Stories in this section:
TOP DESK: Building Business with a “Brand of Gold”:Opportunities and Challenges
The ABCs of Vendor Selection
Managing Compensation Plan Change: A DATA-DRIVEN APPROACH
Innovations in Asian Logistics: SINGAPORE SHINES
Training for Success

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Perspectives and Innovations

If we build it, will they come? That was the big question when, in late 1990, our direct sales task force recommended that the company take the deep plunge into the world of party plan-a world we determined would be the natural next step in leveraging our solid-gold Southern Living brand.

The decision to launch Southern Living At HOME was based in large part on the thousands upon thousands of readers who, over more than three decades, had written in asking where they could find that "cute little vase on page 115 of the June issue," or "that adorable metal basket on page 42 in October." If it had been in the magazine, many readers wanted it. Some had to have it. That is the power of the Southern Living brand.

The decision to launch was also based on the overall growth of the party plan industry in the late 1990s. We knew that at the start of the 21st century, more women than ever would be looking for financial freedom away from their conventional 8:00-5:00 jobs. The trend was apparent. Although we conducted enough focus groups to confirm our decision to launch, many of us needed look no further than our churches or beauty salons to find direct sellers flourishing in our own backyards.

In 2000, with the help of many at the company, we began to build the new infrastructure that could support direct sales. Our core competency had always been publishing and direct mail marketing, so this bold new venture required hiring seasoned direct sales experts who brought new DNA to our management team. And even more important, we had to know when to defer to their judgment as we selected products and built sales and marketing programs to help drive our fledgling business.

We hired people with expertise in global sourcing for product development, people who quickly created a vendor base we would come to rely on. We needed new software, especially reliable software, since our goal was 100 percent online order entry by consultants. Clearly we needed a robust system, and at the time, we found limited "off the shelf " software options.

I often marvel at party plan companies that started "out of the garage," built from the ground up, step by careful step. I marvel because I am acutely aware of, and indeed grateful for, all the valuable resources that Southern Progress Corporation brought to the launch, enabling us to grow at the rate we did. At the top of the list, of course, are financial resources. When our commitment to launch was firm, the investment in product and infrastructure was stout. But we all believed in the potential of the business, since we had come to know both the power of party plan and the power of the Southern Living brand.

Second, we had access to talented resources inherent in magazine and book publishing: photographers, stylists, design specialists, writers; and we had finance and business experts who could leverage our publishing company's purchasing power in paper and print. And finally, we had access to our own in-house programming experts who would come to save the day. Without their commitment to painstaking modification of our software system, our rapid growth could never have taken place.

We began accepting consultant applications back in August 2000, before our launch (and received over 2,000!). Then in January 2001 we flung wide the doors, using an outsourced 10,000-square-foot warehouse, stocked with a modest level of diverse inventory. We shipped those 2,000 Starter Kits, and thought four packing tables should do the job. But how could we have known that, by our second month in business, we would have to expand to a 30,000-square-foot warehouse with 12 packing tables? The applications came pouring in, and the heat was on! (Think of Mickey Mouse in Fantasia with his multiplying brooms!)

By fall 2001 we had expanded to a 50,000- square-foot warehouse with 25 packing tables. As you might imagine, our service was inconsistent. Vendors were challenged to provide sufficient product, our software system was overloaded, and our Consultant Support operation struggled to handle the incoming calls. Nearly 10,000 consultants wanted answers, and they wanted them fast.

During our first two years of operation, we worked hard to maintain our high standards of service in every area of our business. Our sales team became experts at building confidence in the field, while asking for patience. They calmed frazzled nerves, and every day brought new "opportunities" to solve problems. By the end of 2002 our consultant base had grown to over 25,000, and the excitement was palpable as we grew outside the South. By 2003 we had consultants in all 50 states, which was an unexpected phenomenon, given the regional nature of the brand.

The value of the Southern Living brand, with all the positive emotions associated, was pivotal to our early growth. Consultants knew Southern Living would get it right. They knew we always did. Fortunately, the magazine's editor in chief understood the potential of this business and was our partner from the beginning. That partnership ensured that we could weather our growing pains in the early years, from product selection to consultant communication. As we established ourselves in the marketplace, our corporate identity began to shift from one that was quietly dignified to one about which consultants would cheer. This was a paradigm shift of significant proportion.

