Multi-Level Marketing Software 2020: A Beginner’s Guide

Multi-Level Marketing is a billion-dollar global industry. It is a marketing process using a direct marketing strategy by an MLM company to sell its products or services to the end-users with the help of a network that is not made of their direct workforce but are independent representatives. MLM company workforce does not belong to the payroll of the Company and is compensated in the form of commissions for their sales effort.

The term Multi-Level Marketing is often interchanged with Network Marketing, Referral Marketing, and Pyramid Selling.

The last one, Pyramid Selling (often, “pyramid scheme”), was originally a straightforward reference to the participants’ network structure resembling a pyramid. The structure, however, lends itself to easy scamming, and sure enough, scams have erupted, giving the MLM model its undeserved stigma.

Referral Marketing is about incentivizing customers to bring in more customers through referrals. It may be done by conventional marketing organizations as well as by MLM businesses.

While some opine that Network Marketing is a part of MLM, and some others think the opposite, the broad consensus is that the two items are indeed interchangeable.

A Multi-Level Marketing company provides an income to their ‘agents’ by way of commissions earned for distributing its products to consumers. Becoming an MLM agent offers a relatively easy opportunity to budding entrepreneurs to get into the business. The MLM agent is sometimes trained to sell the products and targets other interested people who wish to be MLM participants as his consumers. This allows him to not only make commissions on his sale but

also an added bonus on the sales that these new MLM participants bring into the system. The new participants then further go on to repeat the same activity. For all future transactions, he will not only make money off his own sales but also a small percentage of the commissions on the sale conducted by the MLM participants that he directly inducts into the system, and through them, others as well. Genuine MLM Programs do not offer incentives to sign more and more participants but focus on sales of their product lines.

It is important to understand and not get confused with the word Pyramid, often used in MLM businesses. Since it involves recruiting like-minded people as participants or downline of the MLM program to widen the base and reach out to more and more users, the whole structure is represented as a Pyramid Structure. To be sure, there is nothing illegal – or even immoral – about a Pyramid Structure, but the term has suffered in public imagination due to past scams.

MLM companies can have even hundreds of thousands of members worldwide selling their products. Some examples of Multi-Level Marketing companies are Herbalife Nutrition, Amway, Avon Products and Mary Kay. Herbalife is said to have more than 500,000 sales associates worldwide.

What is a Multi-Level Marketing Software?

Now that we know the potential scale of MLM businesses and the size that their operations may achieve, one can see how tedious a task it would be to micro-manage the various business functions, starting from recruitment of independent representatives through to the disbursement of commissions.

A traditional Multi-Level Marketing Software should be helpful to carry out business functions like onboarding the workforce, training, marketing, customer management, inventory, distribution, logistics, sales performance management and sales commission management.

In a business setting where everything is getting digitally transformed, MLM companies are also challenged to migrate to a digital technology platform and adapt to the social media environment.

MLM Companies are now challenged to migrate from person-to-person selling to digital channels. Customers have experienced digital channels and are happy with the experiences that big majors like Amazon and eBay provide, and hence MLM companies have to scale up their technology levels to bring in a collaborative software experience for their internal operations, network sales representatives and end-customers on the same platform by lending an e-commerce flavor to their platform.

MLM companies also want to use digital platforms to make use of their hundreds of representatives as social influencers to create eyeballs for their products.

Understanding the benefits of using a Multi-Level Marketing Software would be your best guide to deciding on if - and how - you want to deploy this solution in your own MLM organization.

Some of the key benefits are:

Improve Customer Reach

The conventional method of customer engagement management included meeting them in person at their workplace or at their home and follow-up over phone, mail or SMS. This used up a lot of time as it included travel time too. The use of MLM software has enabled reaching out to a greater number of users in the same amount of time.

Faster Onboarding of Reps

Recruiting a downline meant training and onboarding these resources extensively. It required sales coaching and explaining plans to them to recruit more people as their downline to keep expanding their network. MLM platform now allows new recruits to self-study using all the content available in the content management suite and undergoing the training modules thereby saving much time.

Sales Insights

AI-driven reports are powerful and can give pointers as to which products are being accepted well by the consumers, and which sales techniques and approaches are selling the best.

Improved Renewals

The success of an MLM business depends upon the renewal of subscriptions or orders on a regular basis. Scheduling helps increase the efficiency of ensuring that renewals do happen.

Efficient Operations

This model also depends on having a transparent system for calculation of commission for its success. MLM software helps in tracking sales of every individual on a real-time basis, populates the information for the concerned set of individuals who gain from that sale, and works out their commissions. The speed and reliability of such software make it easier for MLM companies to manage, track and deliver more efficiently.

The ability to collaborate and integrate with third-party software or additional platforms to make it feature-rich is an added bonus. For example, the ability to integrate with a third-party solution provider to create e-wallets for faster payment processing could be an important advantage.

Who are the Users of Multi-Level Marketing Software?

Any organization that uses the Multi-Level Marketing approach to reach out to prospective customers and closing sales deals is a potential user of this software platform. While the MLM organization can use it for its internal management, it can also extend its use to its sales affiliates for the purpose of signing up new affiliates, training, onboarding, sales performance management and creating individual dashboards for them. The affiliates then can track their sales and commissions, schedule revisits or reminders for repeat business, have access to product and pricing, and to the content management module to access product-related information. The communication module allows buyers/ customers to use chat for any queries through social media platforms.

Multi-Level Marketing Software must have a strong database structure to create and manage the participants’ network structure, which is the key to the success of this business.

