How to Double Your PV from the Same Number of Customers
Special Report for Amway® Distributors
Leverage is the skill of gaining the highest possible return from the lowest possible input. By applying it intelligently, you can literally double your retail sales from a given number of customers. All it takes is a bit of creative thinking, and some basic knowledge of your market place, your customers and their buying habits.
John Counsel of The Profit Clinic suggests a simple application for Amway® distributors that can do wonders for your retailing results.
Many Amway® distributors discover the retail facts of life early in their careers… that there are established patterns in their customers’ buying habits that can make the business slow and frustrating to build. What most don’t realise is that their own selling habits can make this problem worse.
The good news is that, with a little intelligent leverage, these habits and patterns can be turned to both your own and your customer’s advantage, with outstanding results.
The “Buying Limit”
See if the following attributes of retail customers are familiar to you. Remember… these are generalisations, not hard and fast rules.
- Most customers are women.
- Most of them are responsible for cleaning and housekeeping, even if they work full-time outside the home.
- The typical customer has an emotional buying limit of between $30 and $60 per visit. Not per month, per week or per fortnight… per VISIT . No matter how often or how seldom you call on them, that’s the limit of their spending. It may have to do with their perception that purchases from you are “extras” to come out of that week’s house keeping budget, or that anything more requires their husband’s consent. Whatever the reason, most distributors find this limit applies.
The “Buying Pattern”
No matter how many products are added to the range, it’s an inescapable fact of life that the key product, around which all other purchases revolve, is laundry powder. This one product still accounts for the lion’s share of total sales volume, worldwide.
- If a customer buys nothing else, she will usually buy the laundry powder.
- Her buying pattern will usually be determined by her usage of the laundry powder: she often doesn’t want to see you until she’s ready to buy more laundry powder!
The Sales Killers
This pattern of behaviour gives rise to several unhappy consequences that can limit your monthly PV and BV severely. And, as you’ll see in a moment, your own selling habits are probably making this situation worse!
The “Bigger-is-Better” Fallacy
When you first come into the business, your sponsor, your Directs and other upline leaders will typically encourage you to sell all your customers a 3 kg or 6 kg box of laundry powder. Bigger commissions, higher PV and BV, and less work are the usual reasons given. Here’s what it really does.
- First, it gobbles up the bulk of your customer’s buying limit of $30—$60 per visit. If she’s spending $33 or so on laundry powder, there’s not much left for other purchases.
- Second, since her buying pattern is determined by her use of the powder, and a typical customer may take 6-8 weeks to use a 3 kg box, that’s how often you’re likely to get to see her. And there are some unpleasant snags that regularly make life difficult.
- No matter how well you service your customers, they will rarely ring you when they run out of product. Instead, they’ll get something at the supermarket or convenience store “just to tide them over”. So you arrive a day or two later, only to be asked to call back in a week or two. Meanwhile, they’ve run out again. There’s a danger here that they’ll break the habit of buying from you completely, because they simply don’t have regular contact with you.
- Then there’s the agonised grimace when you deliver the laundry powder and tell her the price of a 3 kg or 6 kg pack. Sure, she knows it’s terrific value, and it works brilliantly. But it’s still $33 or $60 “just for laundry powder” — and she resists other purchases!
Of course, this doesn’t apply to every single customer. The exceptions make the rule. But you know, from your own experience and that of others in your organisation, that these situations are all too common.
All of a sudden those “bigger commissions” and “higher PV and BV” don’t look so good. The theory’s great… but the reality’s not.
When you think about it, getting to call on your customer only every 6-8 weeks, having her spend most of her “limit” on one product (and wincing at the perceived high cost) — while running the risk that she’ll run out and replace it with Brand X in the meantime — isn’t such a bright merchandising strategy after all.
And if you’re selling her a 6 kg pack, it’s even worse, because it can be six months or more before you get to sell to her again!
Little fish are sweet!
How much better — and more sensible — it would be to gear your retailing in such a way that:
- your customer sees you 2 or 3 times a month.
- she still spends $30—$60 per visit (that’s $60—$180 a month!)
- only one-third of her buying limit is spent on laundry powder per visit (so she’ll spend two-thirds on other products, 2 or 3 visits per month!)
- you’ll become such a regular part of her overall buying pattern that she’ll begin to genuinely value your service and expertise, and begin expanding her purchases across the entire range, including a steady increase in her “buying limit” as she enjoys the benefits daily. No more rushing out to the supermarket or convenience store!