So how did I feel about starting a brand new business? In 2000 I stepped forward to lead this division after two bouts with a life threatening illness. Why not use my life to help other people? Illness helps teach us that. I knew that I had learned important life lessons I could share with others. I was also a believer in direct sales, having seen the remarkable transformations in my sister's life because of it. I had served on the direct sales task force and understood what lay before us. I have a passion to make life better for other people and-believe me-I've seen just that over and over again.

Once we launched, I never looked back. Yes, my background was in magazine and book publishing and partnership building. Yes, I had "made it" in business. But I knew that through direct sales I could reinvent myself in a way that could have a tremendous ripple effect on people I may never know.

Our philanthropy, CUT IT OUT, fights domestic abuse. It helps fund training for salon professionals to spot signs of abuse in their clients and refer those clients to resources for help. Our partners are the National Cosmetology Association and Clairol Professional. And one of our proudest moments was receiving the Vision for Tomorrow Award from the DSA in 2003. We're raising awareness among our consultants and customers about this social epidemic, and we are saving lives. What could be better?

Today we are still growing, thanks to the hard work and dedication of so many on our staff. We ended our most recent fiscal year with 35,000 consultants and last year moved into a 500,000-square-foot automated warehouse with "pick to light" technology. We've gotten it right, just as our consultants knew we would. We built it, they came-and our world will never be the same.

Dianne Mooney has served as Founder of Southern Living At HOME since its inception in 2000. Recently elected to the Board of Directors of the DSA, Dianne's title is Senior Vice President and Executive Director of the direct sales division of Southern Progress Corporation. Her passion for empowering women to develop their full potential is the driving force behind her leadership.

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The ABCs of Vendor Selection
by Darren Pulsipher

Selecting a vendor can be one of the most difficult decisions that an IT manager makes. There are a number of different approaches that IT professionals can take, such as kicking off a formal RFP (Request for Proposal) process, or relying on decisions made by other teams within the company and sticking to the approved vendor list. Or they can take the approach of flying by the seat of their pants, making decisions based on sheer emotion, the abstract configurations of tea leaves, or the prognostications of astrological charts. Most approaches have their pros and cons, but more important are the principles that are learned from looking at these different approaches.

Understanding and being able to express your system requirements to others is the first principle on which you need to focus. It's a fundamental truth: If you cannot clearly communicate what you want from the vendor, you will not get what you (and your users) expect. Your best approach is to conduct a thorough Use Case analysis of your business requirements and systems.

The first step to a good Use Case analysis is to define the Actors of your system that you want the vendor to supply. So what is an Actor? An Actor is any person, software or hardware that comprises or interacts with your system. This includes any group of people that will use the system, from data entry agents to executives. Make sure you do not forget to include the Administrators of the system-a key Actor. Additionally, you need to include external or third-party software systems that will interact with your system. This will help you identify where the integration points are for the system you are trying to purchase. Finally, make sure you include any special hardware that your system uses as input or outputs.

Spend some time on finding all of the Actors of the system, making your list as comprehensive as possible. Why? Defining the Actors of a system determines the boundaries of the system, and as a result, defines the scope of the system. The list of Actors can be used to enforce adherence to your original plan when feature creep sets in, threatening to consume your project (because it will happen). Once you have defined the system boundaries and built a list of all of your Actors, you need to determine how the Actors will interact with the system. Use Cases are used to illustrate how Actors interact with the system-they are simple action phrases that describe how the Actor uses the system, or how the system uses the Actor.

Seeing the Big Picture
The best way to determine whether you have good Use Cases or poorly formed Use Cases is to try and place the Use Case name in conjunction with the Actor and the system. For example, if you have an Actor called "Data Entry Agent" and a Use Case called "Enter Distributor Information," the interaction between the Actor and the system can be read "The Data Entry Agent enters distributor information into the system."

Sounds simple-and it is. Unless, of course, your Use Cases and Actors are poorly defined. Just remember that the Use Case is not about how the system reacts to the Actor, but how the Actor interacts with the system. For example, if the Use Case is "Store Distributor Information," it shows how the system reacts to the Data Entry Agent entering the data. That is not what you want. It shows how the system should be implemented, not what you want the Actors to do with the system. It's a subtle difference, but a very important one to understand.

