You need MLM software for commissions calculation, business processes, warehouse management, and much more. What do you need to automate right away? What can wait? David Judd, Principal Product Owner at InfoTrax Systems, joins Kenny to continue the conversation about integrated software solutions for direct sellers. Are you a startup company or is your company transitioning from one software provider to another? David has excellent insights about common needs and best practices for getting the most out of the software you buy.
Kenny: Hello and welcome to the MLM.com Podcast. I’m your host Kenny Rawlins and in today’s episode we’re joined by David Judd. David, thanks for joining us.
David: You’re welcome. Glad to be here.
Kenny: Okay. So, I know we work together, but I never know Titles. Tell me, what’s your Title these days?
David: Oh, it changes but I think my current Title is Principle Product Owner.
Kenny: David works with me here at InfoTrax and he is the principal product owner and David’s got a lot of experience in the MLM industry. David, why don’t you go ahead and tell our listeners a little bit about yourself and what you’ve done in the industry?
David: I started in the industry about 15 years ago working for a direct sales party plan company that did scrapbooking supplies. It was a great introduction to how MLM and network marketing works. During my time there, that company converted to using InfoTrax’s software and so it became kind of a natural fit for me to eventually join the InfoTrax team where I’ve been for a number of years now. Most of my experience at InfoTrax is working with clients who are starting up or who are in business and looking for a change. They want to change their software. And so, we’ve done—myself and teams I’ve worked with—have done a lot of the implementations. So, we’ve seen how companies switch software and what’s important to these companies both as they’re starting up and as they’re looking for different needs in software.
Kenny: Yeah and it’s that experience that we wanted to bring you on for because we kind of want to feed off of our last episode where we had Sean Smith on and we talked a little bit about integrations and different paths for companies to take. And you have a lot of experience working with those things and working with integrations. And I wanted to first start from the startup mentality. So, you’ve done a lot of work with startups. And in today’s world what should a startup be thinking about from an integration standpoint?
David: The reality is that there isn’t software out there that you can just buy that doesn’t have integrations in it. Integrations are just part of the world we live in. And some of the base level integrations a startup should be thinking about are of course credit card interfaces. Right? That’s an integration. A lot of companies want to integrate with a sales tax provider, at least in certain countries that standardize that type of information. You can work with a provider to make sure that your sales tax is all calculated and all of the rules and the legislation around sales tax is managed by an another vendor who provides that [information] to your software. For your fulfillment you may be interfacing with a third-party logistics provider or a warehouse management system. You, as a start-up, may not be taking on all the fulfillment activities of your [company]. You may be outsourcing that. And the last one would probably be commission disbursement where you may want to be dispersing either to like a direct deposit to a bank or even many of the great [digital wallet] solutions that are out there right now that makes it all electronic and provides some good flexibility there. So, those are the common ones you see with new companies coming out of the gate.
These new companies starting up, they know that they have to sell, they have to get out in the marketplace, and they’re gonna find a few strategic partners in those areas that I mentioned to make sure they handle the stuff so they won’t have to worry about it. They can worry about what they need to do to get their business out in the market, prove their concept, and really start building something of a growing field or company or whatever.
Kenny: The thing that stands out to me about most, if not all, of those integrations is they’re pretty passive integrations. Sales tax—you’re not gonna have a CSR going in and managing your sales tax integration. Whatever back-end [you’re using] hits it, gets the sales tax for the particular address you’re at, returns it. Same with credit cards and things like that. I think that’s one of the things that people don’t realize. A lot of times you don’t even think of those as integrations just because once you get them set up, they’re passively done. The things that can be more complicated and the place that I’ve seen people make a mistake [in] starting up too early, is having too many active integrations. You’ve got a single person jumping into two or three different systems. And that can obviously cause some frustrations.
David: Yeah. In the startup world you’ve got a small staff of people who wear a lot of hats and if you’re asking that staff to jump into different systems, different user interfaces, that just adds overhead to the processes that they have to go through. Phone calls with distributors and customers can take a little longer because [the CSRs] have to move from system to system. And it’s certainly frustrating for that user. In addition to all that, it can also increase the risk of mistakes made by that particular CSR or whoever the person may be. Because they are fulfilling multiple roles, the passive integrations work real nice.
