Multi-level marketing (MLM), also known as network marketing, is a sales strategy used by sales companies to sell products to the public through direct sales or word of mouth, using independent sales representatives called distributors. MLM establishes a direct relationship between the producer and the customer and eliminates the role of any intermediaries in their distribution chain. MLM has grown into a popular and attractive business model that offers benefits to both distributors and business owners.
For an MLM distributor to be successful, they must be able to sell their products to other people and convince them to enroll in the business. Here, the distributors do not get a salary; instead, they receive a commission on the sales of products they sell as well as on the sales of their team members, meaning MLM promotes a mutual or collaborative revenue stream. That being said, the success of MLM lies in the distributor’s ability to grow, motivate, and empower themselves and their team, along with serving their customer base. Hence, motivation is very important in MLM for keeping distributors focused and achieving their goals.
In this article, we will explore the significance of distributor motivation, their challenges, strategies to improve distribution motivation, success stories, and the future of distributor motivation.
Significance of distributor motivation In Mlm
The majority of distributors are overwhelmed by the challenging and competitive world of network marketing. Many of them are worried about their potential to achieve good outcomes. For MLM businesses to be successful, all employees in the network should work in harmony to strive to sell more and expand the network. When it comes to MLM, motivation is an opportunity to build an effective network and reinforce the distributors’ desire to reach their objectives. Motivation must consider the interests and requirements of each individual and should be transparent and fair. If not, working with a network structure will become substandard and will start to unravel.
The factors that influence the distributor’s motivation can be categorized into two categories: material and non-material motivation. Material motivation deals with financial benefits. High and reasonable commissions and bonuses for recruitment and sales are the most powerful material motivation for the distributors. Additionally, the provision of discounts, gift coupons, travel, and accommodation are the other material motivators. On the other hand, non-material motivation deals with professional growth. They include recognition, promotion, and other rewards that motivate them to achieve more.
Challenges in Distributor Motivation In MlM
Although people are attracted to MLM businesses, the retention rate of distributors is estimated to be less than 20 percent. The potential challenges for these are:
- Inadequate communication and support: Lack of support and communication from leaders or team members reduces the motivation of distributors and leads to a lack of interest.
- Undesired outcomes: Many enter the business aiming for financial or professional growth; any downfalls discourage them from continuing the business. Also inadequate or draining training systems can also demotivate them.
- Lack of faith in products and company: If the distributors don’t have faith in either products or company, they often lose motivation to continue.
- Exhaustion from work: Exhaustion from constant involvement with countless individuals and monotony can distance distributors from MLM.
Strategies for effective distributor motivation In Mlm
It is important to train and motivate the team in a network marketing business. The following are some tips to do so.
- Proper training: Providing proper training and motivating the distributors can set clear expectations for them. This includes educating them on the goals, team standards, compensation plan, products and services, company policies, and rewards.
- Provide support: Leaders or supervisors should make themselves available to the downline employees. Also, be responsive when asked about doubts, and give them feedback on their journey. Providing support can increase the confidence of the distributors.
- Recognizing and rewarding achievements: Make sure to celebrate and acknowledge the progress or success of your team members or team. Also reward them with praise, bonuses, and incentives. These can make them feel appreciated and motivated.
- Encourage teamwork: Fostering a culture of teamwork, cooperation, and communication is really beneficial in encouraging them to bond, grow, and thrive in network marketing.
Role of technology in distributor motivation In Mlm
- Tools are resources. Technology gives distributors the tools and resources they need to get things done quickly and efficiently. From e-learning platforms to remote onboarding, personalized dashboards to performance analytics, distributors can get things done faster, stay on top of their goals, and figure out where they’re weak.
- Training: Through the use of technology, we are able to access a variety of tools and platforms that enable smooth communication between distributors and prospects. We can hold virtual meetings and webinars to connect and deliver training sessions. This facilitates quick and effective communication and the exchange of information.
- Expansion of market: Network marketing is no longer limited to local markets. With both the internet and social media, distributors can reach out to potential customers and hire team members from all over the globe. This has opened up new growth opportunities and allowed distributors to reach a wider range of markets and customers.
Success stories and future trends
The below are success stories of two MLM distributors.
- Tim Foley: He is a former U.S. football player who played for the Miami Dolphins. He then worked as a college football commentator for 15 years at TBS College. After the failure of his fitness business, Foley went on to become an independent owner of Amway. Although he didn’t do well at the start, he’s now a multi-million-dollar Amway leader.
- Ray Higdon: He started his real estate career in 2004 in Florida and made a lot of money over the years. Unfortunately, he lost everything when the real estate market crashed in 2008. He then joined Numis as a distributor. He faced a lot of challenges early on in Numis, but he didn’t want to give up. His determination has enabled him to break records as of February 2011, surpassing a monthly commission of $46,000. He is now retired but spends most of his time giving tips on how to succeed in MLM.
MLM businesses are predicted to double in the future, considering the increase in demand for quality products and people wanting independence in their careers. Therefore, motivating your distributors can bring in additional sales and success.
To summarize, we have seen how distributor motivation can boost individual and company revenue. No business can make you successful overnight; thus, it is essential to work hard and stay determined. The above-mentioned tips can help you and your teammates stay motivated and achieve your goals.