One of the best things about Use Case analysis is that it provides a graphical representation. Why is that important? Because a picture speaks a thousands words. It gives you the ability to see the complete system-a total overview of your system and its Actors, all in a single diagram and on one page. So when you bring your vendors into your office to talk about your system requirements, you can pull it up on your screen and walk them through your Use Cases Diagram, providing them with a quick view of your general needs.

Of course, just writing down your Use Cases does not replace the need to meticulously define and document the requirements of your system.

The next step is to elaborate each Use Case with Scenarios. A Scenario is an illustrated sequence of interactions between the Actors and the system. This can be done through diagrams, text, mock-ups of screen shots and by good old fashioned story boarding. Each Use Case should have at least one Scenario to help tell its story. This helps your team visualize their business processes and allows you to refine and/or validate your business processes and workflow.

Doing Your Homework
Understanding the scope of your needs through Use Case analysis is just the first step in selecting a vendor-although, it is probably the most important step.

The next step is to create a rough timeline and determine basic resource estimates for the project. The concept here is simple: Before you announce to the world your intention to move forward with this project, you need to do your homework and put together some kind of ballpark range of what you think it will take to complete the project. This can include a basic cost analysis, timeline estimates, consulting and customization pricing analysis based on industry norms, and any other information you can glean from past projects. Any information you can put together will help ensure you find the right vendor at the right price. Because you've taken the time to properly scope your project through Use Case analysis and Scenario diagrams, this will not be as difficult a task as you might think.

Once you have your estimates, its time to start the vendor selection process. As you begin accepting proposals, you'll want to consider a few things:

Cost comparisons: Don't just look at the total costs-look at each cost component. What may seem like a higher bid may be a better (and more accurate) breakdown of the real costs of the project. The lowest bidders rarely (if ever) make the most realistic bids.

Estimated time to deploy: What is the reasoning behind the deployment time? Does the proposed delivery date meet the business needs? Can more money or more manpower improve the rate of delivery, or vice versa?

Hourly or fixed costs: Most firms will provide a combination, with a fixed bid on an agreed scope, with a much higher hourly rate for overage. Here's one place where a detailed Use Case analysis comes in handy, as a well-defined scope will result in more accurate bids and more realistic cost estimates.

Financial stability of the vendor: Depending on the type of project, this could be critical. A financially distressed company is not the best candidate for a long-term consulting project.

Previous customers: If a vendor offers customer referrals, take them up on it. Ask questions, learn as much as you can about costs, technical expertise, reliability, time to delivery, and so forth.

Proximity: Travel costs can be a huge unknown expense. Ask whether resources are local or shipped from across the country or around the world. Try to get these things included in your proposal.

Service level agreements: How committed is the vendor to your project? What is their response time? What issues are covered, and what issues will cost you additional funds?

Trust your own instincts: In the end, it can all come down to your gut feeling. Two vendors with similar technical solutions, proposals, and history can present you with a most difficult decision. Which team seems like the best fit for your organization?

A weblog maintained by consultant Tristan Yates provides some excellent points culled from his recent vendor-selection-process-gone-wrong. (Read about his experience at http://nobodygotfired.blogspot.com.) His takeaways include:

Don't take shortcuts with vendor selection or project planning. Make your vendors compete with each other during the selection process. Never, ever ask an implementation company for strategy, architecture or product advice. They have no incentive to help you and plenty of incentives to sell you products and services that you don't need at inflated prices.

Know the market. Be able to calculate your resellers' costs and markup. Remember that markups alone don't add any project value.

Check resumes of individual consultants. A $250+/hr consultant should be able to walk on water, and their resume should reflect that. Maintain a list of reliable implementation partners that includes large and small vendors, small independent contractors, and capable in-house employees. Match the talent to the project and use only proven talent on new projects. Run small pilot projects to test vendors, technologies, architectures, etc. This can be done separately or as part of an iterative development cycle.

It all starts with understanding the scope of your project. For those interested in further reading, some great resources for Use Case analysis include: "Use Case Modeling" by Kurt Bittner, and "Applying Use Cases: A Practical Guide" by Geri Schneider.

Darren W. Pulsipher is Director of Information Technology at XanGo LLC and is responsible for strategic oversight of all of the company's technological needs, including IT operations, support and internal process automation. An accomplished author and speaker, Pulsipher has published two books, written more than 50 articles and spoken at a number of industry conferences.