So, when you’re looking for software you definitely want a software provider that can keep a good UI for multiple roles. You may have CSRs and some admins and some logistics and some accounting and [with a good UI] at least there’s some aspect that the people that wear the multiple hats can live within a UI ideally and then bring in those passive integrations like you mentioned. Yeah, I may have to go in there, as a finance person, for the company occasionally (into my credit card or my tax [software] or whatever) but for the most part the different roles, because they’re filled by one person, keep that user experience as simple as possible. It will save you heartache, it will save you time, and allow your people to get really good at doing their job.
Kenny: Okay then as you grow, you’re naturally going to bring on some experts, and they’re gonna want more sophisticated tools and you’re gonna need more sophisticated tools because you’ve got a larger business to manage. You and I talked about this a little bit leading up to this recording. You’re gonna go from a few people wearing a lot of hats, like you talked about, to a lot of people wearing probably just one hat and that’s when you’re gonna get financial people saying, “hey let’s go partner with a better ERP” and things like that. What are some things that people should consider at that point?
David: At that point it’s about [getting the] best-of-breed. It’s about looking for the needs of your business and saying “who does this part really really well?” and—just to kind of talk about the InfoTrax side for a minute, maybe tout InfoTrax a little bit—that’s one of our approaches. We have a solution that can be scalable for these different needs. And we know that we do certain things well and we know that we don’t do certain things well. So, we like to have our clients bring on good partners that do the things that we’re not good at and integrate. And so, when you’re looking at that, you’re looking at “what are these partners or potential partners best at doing?” because you’re right, as you grow you start to build an organization that has departments and roles start to become filled by one person. And then you have a warehouse group or department and they may have a specific type of need out in the warehouse to keep raw materials flowing in, to track finished goods, to then putting that on a pick line, fulfilling orders and auto ships and all that kind of stuff. They may need a specific warehouse management solution and you may need to integrate with it. Accounting, if you want to get into combining accounting and logistics and everything and you want to go out and get a large ERP system, yeah there’s some good ones out there and your MLM system that’s good at the MLM stuff will need to be able to integrate into those other pieces. So, when you’re looking for MLM software, certainly consider—and Sean kind of mentioned this a little bit in his interview—that you’re looking to ask, what’s the growth strategy for the partner you pick for your MLM solution? Are they able to bring on these other integrations for things that are not necessarily MLM-specific things like an ERP, warehouse management, [digital wallet], that kind of stuff. And make sure they’re really good at the MLM stuff. You can quickly bring those in and look at what are the MLM providers good at and what are the areas of my business that other people are experts in that aren’t necessarily MLM-specific. Find those people and integrate with them.
Kenny: Right. And like you say, there are certain things that… Software will get you to a certain point and then you’re gonna outgrow it or at least certain elements of it—accounting or fulfillment—and then you want to get specialty software for that. But likewise, I don’t know how often we see this but I’ve seen a couple people try to come out the gate too complicated. You’re shipping 10–15 orders a day and you’ve got this complicated integration that’s a pain to manage.
Kenny: And you could more easily just do it manually because you’ve got a few people and you’ve got these weird business processes that you’re trying to fulfill that are built more for a large-scale business.
Kenny: So, when you’re working with startups, I know you spend a lot of time talking to them about business processes before they even start setting up their first item codes in their software. What are some tips that you give them in planning for growth and in not getting ahead of themselves in that?
David: A big the tip we give is: do it manually for a period of time. And there’s a couple reasons for that. One, understanding the process before you automate it helps you better automate it. If you come out of the gate and you automate all these processes in your software—which most software providers will let you do—and you don’t understand the underlying process, operationally that can be a challenge for you. You may not understand what exactly is going on and the effects of that automation may actually lead to things happening that you didn’t expect and therefore cause uncertainty, confusion, and sometimes legitimate problems. And so that is one of the big reasons why we say do some of these processes manually. The other reason is because you don’t know as a start-up what your business is going to do ultimately. And we feel, at least it’s been my approach and the approach of InfoTrax to say, your first goal as a software provider is to get out there and prove your idea in the marketplace. Spend your time focused on that and don’t worry so much about customizing the software. We’ve seen way too many clients customize integrations that they ended up turning off six months, twelve months later because they grew past that idea that they had at the beginning. It was no longer relevant. The reason why they did in the beginning was a guess. “I think we’re gonna need this.” So, putting in some of those manual processes, instead of integrating for example, is always very helpful because then you understand what you really need over time and then you go out and find your solution.
