| It is unlikely that MLM leaders will agree with my further statements, and they have valid reasons for that. The fact is that I focus on methods of operation that benefit the business owner. In an MLM network, it is advantageous for the business owner to create conditions for the continuous growth of the network, conditions for the career advancement of each participant, so that there are as many end consumers as possible. In an MLM network, the size of the network practically does not affect the fixed costs involved. Each seller or manager does not need an office. Network leaders rent spaces themselves or use regional distribution points as offices. However, this post is intended to help the business owner, where the growth of the sales network requires increasing the share of fixed costs. Therefore, those things that are so popular in MLM, such as “automatic” career advancement, “everlasting” commissions, rewards for “nurturing” new leaders, etc., are not welcomed in linear sales. Additionally, in linear sales, due to the presence of fixed costs, a clear division of roles in sales is promoted. If a businessman hires a manager, he expects that the manager will manage the sellers, rather than sell himself or encourage sellers to perform his functions, such as recruiting. Every farmer buys a harvester to harvest, a plow to plow, a grain loader to transport grain, and a combine to gather grain. Even if the combine has a grain tank, it does not mean that it is efficient to transport grain to the elevator using combines instead of grain loaders. The same goes for sales. A seller is, at the very least, incompetent, and at most, inexperienced and untrained in recruiting and training new sellers. Even if a seller brings someone to work, the manager will still be responsible for training and supervising that person. Of course, some material incentive for bringing in a new seller is possible, but it should be a one-time reward, and the newly brought seller should not be considered “belonging” to the old seller if, by chance, the old seller is promoted to a manager. Note the phrasing “promoted to a manager.” Unlike the MLM approach, career advancement is not automatic, based on formulas outlined in the marketing plan. The manager’s supervisor (hereafter referred to as “Director”) decides whether to promote a particular seller, and the best sales volumes are not necessarily a mandatory criterion for promotion. Very often, a good seller is not a good manager. Does the manager engage in sales? He can do so, but it is not worth incentivizing him additionally. If a seller receives 50% commission, and the manager receives 50% of the seller’s commission, then a sale made by the manager, who in this case is a seller in his own group, should not yield the manager 75% commission just because he is one step higher in the hierarchy. If we are talking about a business where the owner acts as the sales manager, then it is in the owner’s interest to expand and develop the business, rather than sell himself. This is a difficult but necessary decision for business growth—not to sell oneself. If the urge to sell is too strong, then sell, but “credit” the sale to one of the sellers, using the sale as field training. A manager who sells is no different in qualifications and the level of work performed from a seller. A manager should not have time for personal sales. It is much more effective to spend the time of personal sales on recruiting and training 2-3 new sellers and have more. Should a manager be rewarded for “nurturing” a new manager? Of course not. This is not his job, at the very least, and not within his qualifications. The most interesting thing is that a seller leaving the group happens not because of the manager, but in spite of him, and there are no reasons to reward the manager for this fact. The creation of new managers should be the responsibility of the Director. However, to avoid offending and demotivating a manager who has lost a decent seller from his group, the manager can be offered either a one-time compensation or a “seniority” option, where the new manager shares some of his earnings with the old one for a certain period, for example, a month. However, in any case, payment for one-time achievements should be one-time, while payment for ongoing work should be ongoing. The career advancement of sellers to the level of manager benefits the Director, not the manager. Just as it is not beneficial for a seller, for example, for one of his clients to become a seller himself, although it is beneficial for the manager. If we are talking about a business where the Director level does not yet exist, it is clear that each super-seller eventually becomes a “capable deputy” for the businessman, with expected consequences (if there are requests for me to elaborate on the topic of a “capable deputy,” please write your wishes in the comments about announcements). This is not beneficial. We cannot prevent this, but not taking advantage of the money that a growing seller brings is a crime. After all, he will grow and eventually separate anyway. The question is who he will work for during his growth. It is better if it is for us. To fulfill their functions in managing sellers, leaders at each level should monitor not just the level directly below them, but the level that is one step lower, in order to properly assess the quality and effectiveness of the work of their direct subordinates and make managerial interventions aimed at improving work efficiency. For example, we have a “star” seller. Based on the above, we can outline a sales management structure, as depicted in the image. |