Managing Compensation Plan Change: A DATA-DRIVEN APPROACH
by Ian Thomas

One of the key success factors of any direct selling company is the compensation plan offered to its distributors. Experienced direct selling executives know that small changes to a compensation plan can make a big difference in motivating the field, keeping each level or title focused on the right activities and helping smaller businesses to grow and larger businesses to flourish. However, it is equally true that the wrong changes can be devastating.

Because the compensation plan touches every level of the business, being able to test the impact of a plan’s implementation is important. How a change impacts distributors, as well as the financial implications to corporate should be reviewed and analyzed before being made. Without being able to thoroughly and easily test new concepts, change can be difficult.

In response, compensation plan systems need to be flexible to suit the businesses that are running them. A rules-based, data-driven system, as opposed to a code-based system, can allow for change and testing new concepts without a lot of time and cost. Simply put, it is much easier and quicker to read and edit rules than it is to read and edit code.

Core Differences
Imagine a compensation system that works somewhat like the formula-based tools and functionality that you typically find in Microsoft Excel. If you have used Microsoft Excel, then you know that this program includes a number of basic functions—for example, SUM, SUMIF, AVERAGE, COUNT, etc.—and a mechanism for creating formulas based on these functions and storing those formulas in cells. In a similar way, this approach can be taken with a commission engine in a rules-based, data-driven system. Such a system can provide a certain set of specialized base functions that are driven from formulas. For example, one function can be designed to return first-generation, promoted-out leaders; another could calculate the monthly volume for those leaders and their team or group. You can define formulas using these base functions to calculate the quantities for a commission run—Teams, Team Volumes, Leaders at Different Generations, and so on. As formulas are evaluated, data is stored in the cells that represent the intermediate values calculated by the commission plan.

Core Difference:
• Data vs. Code
• Easier to make changes
• Easier to test

How is this different from a code-based system? Rather than having a lot of code and programming to implement a compensation plan, the data-driven system does its calculations utilizing the formulas and expressions entered as data. With tweaks to the formulas in the commission engine, new results can be run and analyzed to see the changes that will impact the business. This approach allows for plan revisions to be run, tested and deployed quickly with minimal errors.

Global Expansion on a Commission Core Plan
According to the Direct Selling Association, more than 80 percent of all member organizations have an international presence. Many are working to develop a global compensation plan where all distributors, regardless of their location, earn commission based on the same plan. However, many find that specific countries or markets need specific rules within their compensation plan to reflect local market conditions. Examples of this are that one country may have a car program or have qualifications that work in slightly different ways than another country or market in order to make the compensation plan competitive with other plans in that country.

Global Expansion:
Core and Market Specific Rules are kept separate.

For a global compensation plan built on a code-based system, changes are made by creating modifications within the implementation of the Base Compensation Plan, as shown in Figure A. Once changes are coded into the system, those changes affect the base plan, as they are not isolated from it—they are embedded within it. When the business later decides to revise the base plan, upgrading it with all the market-specific changes can be a laborious and error-prone process.

Imagine making changes to a base plan in a code-based system that has been implemented across 10 countries. It would be necessary to find the changes and check them across 10 countries to be sure nothing was broken in those countries. For several global direct selling companies, limitations with code-based systems have forced the companies to install and run one system for each different compensation plan, often for each market.

In a rules-based, data-driven system, global companies can benefit tremendously by using a single installation to support multiple, market specific commission plans. The system takes the Base Compensation Plan to be the core for all markets, and market-specific rules can be created for each market, as shown in Figure B. The base remains separate from the specific rules and values for a market, allowing a market to easily make its own adjustments independent of the core. This allows the company to effortlessly identify market-specific changes, run test scenarios to determine the potential effects of these changes, and easily roll out new markets and models.

