On Developing True Business Leaders
The main thrust of Splash Direct Sales is to develop and promote new recruits or dealers to Independent Sales Managers (ISM). This is one way of giving a good sales opportunity to potential direct sellers. The ISM "package" is very attractive: a maximum of 14% rebates on the book sales of Independent Sales Supervisors (ISS). But how to develop ISMs to become true pillars of Splash Direct Sales network nationwide?
Develop True Business Leaders Through the Application of the 80-20 Rule
We can develop ISMs to become true pillars of Splash Direct Sales by the full application of the 80-20 Rule, known also as the Pareto Principle. Wikipedia says that
"The Pareto principle (also known as the 80–20 rule, the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes. Business-management consultant Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who observed in 1906 that 80% of the land in Italy was owned by 20% of the population; Pareto developed the principle by observing that 20% of the pea pods in his garden contained 80% of the peas. It is a common rule of thumb in business; e.g., '80% of your sales come from 20% of your clients'".
80-20 rule simply means that 80% of the total Splash Direct Sales production comes from the magic 20% of all ISMs. For a national production of 1M for example with 100 ISMs producing it, 20 ISMs produced the 800,000 sales, and 80 ISMs produced the remaining 200,000 to make the total 1M production. The focus therefore is on the 20 ISMs, which we like to call as the sales pillars of the company. The more sales pillars, the more successful Splash Direct Sales becomes. That's the logic of it all. Develop and focus on the true business leaders or sales pillars of the network.
The Negative Effects of Mass Promotion to Manager Level
Mass promotion is good, for we can gather many true sales pillars only if we have many candidates to choose from. But there's a negative effect also to mass promotion, which is the violation to the reward-performance principle. What is it? It means that since it is so easy to get to the top in Splash Direct Sales marketing plan, the so-called highest rank will lose its aspirational element or attractiveness. The essence of reward performance is lost; the I-aspire-to-be-Splash-ISM dream ceases to be exciting.
The Sad Experience of One Popular Direct Sales Company
Violating the 80-20 rule, one very popular direct selling company (let's not mention its name for obvious reasons) is rumored to close business. The fact, according to expert opinions over the Web, was that the new top executives of this company were cash-business gurus. The 80-20 principle wasn't applied. Instead, the company embarks on mass promotion, without respect to the concept of developing the extremely vital sales pillars (the Pareto Principle) in the sales organization. Mass promotion in a credit extension business will always result in bad collection efficiency rating, for only 20% of the entire network (not everybody!) will be considered as the real business partners of the company. Whereas, the 80% will normally be (yes, goes our experience), the source of soured receivables.
The Splash ISMs' Temptation to Become a Just-recruit-type of Sales Manager
Splash Direct Sales is a traditional direct selling company as argued somewhere in this site. Hence, the just-recruit-type ISM is not sustainable. In traditional direct sales you need to support your downlines with products, if the company won't give them a handsome credit line for policy or procedural reasons.
How to Develop True Business Leaders Among Splash Direct Sales' ISMs?
Well, easy. Teach them the three-fold goal of a traditional direct seller, namely, Sales, Collection, and Recruitment. By sales, one needs to have an inventory or to engage in product distribution. If you are a recruit-only type, then go on with it, but it is not sustainable unless you'll get yourself engaged in employing the so-called "surety" method as allowed by Splash. Outside of this parameter you'll become a pure networker-type of an ISM. As such, I doubt if you can continue on as a sales pillar of the company. For a purely company-should-release-the-products strategy to all dealers from Splash Dealers up to ISS is not a good practice. The 20% sales pillars should be distributor type in traditional direct sales. For only the Pareto's 20% (the true productive leaders and business partners of Splash) can give the company a good collection efficiency rating (CER). That's the wisdom in traditional direct sales: let the 20% sales pillars help in the distribution of products (and of course in the collection of receivables).