Laurie Ayers Scentsy Independent Consultant Blog
When I was taking under-grad classes one of the most poignant business lessons that stayed with me stemmed from Deming’s PDCA Cycle. The PDCA Cycle is a checklist of the four stages that you must go through in business to get from `problem-faced’ to `problem solved’. The four stages are Plan-Do-Check-Act.
That’s well and good, and I’m sure boring to some – but how does that relate to your direct sales business, right? You can use it with your team or with your individual business. You can use it plan and coordinate your continuous improvement efforts. (I’m assuming any good businesswoman will always strive for continuous improvement in her business and never become complacent or stagnant). Using the PDCA cycle highlights the importance of starting with careful planning that must result in effective action and must move on again to careful planning in a continuous cycle.
Are you still with me? Remember you’re a business owner. I hope you haven’t been running your business willy nilly. It’s vitally important that you run your business like a business if you are to realize sizable results.
You can also use PDCA in team meetings and working with individual consultants to determine what stage improvement projects are at (you may find you’re at stage zero), and to choose the appropriate tools and methods to see each stage through to successful completion.
Here is what you do for your direct sales business for each stage of the PDCA Cycle:
- Plan to improve your business first by finding out what things are going wrong (that is identify the problems faced whether it’s sales, recruiting, personal shyness, lack of product knowledge, computers, etc., and come up with ideas for solving these problems.
- Do changes designed to solve the problems on a small or experimental scale first. Rome wasn’t built in a day. Perhaps you just need some more one and one training with your sponsor, or re-read (assuming you already read it cover to cover at least once) the company policies and procedures, watch a video tutorial, attend a meeting, etc. This minimizes disruption to routine activity while testing whether the changes will work or not.
- Check whether the small scale or experimental changes are achieving the desired result or not. Again, I hope you’re not running your business willy nilly. If you have no way of testing the effectiveness of a change, you may be spinning your wheels for naught. Also, continuously check key business and marketing activities (regardless of any experimentation going on) to ensure that you know what the quality of the output is at all times to identify any new problems when they crop up.
- Act to implement changes on a larger scale if the experiment is successful. This means making the changes a routine part of your activity. Also Act to involve other persons (team members and potential recruits) affected by the changes and whose cooperation you need to implement them on a larger scale, or those who may simply benefit from what you have learned (you may, of course, already have involved these people in the Do or trial stage).
If you’re interested in learning more about PDCA check out `Out of the Crisis’, W Edwards Deming, MIT 1989, or `Kaizen’, Masaaki Imai, McGraw-Hill, 1986.
It doesn’t matter if you’re selling candles or gourmet food or jewelry or skin care or widgets. This PDCA Cycle will work in any business, including your direct sales business. Give it a try!
About the Author: Laurie Ayers is a Michigan work from home mom and a Superstar Director with Scentsy Wickless Candles. She enjoys helping men and women start and maintain a home based business in the US, Canada, Mexico, Australia, New Zealand, Puerto Rico, Germany, Ireland, France, Spain and the UK. To download a FREE Start Up Guide which provides more details about how to start a home business as well as to learn about our compensation plan go to www.thrivingcandlebusiness.com/how-to-start-a-candle-business/ or for updates on Facebook LIKE www.facebook.com/ThrivingCandleBusiness, Pinterest https://www.pinterest.com/lauriepayers/ and Twitter @directsalesblog
By definition, an “incentive” is something that “incites action” or is “a motive.” To look closer – to incite is to “spur to action or to urge”. Likewise, synonyms for motive include “goad: suggests a motive that keeps one going against one’s will” and also “inducement: prompted by deliberate actions.”
Humor me with one more definition: “Bribe: something that serves to induce or influence.” Therefore could one could say that an incentive is a form of a bribe?
Yet every day in the direct sales circle I see advertisements and announcements such as:
“Join my team and get a free xyz” and “Refer a consultant to my team and receive a free xyz.”
Isn’t it true that most direct sales companies have a starter kit and a business opportunity that are supposedly of great value containing all that is needed to start and thrive at a home business? If that were truly the case, what message would a consultant be sending when offering an incentive or bribe (there’s that word again) to people to join her team? That the starter kit and/or business opportunity isn’t a good value?