For example, suppose a base compensation plan has six title levels and in this plan it is necessary to have two recruits at a certain level in order to be promoted to the next. The Japan market decides that, for this specific title, it will allow 400,000 yen in group volume and/or two new recruits to get to the next level. This market is able to make this change in its own layer of the compensation plan and then run tests to see where the impact of these changes will happen and how it will affect the business. The change for the Japan market is entered into the system as a market-specific rule, so that it does not affect the core compensation model and keeps the base plan as it should be—the core. Flexibility for Change A common scenario that we hear from many direct selling companies is that making a change to the compensation plan and system can be a long and arduous task. First, the business users get a concept of how they would like to change the commission plan and then they bounce those ideas off of distributors in the field. From there, the proposed changes go to a finance group that runs figures to see top line and bottom line impact—for instance, what these changes would do to company revenues and to the commission payout for the company. For example, the overall payout for commissions was previously 41 percent but now it will be 41.35 percent, which may fall outside the budgeted range.

However, the finance group may not be able to provide a detailed view on the consequence of this change. Would this change significantly reduce the take-home of a certain group of key distributors? Would this change cause significant demotions in the organization? Who would be receiving more? Who would be receiving less? In order to answer these questions, most companies go through one or more of the following: long manual processes to test results; a proposed change that has passed the initial test is coded and run on past or projected data; or simply faith and hope that these changes will work. A compensation plan change can cause a major change in the organization that will need to be evaluated in a careful manner; however the tools aren’t often there to do this in an organized and easy way or the coding takes too long or requires more effort than the company would like.

With a rule-based, data-driven system, gathering data on the impact of the change is much easier to do. It takes only a few days, rather than weeks or months, to develop and test the information needed because no coding has to occur. Instead, compensation plan changes are made in the cells of the plan definition, then tested, and finally a review of past commission periods is run to evaluate what would have happened with the field had these changes occurred. From there, the business can evaluate the changes, make tweaks, continue to test and decide on how to roll out a new plan.

Speed to Run— and What That Means
Several large direct selling companies on code-based systems take several days for a commission run each month, lasting anywhere from 18 hours to seven days. If a change is desired after a commission run, companies create manual processes for corrections or changes in order to finalize and post commissions in time to pay the field. With a rule based, data-driven system, commission runs are handled in a few hours, not days.

Volume and other adjustments can be made in minutes before a re-run, and data can be reviewed before posting. This gives business users more time to spend on review cycles, allows more iteration and adjustment management within the plan, and so reduces the need to invent complex manual processes for adjustments.

Speed to Run:
• Commission Runs in hours
• Ability to make changes and re-run

In conclusion, the structure that builds a compensation plan can support or inhibit change needed by direct selling businesses. A rule-based, data-driven system can support global expansion with a core plan, allow flexibility for changes and generate the monthly commission run faster. The result is a cleaner system that’s easier to track and manage and is beneficial for the field and the core business.

Ian Thomas is the Director of Product Architecture at QuinStreet, Inc. With more than four years of direct selling industry experience, Ian works with current clients, prospective clients and industry leaders to identify and develop leading-edge products for the industry. For more information, visit www.quinstreetdss.com.

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Innovations in Asian Logistics: SINGAPORE SHINES
by Charlie Smith

A New Asia
The explosive growth of the direct selling industry in Asia has been attributed to the outstanding success of many direct selling companies. While that growth has slowed somewhat in some mature markets, there are still many Asian countries that have yet gone largely untapped.

Robert Johnson, Chief Global Markets Officer for Unicity International, says, “In the maturing Asian markets, consumers have never been as educated, option-literate, savvy and demanding as they are now.” As a market matures, supply chain and logistics issues move more to the front of executive thinking as companies seek to create more cash to expand into new markets. Johnson adds, “One key to maintaining a competitive economic advantage by any company in these markets will be the extent to which they are able to achieve increasing effectiveness and efficiency by applying emerging best practices in the management of its order fulfillment process.”

Singapore has long been the easy choice for direct selling companies who wish to expand their business opportunities into Southeast Asia. With arguably the most business-friendly government in the world, English spoken fluently throughout the country, highly educated population and tremendous financial stability, one can understand why some of the largest multinational companies across the globe have made Singapore a key partner in their business operations.

For many companies in the direct selling industry, Singapore tends to be used as a jumping-off point to more populous countries in the region, such as Malaysia, Indonesia, Thailand and the Philippines. With a population 2 percent the size of Indonesia, Singapore may not offer the typical exponential growth curve in sales and recruiting that exist in other Asian markets. But the operational and logistical impact that Singapore can play in your company’s strategy for Asia can be absolutely stunning.