From a deployment standpoint, MLM Software can be hosted on-premise over Web-based interfaces or can be availed and subscribed through Cloud and SaaS model service providers. The end users can use stand-alone systems as client users on Windows or Mac platforms. Most of the MLM software tools support Android and Mac interfaces for mobile users.

The following modules are typical constituents of MLM Software:

• Prospecting Tools

• Content Management

• Social Media Management

• Communication Management

• Order Management

• Inventory Management

• Shipping Management

• Payment Processing

• Commission Management

• Sales Reports

Artificial Intelligence in Multi-Level Marketing Software

It is well known that inferences provided by AI-based systems help in the decision-making process. Some of the areas where AI can play a role in Multi-Level Marketing Software are listed below:

Predictive Analysis

Some AI tools like H2O, Q Research or Oracle DataScience can be used on MLM data sets to extract information to model reliably and help improve direct selling to the end customer

Product Clustering

MLM companies can use AI tools to personalize relevant product offerings based on likes and dislikes of the customer.

Data Filter

AI tools can be used to highlight the likelihood of prospects turning into customers. It can also highlight customers who are more likely to repurchase.

Sentiment Analysis

MLM companies have adapted to the social media environment and run social media campaigns and advertisements on Facebook, Twitter, YouTube and others of similar nature to increase their presence as a part of their social media management strategy. AI-driven sentiment analysis can use inputs coming out of these campaigns to help in generating new leads and engaging with customers over useful conversations and offering right-fit products to them.

Communication

Chatbots, which are AI-based conversational tools can be deployed to engage with customers to handle their queries. They can be used to handle the communication management between the internal organization which also includes the MLM salesforce.

Apart from all of these mentioned above, use of Artificial Intelligence will influence Customer Targeting, Lead / Pipeline Management, Sales Forecasting, and Content Management.

MLM software has a critical role to play in boosting a multi-level marketing business. To be successful, an MLM direct-selling company needs to manage participant members’ profiles, members’ networking structure, payouts, rewards/ bonuses, inventory and logistics to connect and reach out to a very large number of members, who are also geographically well spread out. Efficient, user-friendly MLM software is critical for a profitable MLM business.

Most good Multi-Level Marketing Software companies understand the pain points of sizable distribution companies and their associates. They provide platforms that can function as e-commerce tools and assist with lead generation, marketing, customer management, and routine business functions such as inventory, distribution, and logistics. However, the most critical feature that makes an MLM software robust is the way it handles payments, which includes the commission tracking tool and the tax management module.

The following pointers may be kept in mind while choosing an MLM Software solution

Identifying Business Requirements and Adoption Challenges

Identify requirements and challenges. Mark out future risks, if any. There are many software options available in the market. Choose a product that can meet your challenges and take care of any identified risks that can come up in the future. The software that is proven in the market would help in minimizing the adoption risks. A detailed assessment of the capabilities will help to know whether it addresses the business requirements. Feature assessment without clarity on business requirements will lead to adoption challenges.

Compensation Plans

Members’ networking structure and compensation plans are key to the success of this business model. Check out the software capability to address these two crucial points. Find out if the software has the capability to merge multiple plans and if it allows customization. Do a reference check of similar installations on the product platform that is under evaluation.

SaaS or On-Premise

Cloud-based solutions have scalability, reliability, and reduced IT Costs since they are subscription-based and don't require investments in hardware and maintenance. Also, this kind of solution provides an opportunity for any user to login from anywhere, leaving the task of hosting and management to a service provider.

Technology Considerations and Feature List

All business function modules should work in real-time and not on batch mode. The application should be event-driven, and any event should reflect the necessary changes in the functions that have an associated implication.

The software should meet the performance requirements of the business not only for the current, but also future needs.

The service provider must have a roadmap for technology upgradation, especially on the customer side, as technology is changing very rapidly and MLMs would not want to be left behind in the business race due to technology impediments.

Integrations

The digital mode of selling requires that various options are made available for payment systems, sales order tracking, integration of SMS gateways and many others. Since a company cannot afford to have disparate systems, it requires an integrated solution that allows API integration with the core product. MLM Software should support these integration requirements.

Ease of Use

It is important to have a user-friendly environment where sales representatives can manage their own profiles, view the performance of their ‘downlines’, and generate reports so as to take action for better and improved performances. Not all sales representatives would be computer-savvy and hence an easy-to-use service would improve efficiency and productivity.

MLM Software can offer dynamic setting options where one can make changes on website content, plans, product pricing, sales information, product changes, post newsletters and many other tasks, thereby saving costs.

Budget

The solution should be cost-effective for the business. Business needs to assess the budget provision and estimate cost of the software along with other costs like training, ongoing support and overall cost of ownership.

Improving ROI using MLM Software

MLM Software can play a crucial role in helping an MLM business grow. MLM companies are always challenged to manage complexities owing to their complex MLM network structure and related payment plans which could be of varied nature based on products and geographies.

A well-managed software-based infrastructure can help in the designing of plans, income calculations, and directions on plans to grow business. An AI-driven setup can boost knowledge levels and help apply inferences to yield better returns on investment.

MLM businesses work on the model of distributing compensation equitably to keep the member confidence and trust high. These businesses run various compensation plans based on product lines, which means that members can be a part of multiple compensation plans depending on which product plans they are working on. MLM Software can do this efficiently and keep transparency levels high for members, forging their trust, which is so very essential for the success of this business model.

The biggest threat to ROI in this industry segment is data theft, and hence MLM companies have to put in place a robust system in place for the protection of data.