It is projected that by 2023, more than half of the domestic labor force in the United States will either be involved in some type of gig work or have worked independently at some point in their career.
In this growing gig economy, the desire for flexibility and freedom is on the rise, putting representatives, distributors and gig workers in a position to be choosy. Several factors motivate the human capital essential for direct selling businesses to thrive.
Most studies seem to draw the same conclusions—the feeling of making a difference and contributing, coupled with recognition of achievement, results in a winning emotional combination that highly motivates individuals to continually sell successfully. What other factors could be contributing?
We took a deeper dive to understand why some direct selling companies are successful with sales and distributor retention, and others appear to lag behind. The common denominator ended up being something painfully obvious and unexpected: payout frequency.
When distributors feel that an organization has their best interests as a priority—trust forms, and their relationship with the organization feels more personal. Because of this, they perform with purpose.
Millennials Desire Instant Gratification
When companies adopted a shorter time frame from point of sale to payout, they yielded greater distributor retention. Why? Millennials have a different mindset than previous generations. They crave immediacy and instant gratification, which translates to getting paid and rewarded easily and quickly. With millennials taking over the workforce, direct selling businesses must move at their speed, which is why instant payments are a top 2020 trend. The shorter the time to payout, the more instant the gratification. Pair that with a wide range of spending capabilities through mobile wallets and debit cards, and distributors will want to stick by you and your brand for the long haul.
There’s nothing more attractive to a potential distributor than an attentive organization who wants to take care of their field sales force. When distributors feel that an organization has their best interests as a priority—trust forms, and their relationship with the organization feels more personal. Because of this, they perform with purpose.
Payment Cycle vs Needs Cycle
To put it in perspective, let’s say a distributor for a direct sales company makes a huge product sale on the fourth of the month, but commissions are only paid monthly on the first of the month. The distributor will have to wait almost a month to receive and access her payout. A lot can happen in a month, like unexpected expenses or more product orders. This can leave the distributor frustrated and wishing that she had access to her earned commissions sooner. As the month goes by with no instant rewards or incentives, the distributor decides to look for another source of income and stop selling for the company altogether because the payment cycle wasn’t aligning with her needs and bill cycle. Not only do you lose a distributor and the investment of time and resources on education and training, but you have lost a future producer, team lead, influencer and motivator.
Paying commissions monthly—or even weekly—could leave your distributors unmotivated and more likely to search for a more attentive organization to join.
If that same company had invested in a solution that paid out in real-time, this distributor would have received a payment notification within minutes of making a sale and have immediate access to her funds. This instant gratification leads to excitement and an eagerness to plan the next big sale. And there you have it—the feeling of accomplishment, reward and recognition, wrapped up into a single instant payment notification keeping the daily motivation factor at its max.
Evolving Fintech Trends
With the rapidly changing fintech trends seen today, the most successful direct sales companies have evolved from the traditional ACH payments to robust solutions that offer instant payouts. Successful companies are recognizing that freelance workers will no longer settle for waiting weeks for a check to arrive in the mail, or days for funds to arrive in their account. These top companies have shifted from paying their representatives on a monthly or weekly schedule and have increased payout frequencies to daily and even hourly, promptly after a sale is made.
Each instant payment notification keeps distributors excited about selling, being paid, and being able to spend right away. Taking care of your field isn’t just about giving recognition anymore. It’s about having the most efficient systems in place to make their road to success easy to navigate and rewarding—instantly.
Choosing a Payout Provider
To compete in today’s growing gig economy, direct selling organizations need to pay their distributors faster. Partnering with the right payout provider is a key decision that can accelerate your direct selling business by increasing participation, retention and loyalty.
When choosing a payout platform, make sure it offers services that can scale with your business to pay distributors in-country or cross-border, as frequently as you want, in real-time and with no hassles. An easy API integration will allow you to process payouts more frequently and within seconds.
Taking care of your field isn’t just about giving recognition anymore. It’s about having the most efficient systems in place to make their road to success easy to navigate and rewarding—instantly.
Continually build and promote your brand with a solution that offers your branding and logos on instant spend debit cards and user interfaces, while providing spend-back capabilities for the easy purchase of more product. Make sure your funds and your distributors’ funds and information are on a platform that is safe, secure and meets a high standard of compliance. But most importantly, make sure your payout provider is as attentive to you and your payees as you are to your sales force.
Crystal Holtzendorff is the Director of Sales Operations at PayQuicker, a global payout provider that offers instant payment solutions for direct sales companies of all sizes.