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Mass Recruiting vs. Personal Touch Recruiting

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Mass recruiting vs. personal touch recruiting is probably the most important issue facing companies in the MLM industry today. Why? Because when a network marketing company decides on a commission plan, that plan endorses a method of recruiting. It is important for distributors to be aware of this issue because they are directly affected by it.

Today, network marketing many commission plans basically require mass recruiting because distributors cannot make enough money doing personal touch recruiting to make their distributorship economically viable. Mass recruiting vehicles include newspaper ads, flyers, business leads, bulk email, business websites, ebay, pay per click search engines, DVDs, web meetings, video conferences, etc.

When I talk about the Mass Recruiting Business Model, I am talking about the entire MLM customer lifecycle—from the time the customer is initially found, throughout his/her relationship with the company as an active customer. With this Model, a distributor is primarily responsible for acquiring the customer. Servicing the customer each and every month is a duty that is shared between the distributor and the company.

With the Personal Touch Model, the distributor is primarily responsible for both acquiring and servicing the customer. With personal touch, recruiting or selling is solely done in a person-to-person manner.

Why is this an issue you need to be concerned about? Many commission plans today are not designed to pay a significant amount of money to the distributor who brings on a customer!

Companies that fit into this category are ones where:

  • Anyone can become a distributor for less than $20.00.
  • First and second level commissions are 5% or less.

If you do the calculation for this type commission plan, you find that you will make less than $5 a month on a customer if he/she continues to purchase $100 a month in product. So, how much time can you spend on that one customer and still make money? Be sure to take into account the time you will spend with potential customers that do not buy any product.

This brings us to the Flipping Burgers Rule: if distributors divide the money they earn by the time it takes them to find and service customers, and it is less than they can make flipping burgers, they are going to quit. This rule explains why when a company designs a commission plan, it must consider what type of recruiting it is actually rewarding.

Mass recruiting typically pays lower commissions. You recruit more and make a lower amount on volumes of people. Mass recruiting becomes appealing to distributors when the way to make money is to get as many people in as possible. If you find and sign up your customers and then share the responsibility with the company of making sure they stay active month to month, then the small percentage earned is not a problem.

Because the Internet and electronic business tools have made mass marketing cheaper and easier, more companies are betting their corporate lives on the notion that mass recruiting will work. They also are betting the financial lives of the distributors who join them. My question for companies is, “If mass marketing will work with your product, then why do you use the direct selling channel?”

I propose that person-to-person recruiting is what has always worked in direct selling. Many of the ways to keep in contact are simple and low cost such as postcards, newsletters, phone calls, product samples, and parties to share product and experiences. In this light, the key question for network marketing companies still remains, “Does your compensation plan reward person to person recruiting?”

The bottom line is this is not an “either-or” proposition! You’re not limited to a choice of one or the other. Generally speaking, a network marketing commission plan should include a combination of mass and personal touch recruiting customized to best carry out the mission of the company and its distributors.

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