Will Halterman, President of Global Trade Services says, “Singapore is perfectly positioned from a geographic, infrastructure and technology standpoint to provide logistics services to the Asian region. In fact, the city state provides the perfect platform for market expansion throughout Asia and the Indian subcontinent, as well as servicing already established markets.”

Free Trade Agreements
Singapore has many free trade agreements with countries throughout the world and throughout Asia. In the direct selling world, some of these countries are mainstays in the industry. Japan, Australia, New Zealand, Indonesia, Korea, Malaysia, Thailand and the Philippines are well-established countries for many direct selling companies.

How could a free trade agreement between Singapore and a country like Japan work to the benefit of your company and your products? In Japan, for example, tariffs for dietary supplement and food/juice products range between 15 percent and 25 percent customs duties. If you were to add significant value to the manufacturing process of your product by making it in Singapore, either with your own equipment or that of a third-party manufacturer, your duties would be zero. The rules of origin vary from country to country, but Japan requires that there must be enough of a change to the product to warrant a change in the harmonized tariff code. While you probably couldn’t just package your products in Singapore and still meet the necessary requirements for zero tariffs in Japan, the rules are flexible enough to warrant your company looking into this type of strategic action.

You can see how using Singapore as a satellite manufacturing center for Asia can allow you to get your products into many countries without the prohibitive tariffs that can limit your world growth.

Flexible Labeling
As your company experiences growth, the amount of cash expended in building up your inventories in each country becomes enormous. For the direct selling industry, this is perhaps more true than almost any other industry that you can think of. The reason is that a backordered product directly affects your sales associate out in the field. It is quite disheartening to go through the difficult evangelical process with a potential recruit, selling them on the company and the product, only to have a backorder situation kill the momentum and excitement generated by the sales associate.

Direct selling companies usually either know this intuitively or learn the hard way very quickly. The consequence of the damage resulting from backorders causes companies to keep a rather large inventory of each item so that they don’t run out. This is complicated when you are working in many different countries with huge inventories in each. The cyclical nature of this industry means that it will never be able to go to a “Just-In-Time” philosophy with product delivery. In fact, there are many marketing guys out there who shudder at the thought that their operations people are getting “too efficient” to handle any spikes in demand and volume.

By using Singapore as a regional distribution center (RDC), your company has the potential to handle the spikes in volume to any Asian country by taking advantage of a flexible labeling technique called “bright labeling.” The way the process works is that you could keep a product such as glucosamine chondroitin, or possibly a health drink that would use the same exact formula in several different countries. The bottles of the product are filled, sealed and capped as usual, but there is no formal product label affixed during packaging; the only identifying mark is an ink-jet code printed somewhere on the bottle. When a market has a need for the product, a quick labeling production run of your bottles can be made very quickly with the appropriate labels for that country at the time of demand.

Let’s say that you use the same formula for Japan, Taiwan and Malaysia. Instead of keeping the industry average of four to six months of inventory in each market, you could keep one to two months of that product in each market because you can get re-supplied by your Singapore RDC quite quickly. The process is so fast and the delivery times by sea are so short from Singapore, that you can get your product delivered on a regular basis very cost effectively. If you had an unusual spike in Taiwan that caused an inventory shortage in that country, you could get your product labeled and air-freighted to Taiwan within 24 hours!

Charlie Kok, Vice President, South East Asia, Bax Global says, “We believe that bright labeling gives network marketing companies a tremendous advantage in managing their demands worldwide. You can trust Singapore’s highly efficient and productive workforce, excellent infrastructure and strategic location to get your products and supplies ready for each market on time, every time. In today’s highly competitive environment, good supply chain management practices such as achieving high inventory turns and optimum velocity would be the key to continual success.”

Taking Advantage of Ocean Freight
The more products that you are able to move by sea versus air, the cheaper your freight costs are going to be. You will typically spend 20 cents for ocean freight for every air dollar. Of course, you are trading time for money. To ship your products from the United States to re-supply your markets in Asia by sea can take anywhere from 15 to 30 days of transit time. The lack of proper planning, a glitch in manufacturing operations, or any other delay in your supply chain can force your company to use air freight extensively and expensively.

If you are able to use Singapore as a regional distribution center, your freight time by sea shrinks dramatically due to the fact that Singapore is the busiest seaport in the world with no Asian country being more than 10 days away. This can give your company a tremendous advantage in inventory control, and more importantly, free up that cash to be used for what you do best: selling!

