5 Reasons People Leave Their Direct Sales or MLM Company

One of the things we do at ServiceQuest® is research, lots of research.

We find it is an essential aspect of our role in helping direct sales companies win. One of the challenges we often face is answering the question: why are distributors and customers leaving?

Instead of guessing their reasoning, we researched the answer by interviewing close to 500 former distributors of direct sales or MLM companies. We asked for honest answers and we’re grateful our contacts did not hold back.

The contacts were a mix of different companies, varying cultures, varieties of products, and unique compensation plans.

“Why did you leave?” we asked. That one question sparked a long answer and a wealth of insight for us to share with our clients.

Their answers have helped us guide our clients to higher retention, faster customer service resolutions, and most importantly, happy customers!

 

So, let’s explore the 5 answers we received from our research:

  1. Poor Communication

The words you say to your distributors and customers are the most important part of your relationship with them.

Poor communication may look like this:

  • Infrequency
  • Misrepresentation of products
  • Misrepresentation of earning opportunities
  • Confusing Messaging
  • Complicated Processes

More than 50% said that they felt they had been misled in either product explanations and promises, or earnings opportunities. They especially felt they were poorly communicated with about the support they could expect.

TIP: Take your communication practices as seriously as the products you provide. You can have the greatest products and compensation plan, but if your communication isn’t clear, you cannot earn the opportunity to sell.

  1. Unmet Expectations

Nearly all interviewees used the phrase “lack of results” when describing the decision to leave. The answer fell in one of two categories:

  • They didn’t see expected product results. Some even admitted they had let themselves dream of unrealistic product or income results.
  • Most said that they “worked hard” and saw no financial results.

A notable number said that deep down, they expected it to “not work”—almost a self-fulfilling prophecy of their failure. Negative expectations may have been corrected with caring, insightful training from the start (or not).

When asked if they felt they had given a 100% effort, less than 25% said “yes.” More than 50% admitted that they truly had not tried. Some expressed frustrations over bringing people into the business who did nothing more than sign up as asked.

50% of the respondents tied a lack of results to their lack of consistency. Yet, it begs the question from your corporate team: how do you set proper expectations?

  1. Lack of Support and Training.

An astounding 60% of respondents stated they never received the support they should have received. Notice the word, “should” here. The perspective of the distributor is what truly matters most. New distributors believe they should have the support of the company and their team leader.

Even more surprising, 30% of respondents didn’t hear from their upline or team lead once they signed up. I’m confident the team leader didn’t intentionally miss a new team member. Instead, the systems simply are not in place to support the efforts of the upline.

Additional insight provided:

  • 40% said that they never did a 3-way call with their upline, and more than 50% said that they never set up a call or requested help.
  • 70% said that they felt that they should have received more hands-on guidance at the very beginning, being trained on a personal basis.
  • 90% said that the lack of support was one of the key factors in leaving.
  • All said that lack of leadership was a significant reason, as well.

Keep in mind most distributors are women who are making additional income for their families. It’s our role to make sure they have the support and training that makes it simple for them to reach out to their team and give them the support they need when they need it.

A Learning Management System (LMS) and a robust CRM for the distributor can put the right tools in their hands so the distributor has clear next steps with everyone on their team.

  1. Lack of Belief.

Lack of belief is a direct reflection of the quality of the results from the products you offer. If your product isn’t producing results for people, they will leave as quickly as they came.

People have a natural tendency to believe. They want to follow leaders with vision and integrity. Yet, belief is fueled by competence, nurturing, information, communication, support—all in an environment of integrity and care.

We commonly heard respondents use phrases like:

  • “I just stopped believing.”
  • “I lost the belief in what I was doing.”
  • “I quit believing the promises that were not kept.”

Leaders build and reinforce belief. Belief-building is at the core of the company-sponsored training and support—it’s your most valuable job.

The deep work of belief-building begins with you—the corporate leaders. What is your OWN belief system? Why are you growing this company? What are you offering people? Confront these, write them down, get on solid ground.

  1. Life Changes.

“Things in life suddenly changed, and I had to back off my networking.”

Only 15% of our respondents used this as their reason for leaving. Many had reasons, but some seemed to simply use a generic “life happened” as an excuse to get out.

So, this leaves us to ask about timing and environment.

Our internal belief system is based on the people we surround ourselves with and their thoughts and opinions drive what we prioritize.

The nature of a direct sales company is the ability to build connections and nurture customers from wherever you are. A move, job change, pregnancy, etc., shouldn’t affect their ability to make additional income if the systems are in place.

So, the question then becomes one of their priorities.

What priorities are they currently committed to and which would need to change in order to grow their income through direct sales. This reason may simply be a “this isn’t the right priority for me.” That needs to be accepted and celebrated by you. When you have distributors who join the company because they want to prioritize it, it breeds success and an environment of enthusiasm for everyone!

Next Steps to Keep Happy Distributors

Take a deep look at your opportunities to improve, then build a company and culture that give more reasons for staying with you. True leadership is creating a culture that attracts the right distributors and customers.

Start at the top of the list and ask yourself:

  1. Do we have the right communication framework in place? How can we be better at communicating? Once you can answer “yes” with confidence, you’ve earned the right to move to the next question.
  2. Are the expectations I’m sharing clear and accurate? This is your chance to make sure you are giving people a clear path to follow that will lead to success.
  3. Do you have the proper Learning Management System (LMS) and Customer Relationship Management (CRM) in place? This is a crucial part of your company and distributor success. Don’t overlook the importance of this support.
  4. Are you a belief-builder? Do the products solve a problem for your customers? What proof do you have?
  5. How can you make the process of selling your product easy for distributors to say “yes” and make room in their life for the extra income? Is your current marketing attracting the right distributors and customers?

If you get stuck through the process, reach out to me. For over 30 years I’ve spent my career answering the question: “how do I make our customers happy?” I’ll guide you through a process to help you identify why people are leaving your company and how we can improve your experience so they want to stay!