Kenny: Yeah and one of the things that’s interesting about this industry is your salesforce kinda takes on not a life of its own but kind of a behavior pattern of its own. And that’s where you can get into a point where, yeah, you may have guessed “well if I were out there selling, I would do it in this way,” and you build all these web tools and stuff around it and then you get a bunch of people out there and they’re actually doing it in a different way. [You want] to not paint yourself into a corner and say “well we were planning on this.” You want to be—especially as a startup—able to adapt pretty quickly. [You want to be able to] say “Hey our product took off in this certain segment that we weren’t counting on. How do we build tools to support them?”
Kenny: Because the biggest “integrations” that you could do are gonna be your sales and marketing tools and your distributor back office. That may be something that you end up taking in-house, that may be something you customize with your startup provider, and they’re able to grow with you. That may be something that you go partner with some other sales tool. I love what you’re talking about in the sense that you want to give your business a chance to grow in the way it’s going to grow and then adapt to it without pre-baking everything and saying, “hey we’re gonna do all of these things this certain way” without knowing what it’s like. It’d be like a newly married couple designing their dream home in year one of their marriage. They don’t know yet how many kids they’re gonna have. They don’t know what…
David: …tastes and preferences that they have combined together.
Kenny: Yeah. You gotta kind of learn and grow and you don’t want to force yourself in to such a complex and convoluted process that you can’t then adapt to.
David: And you bring up a good point because there are aspects—and usually the operational aspects are ones—that are pretty tried-and-true. There’s some real standard operating procedures. So, when it comes to any integration that helps you operationally do the fundamentals of taking orders, shipping orders, paying commissions, that’s great because they’re standard.
Kenny: That’s where you’re talking about credit cards, sales tax…
David: Yeah, exactly. Those things we lead off with for startups. But then there’s the distributor-facing or the distributor-viewable interfaces that’s when you maybe aren’t sure or don’t know yet. We’ve seen a lot of people who come from a larger MLM company. They break off and they get a couple of people together and they start an MLM. And they come with this mentality of “big company” and they want to have all the tools and they want to have all the integration of a big company because that’s what they’re used to and they’re used to living in that world. And they over-build a software system for their now new startup company. most the time that money they’ve put into that, a good portion of it ends up going to waste because this company they’re building should be different than the company that [they] came from. That’s the reason they went that way, to build something different and new.
Kenny: And that’s where you got to find that correct balance because the thing that you do want to be thinking about is what happens when I grow? But not boxing yourself in before you’ve grown. Right?
Kenny: You do want to say “okay is this software provider that I’m partnering with going to allow me to integrate with an ERP? Are they going to allow me to take over the development of my front-end? Is there a core piece of what they’re doing that I’m gonna stay with no matter what? And that’s part of the reason why I’m doing business with them.” At InfoTrax, we tell people that it’s our commission engine. And you see people break off different layers and they’re able to integrate with us and grow with us but I do think that it’s kind of a fine line to walk of being prepared for when you do grow but not automating things, integrating to things, and building complex processes before they’re warranted.
David: Exactly and that’s why I love that essence of Sean’s statement of the question you should be asking your MLM software provider is “what’s your growth strategy? As we change, as we move through the phases of growth for an MLM company, what’s your strategy?” That should be the question that people are asking and that whatever strategy they’re given by the software provider they’re looking into fits with their thoughts as far as how [they] intend to grow over time. Don’t build up too much too soon and ask your provider “What’s your growth strategy?”
Kenny: I appreciate that and I wanna take one other angle with you. So, let’s say that you’re working in an MLM right now and you’re like “Hey we’re in a bad situation and we need to start looking at maybe changing some things.” When people go to change software providers or to add new integrations, what are some of the mistakes or pitfalls that they make that you would caution them to avoid?
David: Picking the right providers is the biggest one. You know.
David: For example, if I’m with an MLM software company and I really like them and I really trust them, I should probably look for [their] recommendations of who they would say to integrate with. If I don’t like the MLM [software] provider, then yeah, I’ve got to go out and shop and find a new one.
David: And then I would ask those questions. What’s your growth strategy? What’s your integration strategy? We like these things and these things about what we’re currently integrated with. How does that fit with you guys?” That’s the biggest one—picking the right partners, picking people that have a proven track record that integrate well. You can’t overstate that fact that integrations can be very tricky and not everybody does them very well. Oftentimes it’s integrations with other partners that ends up really costing companies a lot of money. And when they don’t go well, loses distributor confidence. So, it is important you find someone that has a proven track record with integrations and that what they’re providing is solid.
Kenny: Yeah, the other thing I’d add to that is as you’re meeting with other people don’t be afraid to revisit your own processes.
