Each day women and men join all types of multi-level marketing companies. Depending on the company, somewhere between 40% to 80% will never buy another product or sponsor another person. We all have our private theories about why this happens. “Just trying to get my brother-in-law out of my basement.” “I didn’t want to hurt my friend’s feelings.” “I thought I could do it… but I hate selling.” This last reason may be the most disappointing to hear. Why does a person who likes a product or service, not want to share that with someone else? Not knowing how to share the product or opportunity keeps many distributors from opening their mouths. The three-way call is one method that the industry has used to capitalize on the credibility or relationship the new distributor has with a new circle of individuals, and the master distributor who has more knowledge about the product or opportunity. This article reviews how credibility can be transferred to another, more experienced and effective salesperson, specifically in the three-way call.
The way the three-way call works is that a distributor (Sally) invites someone she knows (Mabel) to try a product or to explore the possibility of becoming a distributor. Sally is inexperienced or less confident as a salesperson so she transfers her personal relationship with Mabel to a more experienced salesperson, Ruth. This personal relationship transfer has many dimensions and potential risks. Mabel purchasing product or joining of the company, however, will rely partially on Sally’s belief about Ruth’s credibility being passed from Sally to Mabel.
Credibility and trust are keys to any successful transaction (personal or professional). Credibility has three dimensions: emotional, rational, and relational. This means that a person is seen as credible based on emotional concepts such as liking, acceptance, admiration, respect, and appreciation (Johnson & Grayson, 2005). For example, if Mabel likes Sally, then Mabel is more likely to see Sally’s recommendations on movies, books, products as credible. The rational element includes concepts like, “is the salesperson accurate, fair, and trustworthy?” Again, if Mabel thinks that Sally is a fair person, then when Sally makes recommendations, Mabel sees her as more credible. The third element of credibility is the nature of the relationship between the consumer and the salesperson. Relational credibility includes the idea that the consumer and the salesperson have mutual trust, a good personal relationship, confidence in each other and high commitment to the relationship. This is similar to the ideas on emotional credibility; however, it takes the ideas a bit further. It is not just that I like Sally; I have a history with her that makes our interactions more predictable.
Recently, InfoTrax, Utah Valley University students, and I conducted a small pilot study to look at how people view the credibility of any salesperson. In the study, we asked 30 participants to respond to a credibility questionnaire on a salesperson for the last item they purchased. The same survey was given a second time and the participants were asked to think of a product purchase where a close friend or family member recommended the salesperson.
In direct sales, a salesperson needs to explain either the product uses or how the compensation plan works. If the product is easy to understand or the compensation plan is easy to follow, then a direct approach from the company or the person interested in the product will be sufficient. If I go in to buy a pair of shoes to match my new outfit, I do not need a salesperson to explain much. I can browse and make the decision based on my past experience. However, in many direct selling companies, the product and compensation plan require specialized explanation.
In our study, when comparing the two credibility scores for salesperson and recommended salesperson, the recommended salesperson’s emotional credibility was significantly higher. Essentially, the participant accepted, admired, respected, etc. the recommended salesperson more than the non-recommended salesperson. Their credibility is magnified. The study came up with no definite solution as to why the credibility was increased; however, the process of building a relationship certainly gets a jumpstart by having someone we trust recommend someone else.
For the rational part of credibility, participants found that the recommended salesperson was significantly higher on fairness of information, trustworthiness, and trust of the salesperson. When someone we know recommends a salesperson, we appear to trust that the person will be fair. If we have a relationship with someone, we are not likely to recommend a salesperson that is not trustworthy to others we know. That would put our own relationships at risk.
Perhaps the most interesting to me was the third area of credibility, which is relational. All of the elements in relational credibility were significantly higher for the recommended salesperson. What this says is that we feel more connected, trust more, and develop a relationship more quickly with a recommended salesperson. We build relationships one interaction at a time. Patterns get developed and are hard to break. What is interesting here is that we may pass a part of the old relationship to the new relationship. It may be that we work at this from the other angle and give the expert salesperson knowledge about our friend or family member that will help them make the sale. Either way, it is interesting to note that you make a difference when you recommend a salesperson to someone you have a good relationship with.
Can you pass credibility? Yes. Perhaps this finding is not at all surprising to those of you who have successfully used three-way calling. You have capitalized on passing credibility for years. However, it does raise some questions as well, like why do some people not recommend a product to their friends and family? Direct selling still seems to have some negative press (just like all industries). Some people may not be willing to risk relationships because of a negative perception of the industry. It may be that some people may not want to risk their credibility on a product when they need to use the credibility for other reasons like getting my brother to help me put in a rock wall. Some may not want to seem to be mixing business and family. The question for direct sellers is how to help your new recruits see that if they like a product or opportunity, it is good to pass their personal credibility along to someone who is better at selling.