Halterman says, “Without a doubt, regional distribution is the way of the future for the network marketing industry in Asia, Europe and other areas of the world. The potential cost savings, faster turnaround times and decreased localized inventory requirements make these centers invaluable.”

Meeting Your Needs
The direct selling industry has really matured in most markets throughout Asia. Now that your company understands how to sell in these countries, it is time for your logistics operations to align themselves properly with your international needs and capabilities. There is no country in the world that is more innovative in their approach to meeting the operational and logistical needs of the direct selling industry than Singapore.

Charlie Smith has been the COO of two large international network marketing companies. Smith is President of Operational Insights (www.opinsights.com), a global operational consulting group to
the direct selling industry.

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Training for Success
by Zig Ziglar

Training for Success
Good managers know that training is one of the first steps to creating happy and successful distributors. Network marketing and direct selling offers so many ways for an individual to change his or her life: increased self-esteem, a better mental attitude, financial security and the potential to build numerous and mutually beneficial relationships. However, without proper and ongoing training consultants are not only less likely to succeed, they have the ability to give an organization a bad reputation.

I’ve had owners and managers outside the direct selling industry ask me, “Why should I train my people and then lose them?” It’s frequently true that the better you train and develop your people in traditional business, the more likely you are to lose them because they often start their own companies. But that’s not the way it works in network marketing companies. The more effectively you train, develop and help people in your organization, the more likely they are to stay with you because they are already building their own business. Bottom line: The better you train and encourage your consultants, the more likely they are to stay with you.

Get Them to Use Your Products
You might call people who try to sell a product they don’t use themselves hypocrites. In network marketing, hypocrites stick out like spines on a porcupine. They might jab you once or twice, but by their example, they force people to run away from them. Consultants who don’t use the product they’re trying to sell find it nearly impossible to persuade people to do what they themselves are not willing to do. On the flip side, once consultants start using the products, or have at least tried them and understand how they work, they almost always sell more.

Educating consultants about your products and teaching them how to use those products will not only help them increase their credibility, and in turn your company’s credibility, it will help them sell more products.

Make a Clear Path
The promises of “no quotas” and “unlimited income” are often the hooks that bring a new consultant into a direct selling organization. The truth is that top performers, those who actually attain the income they desire, place quotas on themselves. It is critical, no matter what business you’re in, to make the standards of success clear. While there may be no quotas, having a standard that defines success helps consultants know what they want to achieve and why.

Lay out a clear path for your company’s career ladder; educate your consultants and give them accurate company averages to show them what they have to do to get to the income level or career level they desire. Nothing is more frustrating for consultants than to not know what they have to do to get to where they want to go.

Set a Training Schedule
Develop a training schedule for new consultants that begins the moment they purchase their starter kit. A new distributor’s first steps may include ordering business cards, making a list of prospective customers or attending corporate-sponsored and local training events as soon as possible. Having a schedule that encourages consultants to begin working before fear sets in is so important for their success.

Having meetings or conference calls on a consistent basis can help your consultants stay on track. Encouraging directors or management to hold weekly training meetings will benefit the directors (a teacher almost always learns more than the student), their team members, and the company as a whole. When consultants become better educated and more comfortable with their business, the entire company experiences growth in terms of both sales and new recruits.

Provide Motivational and Educational CDs
Top directors are almost always sponges. They’ve absorbed every bit of audio, video and online training their company has to offer. I often talk about “Automobile University” as the best place for people to get their education.
Since many consultants hold full-time jobs, their commute offers a prime time for education and inspiration.

Access to these materials should be included in your training program. Offering quality, professionally made CDs and DVDs is one of the best ways to educate your consultants and help them get and stay motivated.

Getting started with a direct selling company is easy—almost everyone can afford it. Conversely, it’s also easy to quit. Training your consultants and directors helps to ensure their success. Inspiring them with accounts of others’ success increases their belief in their own abilities and their commitment to their business. Training your consultants for success follows the truth that you can have everything in life you want if you will just help enough other people get what they want.

Zig Ziglar has spent more than 35 years delivering a powerful life improvement message and cultivating the energy of change all over the world, Ziglar has written 24 celebrated books on personal growth, leadership, sales, faith, family and success. For more information, visit www.ziglartraining.com.

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