Q: My
business career has been spent mostly in retail store sales. While
I have recently done well in direct selling and network marketing,
it seems odd that these type of companies don't give the
attention to their product packaging that we did in the traditional
retail world. Wouldn't these companies have better success if
they developed great packaging for the products?
A:
Preparing and promoting a product via packaging is critical to
retail competition. While important, packaging isn't quite as
critical in network marketing. Why? Most sales are created by word
of mouth promotion.
The passionate testimonials of independent representatives
create enthusiasm, and their personal passion is contagious. This
enthusiasm causes otherwise skeptical people who probably
wouldn't buy, no matter how appealing the package may be, to
make an emotional buy-in to the product. If the product performs as
promised, the company and the independent distributor can count on
reorders from yet another satisfied customer.
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You see, in the retail market, a great label, a unique bottle
design or dynamic box may well prompt the first purchase of the
product. But if that product fails to satisfy the customer's
need, there won't be a reorder. Enough unhappy customers and
the product dies. The same goes for network marketing.
In the past, most network marketing packaging was average to
poor. But loyal distributors and their personal customers drove
sales home. Their efforts created some of today's largest
network marketing companies.
Today, more and more network marketing companies are paying
closer attention to product image and packaging. One reason for
this change is the significant number of entrepreneurs entering the
network marketing corporate management world from the traditional
business world. Trained in conventional corporate marketing
concepts, they can easily fall short if they focus more on
perception than they do on quality and performance. It is always
important to consider how attractive, fancy packaging can drive up
costs, which, of course, are passed on to the customer.
One of the many great things about marketing products using
network marketing distribution is the elimination of competition
with the myriad of similar products on the store shelf. In fact,
you're not even competing with other network marketing
companies!
When a prospective customer checks out your product, that's
all they're checking out.
Because the customer isn't comparing product brands, but is
motivated by the product story, its benefits and the enthusiasm of
the independent distributor, the network marketing company
isn't under pressure to invest in elaborate and expensive
packaging. They can invest more on the quality of the contents and
make sure the product delivers its promise while keeping the
product cost-effective. At least that's what they ought to
do.
Quality is critical. A company endeavoring to build a legitimate
long-term business must have products that perform—products
that people want to buy again and again.
For all their similarities, network marketing and retail
marketing are different on this point. Retail marketing relies
heavily on traditional advertising to build brand awareness or on
unique packaging to stimulate impulse buying.
Example: Because of shelf space competition, a retail product
may need a full-color label or a decorative outer box to stand out
from the pack. Because a network marketing product is presented by
the enthusiastic distributor, it already stands out. Hence, you may
get away with a two-color label.
In network marketing, buying decisions are usually based on the
customer's response to a live demonstration or verbal
explanation of the product. It's a one-on-one presentation,
with the individual attention of a friend selling to a friend.
Consequently, that customer makes a more informed buying decision.
And while still important, the actual package of a network
marketing product isn't as critical as its retail store
counterpart. It's just a different issue.
Again, I'm not suggesting that network marketing product
packaging doesn't matter. It does. The product needs to have a
professional image. Distributors deserve a sense of pride in their
product. Their customers need to feel confidence in the product.
The package says a lot about the competence of your company. All
I'm saying is that, in most cases, the package just doesn't
have to be inordinately fancy to get the job done.
Michael L. Sheffield is the CEO of Sheffield Resource
Network, a full-service direct sales and multilevel marketing (MLM)
consulting firm. He is also the co-founder and chairman of the
Multi Level Marketing International Association (MLMIA). He can be
contacted through http://www.sheffieldnet.com.
The opinions expressed in this column are those
of the author, not of Entrepreneur.com. All answers are intended to
be general in nature, without regard to specific geographical areas
or circumstances, and should only be relied upon after consulting
an appropriate expert, such as an attorney or
accountant.