Or would she be sending a message that she doesn’t believe strongly enough in her self as a leader to encourage people to join her team on merit alone? And in a general sense, who do you think redeems these types of bribes? People who firmly believe in the product, opportunity and sponsor and definitely want to be a part of the company or the people who are in it for freebies without regard to best value?
As a leader, would you rather have team members who are committed to making the business work; who firmly believe they are about to embark on a fantastic journey? Or someone who wants the freebies and who may or may not try the business to see how it goes?
The same holds true for referrals. Any good businessperson will always ask for referrals. She should be confident in what she is offering to know that others would be happy to recommend her and her company to others.
Consider this: You ask an acquaintance if she knows of anyone who may be interested in starting a business. The person thinks about it and then responds in the negative. But then you offer a freebie. Do you think that suddenly the person who couldn’t think of anyone who may benefit from your offer will suddenly have her memory jogged at the enticement of a freebie? Or will she merely give you a referral if she genuinely knows of someone?
I realize this is a controversial topic. Some consultants insist that bribing works. They argue that people love freebies. I tend to agree – people do love freebies. But do they truly work? Do they bring about the desired results? Do they help the bottom line or do they merely increase number of team members without regard to return on investment?
My twenty plus years in direct sales, testing and sampling of this tactic reveal that incentives to join are not generally worthwhile to anyone except the person who accepts the freebie.
We should try to succeed by merit, not by favor. He who does well will always have patrons enough. – Plautus
About the Author: Laurie Ayers is a WAHM from Michigan. She started her first home business in 1988. As a single parent, Laurie has supported her family by working at home as an Independent Consultant and Star Director with Scentsy Wickless Candles. She enjoys helping others start a candle business. You can find Laurie at https://www.thrivingcandlebusiness.com/
Is it worthwhile for your direct sales business to participate in vendor events?
Vendor events are called many things – craft shows, expos, farmer’s markets, flea markets, festivals, bazaars or fairs. Some are one day events and others can last as long as one week. Some are as affordable to enter as $25 per booth while others can cost hundreds of dollars or more.
How do you determine if it is worthwhile to participate?
Do the math and make sure you calculate all expenses, including your time. Also consider the cost of goods sold. A common question is “How much inventory should I bring?” Bring as much as you can afford without going into debt over it. Many experienced direct sellers would not do a vendor event without a large supply of cash and carry. People want it NOW; they don’t want to place orders; they won’t give money to a stranger in hopes that they’ll get the product in a few weeks; they don’t want to fill out any contact sheet – they just want to buy the goods and go. They’ll buy whatever you have – impulse purchases.
Some people set up a small display, without much on-hand inventory and choose to do events in hopes of future sales. That’s too much of a business gamble and far too much of an investment of non-income producing time in hopes of orders later.
Below are some factors to consider when calculating return on investments before deciding to do a vendor event or not.
Based on a 25% commission rate, if the booth fee is $50 you’d need to sell at least $200 just to break even on cost of goods sold – and that does not account for your valuable time, investment in business cards, samples, catalogs, and any display pieces (tables, table cloth, racks, cases, signage, etc.)
If you sold $500 at the show then you’d only profit $125 (assuming you’re at the 25% rate and did not invest any other monies) Figure between product preparations, pack up, travel, set up, time working the booth, tear down and return travel, you had 12 hours invested. That’s earning just a little over $10/hr, yet you still have to deduct taxes from that rate.
That said – if you had on-hand inventory and sold $500 product at the event, you’d make about the same amount of money you’d make at McDonalds.
Take the same above example, only this time figure what you would make if you sold $200 worth of inventory. You’d be working for free and the event would have cost you money. Now figure this example without the inventory or without the sales? Pretty glum picture, isn’t it?
That is not to say that vendor events are never worthwhile. Sometimes they can be very profitable and a great way to advertise to the masses. It is just vital that you do the math first and actually calculate your incomes to expense ratio.
About the Author: Laurie Ayers is a Michigan work from home mom and a Superstar Director with Scentsy Wickless Candles. She enjoys helping men and women start and maintain a home based business in the US, Canada, Mexico, Australia, New Zealand, Puerto Rico, Germany, Ireland, UK, France, Austria and Spain. To download a FREE Start Up Guide which provides more details about how to start a home business as well as to learn about our compensation plan go to www.thrivingcandlebusiness.com/how-to-start-a-candle-business/