Kenny: If you’re meeting with someone that has a track record and can bring some expertise in to maybe some of how processes should look. Definitely don’t throw the baby out with the bathwater. If there are things that you’re doing and you know why you’re doing them and they’re effective okay great. But if you’re doing them “just because that’s the way we’ve always done them” or because “that’s the way our old partner recommended them” I would say that’s one of the things you’ve got to be willing to look at. Don’t recreate a poorly designed process with a new provider.
David: Yeah. When it comes to changing software providers that is one of the hardest things to do and it’s one of the biggest things that, as we go in that situation, we try to help people understand. You’re changing software for a reason. This should be the time to do exactly what you said. “What is it that’s core to what we need?” versus “What did we build just because we thought we needed it and we [actually] didn’t?” or “We’ve gotten used to something that may not be the best as we move forward.” Being able to take a look at that from business processes to integrations to tools that we’ve provided in the past. All of those things should be under review and make sure that you have them because it legitimately provides value to your business, to your field, to the end goal that you guys have. And then look for the software provider or the integration partner that meets that need.
Kenny: Yeah you know a funny story about that is I was one time working with someone who was converting off their old software platform and they said “Is there something we can do to indicate that certain people ought to have their checks printed at the end of the check printing.” And we said “Okay sure.” We kind of walked them through it. And we said “Well why do you want those checks printed at the end?” They’re like “Well they’re people who haven’t submitted proper documentation and so we’re actually not going to mail those, we’re actually just going to shred them and their earnings are on hold because they’re out of compliance.” And so we said “Well wouldn’t it be better if we just created a report of those people and now you know their earnings and they’re on hold and we don’t even print the check.” They were like “Oh great yeah that sounds good. We just thought that… you know we came up with this plan and this is just what we’ve always done.”
Kenny: And so, a lot of times it’s a good opportunity to take a step back and say “What is our objective?” versus “What’s the process we follow to accomplish that objective?” Because the objective was fine. There was a business need and we needed to account for it in their conversion, but how much of a pain is that? I mean they were printing thousands of checks that they were just shredding. I mean this was a large company. Thousands over the course of a year and you’re just shredding them.
David: Yeah, it’s wasted.
Kenny: And so, it is a good time to say “Okay what is a better process that we could follow?”
David: And it is really interesting because when you look at that situation it’s hard to determine what those changes are sometimes, but the best thing you could do, again going back to let’s look at when we pick software companies or integration partners, don’t be afraid to ask to speak to their project team and talk to them about their approach to these types of things. Don’t be afraid to talk to their subject matter experts or whatever. Ask to see if you can do that, see if those people are gonna follow that very thing. Are you just gonna rebuild what I’ve already built because I asked you to? Or are you gonna actually be my partner and help me think through the things I really need to bring over?
David: Because when people come over to the InfoTrax software, we try to leverage the strengths of the InfoTrax software, and then look at how they did business before. We have a whole onboarding team that does that very thing. They say “How do you do business over here? What’s your process? We need to adopt you over here. We don’t want to rebuild that. We want to adopt you over here because this is the way that this software system does it and this is why. It’s for these reasons.” And then you find the gaps of what you must have and you can then make a decision whether you want to build [software to] those gaps or whether they’re just unnecessary.
Kenny: Yeah. And it’s true of a lot of things. That’s true of what we do at InfoTrax and you want to leverage that experience but you want to do that everywhere. I was with a client that started working with a new fraud monitoring tool and the people that were working with them were great about, with all the requests, saying “Well why is it that you’re doing that?” And then out of that came a lot of enlightenment on better ways to fight fraud.
Kenny: Which you would expect because these people do it for a living and that’s part of the reason why you’re partnering with them.
Kenny: But if you’re just partnering with someone who’s gonna let you go a long way down the wrong path, those are the types of partners that you can’t really afford to do business with. So, David I appreciate your time. I think we’ll end it right there. It’s been good picking your brain. I think this is something that whether our listeners are thinking about starting up a new MLM or working somewhere where things just aren’t clicking, this is something that people need to be thinking about.
David: I appreciate you having me.
Kenny: Yeah and we look forward to having you again soon!
David: All right thank you.
Kenny: That concludes this episode of the MLM.com Podcast and before I get to our regular closing, I’d like to ask a special favor and have our listeners go and rate us wherever you listen to the podcast. These ratings help us find other listeners and know what we can do better. As always, I’m your host Kenny Rawlins and I want to give a special thanks to David Judd for joining us today. His expertise and insight was very much appreciated. I also want to thank Jana Bangerter and Adam Holdaway for production support. I hope you’ll join us next time.