3 Pitfalls Direct Sales Companies Should Avoid

Oct 21, 2020 7:30:00 AM / by McKinley Oswald

To view the full video of McKinley’s Masterclass with Craig and James click here

Over the years, one of the most common questions I have been asked by people starting direct sales companies is: “What pitfalls should I avoid?” There are so many things to focus on as you start or grow your direct sales companies that it can feel overwhelming. Products, compensation plan, distributors, tools, starter kits—how do you do it all right, and what mistakes can you avoid?

Direct Sales Masterclass - Craig Fleming and James Porter

In a recent Masterclass conversation, I discussed this topic with Craig Fleming, Partner at ServiceQuest and James Porter, VP of Sales at Verb.


So, what are the most common pitfalls and what can you do to avoid them?



Pitfall #1 —Thinking you can do it all on your own

Many companies and executives feel like they want to handle everything internally. This pitfall is easily avoidable by hiring a consultant (ServiceQuest is a great option here) or ensuring you have executives with industry experience. The emotional rollercoaster that start-ups experience can be avoided by having others with experience help you. This same pitfall can be made by companies that venture into new markets, different product lines, or unique opportunities. Relying on others who have been there before is critical for start-ups and long-time direct selling companies.


Pitfall #2 —Failing to check your ego at the door

Frequently, executives rely on their ego for what they have accomplished previously. Learning to realize “you don’t know what you don’t know” can be a big step to avoiding this pitfall. The smartest executives in the industry surround themselves with team members, executives, mentors, and supplier companies who know more than they do. Surrounding yourself with this wealth of knowledge can help you avoid pitfalls and achieve the success you desire.


Pitfall #3 —Lacking a written strategic plan and the tools to get you there

A plan that is just in your mind isn’t really a plan. Getting a formal plan in place can give you the checklist you need to succeed. ServiceQuest helps onboard seven new direct sales companies a month. Having a plan that covers your company’s mission, its values, the culture and the unique selling proposition. Most companies don’t have this. And, most companies don’t have the tools to put the strategic plan in place. Verb and ServiceQuest have worked with dozens of companies to help them get their plan in place and have the right tools (digital and physical) to execute the plan.


It’s All About Retention

The question your company should be asking itself is: How do we get 80% retention? Knowing what your current retention rates are and having goals to help increase those is a key starting point. And, it begins from the very first day that you bring a new person in with their enrollment and on-boarding process.



Some key retention questions:

  • What is the onboarding experience like?
  • What type of training do you have in place?
  • How does your company’s technology aid in the onboarding process?
  • What is the journey we hope to take them on in their first 90 days?
  • How do we get each new distributor a check for $100 in their first 30 days?
  • What tools are we giving them upon enrollment to help them succeed?

ServiceQuest has a list of 200 items that make up a perfect onboarding journey for a new distributor. It’s everything from how customer service supports them to how you get the new person a check in their first 30 days. Companies that succeed in this area implement steps that keep the new enrollments engaged in their first 90 days so that they feel welcome and they succeed.


Verb’s platform includes a powerful mobile LMS (VerbLEARN) that helps with onboarding and provides a gamified experience to the learning and training process. It also notifies the upline as they progress to ensure that they get the recognition and support that they need as they go through the on-boarding process. Verb’s sampling platform provides a customer acquisition tool with 20%+ conversion rates to help ensure they can successfully enroll new customers and get their first check. Simple tools like this can ensure that someone gets started, and that they get started right.


Verb’s Retention Case Study

Recently, one of our clients came to us with some telling data from their app onboarding experience. They had been averaging just over two months for retention for new business builders. The case study found that new enrollees who accessed the app (and the onboarding system) in month one had an average retention rate of over 6 months. TAKEAWAY: This is a 3x increase. Having the right onboarding tools to help new people succeed can have a massive impact on your retention numbers!


Keep It Simple!

Simplifying your company’s stories and aligning with the right tools can help you overcome pitfalls and achieve the success that your company desires. It comes down to making it simple in everything from the company’s message, the compensation plan takeaways, the customer acquisition journey, and your company’s product stories. Simplifying things without removing the uniqueness and value your company offers is key to your success.



This type of simplification should be a focus for everything that is involved in your strategic plan. It can include your starter kits, your messaging, your company’s website, the tools you offer, how your people get paid, and the ways you communicate to business builders and customers.


If you don’t have a strategy, then you can’t control the direction that you travel. Implementing these basic tips can help you overcome pitfalls and create momentum for the growth you desire.



Topics: Business, McKinley Oswald, Leadership, Team Verb, James Porter, Craig Fleming, ServiceQuest

McKinley Oswald

Written by McKinley Oswald

President of Global Sales for Verb

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