The Best Franchise - Direct Selling

Written by Yuki Sano Thursday, 28 April 2011 05:09

In the Oscar award winning movie, The King's Speech, Geoffrey Rush has an attitude. I don't mean he's got a bad attitude. His character, based on real life Aussie speech therapist, Lionel Logue, in truth has just the opposite. It's what we affectionately label in the MLM industry- SWAGGER. In the film, when Lionel (Geoffrey Rush) first meets the wife of the stammering soon-to-be-King George VI, the future Queen Mother (Helena Bonham Carter) says 'my husband is required to speak publicly and has seen just about every therapist out there. And they couldn't cure him of this stutter'. To which he replies, 'Well, he hasn't seen ME.' She later calls upon him to come to their royal home to do the work. He replies, 'My office. My time. My rules'.

In the Oscar award winning movie, The King's Speech, Geoffrey Rush has an attitude. I don't mean he's got a bad attitude. His character, based on real life Aussie speech therapist, Lionel Logue, in truth has just the opposite. It's what we affectionately label in the MLM industry- SWAGGER. In the film, when Lionel (Geoffrey Rush) first meets the wife of the stammering soon-to-be-King George VI, the future Queen Mother (Helena Bonham Carter) says 'my husband is required to speak publicly and has seen just about every therapist out there. And they couldn't cure him of this stutter'. To which he replies, 'Well, he hasn't seen ME.' She later calls upon him to come to their royal home to do the work. He replies, 'My office. My time. My rules'.

Calculating the Allowable Using Your DM Budget This equation lets you calculate the amount of money you need in order to make one sale. This is really important to know! Revenue Selling Price: $1000 Minus Costs Production: $500 Overheads: $150 Postage & Handling: $50 The Breakeven allowance is $300 (the money you are allowed to spend to acquire a customer). NOTE: If your business requires 10% profit, then your allowable would effectively be reduced to $200. Using the Allowable to calculate your DM budget So using our allowable recruitment spend per customer x target No. of Sales = $200 x 100 Marketing Budget = $20,000

All the highly paid MLM leaders know they must stand strong or no one will follow. Check out some of these episodes and how they parallel what an MLM Leader might say. Helena Bonham Carter: Your methods are unorthodox and controversial. Geoffrey Rush: I can cure your husband but I need total trust Thomas Teammate: I don't care for your system. Can I use my own technique for inviting folks to a presentation? MLM Leader: NO. I can help you be profitable quickly. But you must have faith in the method as well as the success of the system.

Geoffrey Rush: What was your earliest memory? Colin Firth: I'm not here to discuss personal matters. Geoffrey Rush: So why ARE you here then? Pamela Prospect: My unemployed neighbor says I shouldn't cough up hard earned cash to join this thing. She says it's a rip-off. MLM Leader: Pam, you said you were interested in making an extra $1000 per month. Are you going to pay attention to your unemployed neighbor- or base your answer on the accomplishments of people doing exactly what YOU want to do? Why ARE you here then...what do you hope to do?

Another reason this is the best franchise is because there is potential to make an insane amount of money, right from the comfort of your home. That is not to say you won't be working hard, but you won't seem to mind because you are in control, not someone else.

Total Marketing Cost for 100 leads is therefore: $8,300 The Cost per Inquiry or Sale will vary depending on the response rate, which you won't know until you advertise. But the main focus on advertising is to achieve a required level of profitability in order to justify the expense. I like to refer to it as measuring the Profit Index. (This is exactly the same as using your allowable to calculate the number of sales you require in order to justify any marketing spend). Profit Index (%) = Total Marketing Cost / Total Revenue Profit Index (%) = 8,300 / 10,500 In this instance the Travel Insurance company requires 20% profit from print advertising. If my profit Index falls below 20%, then the advertising is deemed unprofitable. I'm so harsh! Hence, 21 travel insurance premiums need to be sold to meet a profit index of 21%. In other words, the allowable DM Budget would be set at $8,300 for advertising in the Local Newspaper.

Using Spreadsheets to Negotiate Spend If you've seen the spreadsheet then you'll wonder why I've highlighted the following cost fields - Ad Cost and Promotional Costs. Promotional Costs are harder to change in the short term, but negotiating advertising costs can be extremely effective. You'd be amazed to discover that by saving 10% of advertising you drive down your Profit Index, which means your advertising dollar doesn't have to work as hard to acquire customers or sales. In the example used, you would only have to sell 19 Travel Premiums in order to meet the minimum profitability requirements. It also does hurt asking for a trial advertising rate to test the viability of a product in a publication. Some account managers will assist if it means you become a regular advertiser. There are a couple of examples which the above calculations can be applied to in order to gain some further perspective for your next lead generation campaign.

Lead Generation Conversion Programs 1. Generally the more time you have to qualify an enquiry, the more it costs to generate. For example, if your telesales representative took 15 minutes to convert a prospect, while others may take only 5 minutes, then this will drive your overall costs to acquire a customer, and must be factored into your overheads or marketing costs. 2. Lead generation lists (Prospect Lists) can also support repeat conversion contacts, but you'll always get a reduced response rate with each effort. For example, if you mailed 1,000 prospects, it may generate 250 leads. The second time you mail the list (minus the 250 leads you generated the first time round), you might get another 100 leads. This means you have generated a total of 350 leads from the prospect list. But we wary that if you use the list too many times then it will get to the point of being unprofitable. As a general rule of thumb, you should change a portion of the DM piece the next time you mail (e.g. The offer, or a larger discount), as customers may respond to varying aspects of your direct marketing campaign, which is why it is always important to test. You may hear direct marketers talking about list building, and how much of their time is dedicated to developing a database of qualified prospects and customers. These lists are in fact a key ingredient which differentiate direct marketing from traditional marketing. But I will say that typically, a list of present customers will respond much better or at a higher rate to a new product compared to non-qualified, or "cold" prospects. It is also important to point out that while companies always depreciate their expenses over time such as equipment, machinery and inventory, they almost never capitalise what could be their most important asset, their customer. Therefore, small business owners should view their customers as investments and be able to measure and monitor customer data, and capitalise on it for the future.