that utilises an interactive media to gain a measurable result and response at any location.

Unfortunately, direct marketing tends to bombard consumers, so a good ‘call to action’ together with something that sparks the interest and curiosity of the target market enough to get them to respond.

The Internet’s Role In Marketing

The internet is a fantastic resource for marketing efforts. It can perform the following functions for an organisation:

- Public relations
- Investor communications
- Customer service
- Prospect qualification
- Product sales
- Customer interaction and feedback
- Internal communications
- E-Commerce

It is very important that the use of the internet is consistent with the marketing strategy as, because it can perform so many simultaneous functions at once, all must be correctly utilised and managed to ensure a united front and message (a good IMC).

The internet’s use has shifted greatly from simple websites to completely out-of-the-square marketing efforts such as interactive social media campaigns, mobile device marketing and so on.