The result is easy to see… your PV and BV will increase dramatically — from the same number of customers!
The choice then becomes yours… whether you service all of those customers 2-3 times a month, or whether you reduce the number of customers so that you only have the same number of visits per month as you do now (perhaps by sponsoring some of them, or giving them to your downline).
How is it possible?
Is it some kind of miracle? (Not really. It's intelligent merchandising strategy.)
Can anyone do it? (YES!)
Can it be done this month? (YES!)
Do you need to change anything but your retailing approach? (No.)
Can you maintain that level of retail volume consistently? (YES!)
What’s the key to this kind of success?
The answer’s beautifully simple, and it’s right in front of you every time you pick up a price list or catalogue. One product alone holds the key to your dramatically-increased retailing results.
Can you guess which one?
Here’s the secret…
The much-despised “Pensioner Pack” — the humble 1 kg laundry powder — is the secret. But before you scoff, look at the extraordinary benefits it offers you!
- Your customer gets 15—18 washloads from a single 1 kg pack. About the same as from a 3kg pack of more expensive Brand X*.
- That means there’s an immediate perceived advantage to her in saving on cost alone, even before she enjoys any actual product benefits!
- It also means that she’s spending less than one-third of her Buying Limit per visit on laundry powder — leaving around TWO-thirds to spend on other products in the range.
- It means that you’ll be back in 10—15 days to sell her more of everything, because that’s how fast she’ll use up that neat little pack — about the same as a 3 kg pack of Brand X*! No more grimaces at the cost (it’s cheaper than Brand X*!) and no more ducking out to the supermarket. It also takes up a lot less laundry space than a 3 kg or 6 kg box.
- Those more frequent visits — and purchases right across the product range — will make you a familiar face, and you’ll soon become an habitual part of her regular weekly or fortnightly buying pattern.
- You’ll average 2 to 2.5 visits per month per customer for an average $30—$60 per visit. That’s a regular $75—$150 per customer every month.
Imagine having 20 customers on that kind of buying cycle?
Imagine your whole group doing the same!
Initial Customer Presentations are Easier
Try this simple, powerful demonstration on your next retail prospect.
- You’ll need two squares of black builder’s plastic (about 45cm or 18 inches square), a graduated measuring cup, an Amway® measuring scoop, a funnel, a 1kg box of Amway® laundry powder and a 3 kg box of Brand X* laundry powder.
- Place the 1 kg pack next to the 3 kg Brand X* pack and explain the difference in size and how it’s possible to get the same number of wash loads from both because of superior technology.
- Next, show the number of washes in each by measuring out onto the black plastic squares, and counting them, one at a time, according to the manufacturers’ specificstions — don’t forget to explain why your laundry powder is concentrated and what that means for her in terms of better wash, less wear and tear on clothes, less rust, less gunk in her washing machine, fewer maintenance calls, less environmental impact, etc, etc.
- Explain the product benefits, then show the immediate price advantage… forget about how many fractions of a cent per wash your customer will save. She couldn’t care less. But tell her that she’ll save $2 or $3 dollars on every box of laundry powder she buys and watch her reaction!
The black plastic squares highlight the volume comparison visually, and you can pick them up and pour the powder back into the boxes via the funnel — very important with those fiddly openings in Brand X* boxes. (Use the opportunity to highlight the packaging advantages.)
Practice the demonstration so that you can do it with minimal fuss (there’s an awful lot of powder in 3 kg of Brand X*).
This presentation also focuses her on the concentrated nature of the product, and the correct amount to use.
She’ll be happy to try it, and you’ll be able to predict her consumption — and have replacement packs on hand for your next visit, knowing that your customers will be needing them. What’s more, you’ll be better able to afford to stock them!
That’s service.
And profitability!
The challenge now is to look for other ways to add leverage to your business activities, in every area including sponsoring. (Check out the retailing, sponsoring and training sections of this website!)
The great thing is… it works!
* Be sure to use only standard Brand X powders – not concentrated formulations.
- Prices shown are applicable to Australia. Allow for variations between countries and currencies.
Amway® is a registered trade mark of Amway Corporation of Ada, Michigan, USA.
© 1995 John Counsel. All rights reserved. No reproduction by any means permitted without prior written consent of the copyright owner.
