Did you know that the average direct selling company experiences an annual retention rate of only 20% for new representatives?

It’s shocking, but who wants to be average? Wouldn’t you rather your company be better than average? You bet you would!

Before telling you what you can do to raise your rate of retention, let’s first discuss why people leave in the first place.

High Attrition

The rate of attrition of independent representatives of direct selling companies is high for many reasons. Here are just a few of them:

Direct selling is a “sales” job, but the average person joining a direct selling company may not view herself as a “salesperson.” While people are often led to believe that it is easy and that great products are all that is needed for customers to flock to them, success isn’t guaranteed for everyone. Sales isn’t always easy.
Fear of failure is another reason. Some people join direct selling companies with high hopes, but never achieve success because they’re afraid to try.
Life gets in the way. Kids have daily activities. Many representatives work a full-time job and/or have other commitments that compete for their time.
Many companies don’t provide enough training or support.
When a rep calls with an issue that is important to her, the company doesn’t respond rapidly or at all.
Money may not be a big issue. Money is not always a big motivator. The rep may only need a little extra spending money each month. If your income opportunity is perceived as difficult, the pursuit of it may not be worth the effort.
Unmet expectations are another cause of attrition. Some companies promise incredible but unrealistic earnings that can be made immediately but fail to help the representative to get there or to get there soon enough if the income potential is real.
Many join for social reasons. Some people have high social needs and if they can meet regularly with others, direct selling can fulfill those needs. However, if after they join and they are not able to obtain the social input they desire, they will spend their time elsewhere. Here again, money may not be the primary motivator.
When people feel disconnected during an activity, they tend to drop it. Independent representatives who don’t feel they are part of a community will check out from it.
Compensation plan problems also contribute to attrition. It is not uncommon for direct selling companies to have deficiencies in their compensation plans. When this happens, many representatives will feel it is not a benefit for them to work anymore and so they will quit.
A lack of discipline is another significant cause of attrition. Becoming a representative, starting your own company, should mean that you still act as if you are working for someone else by setting hours that you must work, making cold calls, following up on other calls, tracking inventory, etc. Without a boss, many people lose their willpower to stay focused on the tasks at hand. They have not been taught that the calendar is their new boss.

The list above is incomplete. To learn all 25 of the reasons people quit, watch the entertaining video!

Despite all the things that contribute to attrition, direct selling companies thrive because of the determination and success of those who stick with it.

5 Categories

Each of the 25 reasons that representatives quit falls into one of the following 5 categories:

Product quality/pricing challenges
Insufficient support, communication, and education from the company, sponsor, and uplines
Insufficient training and tools
Compensation deficiencies
Unmet expectations

Conclusion

Are you feeling a little better now? If you are thinking you can work with the list of 5 categories, you’re right. You can. You can address each of the “big” issues in your business. There is work to be done, but it will be worth it.

The best direct selling companies have a retention rate of 60%, which is 3 times the average rate. For help to get there, call Sylvina Consulting at 503.244.8787.