UP AND RUNNING: HOW A DISTRIBUTOR’S FIRST PURCHASE MATTERS MORE THAN WE THINK

I recently attended a wonderful event with some of our distributors and customers. My favorite thing is to talk with as many attendees as possible. I find that their insights and their passion is invaluable to my position as CEO (in fact, I feel far too many CEOs are disconnected from their business owners, but that is a subject for another article).

One amazing man I met happened to be a father of four and a customer. As a father of five myself, we hit it off immediately. He told me of his incredible personal experience with our products and how they had changed some things drastically within his family, so much so that he found himself telling everyone he knew about them. And if he was going to be telling everyone anyway, he wanted to become a distributor.

I couldn’t be happier for him. I gave him my number and told him if there was anything I could do to help him be successful, to please give me a call. We would do whatever it takes for his business to succeed.

But then, he had a question for me that made my CEO mouth water.

He asked me if it made a difference which business pack he bought to get started. Silver ($300), Gold ($600), or Platinum ($1200). (Each of these progressively increase in the amount of product they provide, but more importantly to him – they increase in price). I wanted to immediately respond with the benefits and perks we offer for those who purchase our top tier platinum pack, but instead, with a look of childish delight on my face I replied, “let me run the numbers and get back to you.”

And I did. I went to the office and started digging around our database. My question was simple: does the initial pack a distributor buys make any difference at all to their long-term trajectory as a business owner? And if you’re guessing the fact that you’re sitting here reading this article means that it does, you’d be right. In this case, the numbers tell an interesting story.

THE BIGGER, THE BETTER

The short answer to that now-distributor’s question is that his initial purchase isn’t just important—it could be critical to his long-term success.

We discovered that if a distributor initially purchases a Platinum Pack vs any other pack we offer, they progress through their ranks faster. And not just slightly. Their trajectory was the difference between a glider and a rocket. It was eye-opening to see.

I took a look at three key ranks in our company – those doing roughly $5,000/mo in organizational volume (we call this rank Pro 3); those doing roughly $20,000/mo in OV (Pro 5); and those doing roughly $100,000/mo in OV (Pro 7). Those platinum pack-purchasing distributors reach Pro 3 544% faster than those coming in on other packs. They reach Pro 5 a whopping 334% faster. And they get to Pro 7 an incredible 365% faster. Obviously, this is significant. But that’s just the start.

Those same distributors have a 56% higher monthly purchase output,

Their average check is 116% higher, 116%!

And compared to distributors who initially invested in a lower-valued pack, they enroll five times more.

Most importantly, these distributors stick around longer – at a rate of 75%.

Let me caveat this for a second because I know a lot of you are thinking “wait, of course you’re going to recommend the most expensive pack—you’re the CEO of the company.” I get it. But LifeVantage is much better served in the long run if we can help our distributors achieve long-term, sustainable growth within their individual businesses. Future success is always more profitable for everyone. Besides the fact that “frontloading” is dangerous for the long-term health of a company and foolishly tips the supply vs demand scales. It just so happens that a higher initial investment upfront correlates strongly with a higher yield down the road. And there’s a few psychological reasons behind the numbers, but today I will only focus on one.

SKIN IN THE GAME

The beauty of our business is the low barrier of entry. It puts owning a business within reach of any entrepreneur, rather than just those with a silver spoon or an angel backer. It removes barriers – however, it can also become one of the greatest barriers. If we let it.

There is an edge to having “skin in the game”.

It’s easy to say you want to quit your job or hike Mount Everest. But until that resignation letter is sent or you’re freezing at Base Camp, you don’t have much skin in the game. So many people say they want to do something, but until you take that first step and jump in with both feet, it’s all just talk. The same holds true for starting a business. It doesn’t truly become a reality until you’re invested ­– until you decide you are going to give this your absolute all for the next 24 months, or when you put the down payment on that expensive franchise, or move your family across the country for that new career. Especially in this industry, where there is little-to-no overhead and it’s easy for distributors to nibble away at a semi-opportunity, putting skin in the game is important.

GROWTH COMES FROM STRETCHING OURSELVES

The psychological principle behind this is one that we all inherently know. Our default mode is to stay safe and secure. It is what comes easiest. But if we only ever did what was “easiest”, we would find the most comfortable spot in the world, curl up and stay there. Probably binge-watching every obscure Netflix title that pops up on our screen. But then our muscles would atrophy, we would wither up… and die. We would not grow in any meaningful way other than sideways.

This life has always required going against that “instinct” – doing something we find difficult, or new, or challenging to grow. The only way you can get stronger is to lift weights you don’t currently lift. The only way you can get smarter is ask questions you don’t currently ask. It is a fundamental principle that in order to go somewhere we have never gone before, we need to do something we have never done before.

And that journey always requires a first step. The less tentative that step, the less possibility we have of convincing ourselves to retreat back to that comfortable spot with Netflix.

ANCHORING OUR RESOLVE

Because we inevitably hit hard spots – the weight gets hard to lift, we have a bad day, we experience rejection, or someone offers that sugary treat you’ve been avoiding in your diet. If you are just “testing the waters”, the chances of you turning back are fairly high. But if you have some skin in the game, if you have made a physical commitment and anchored your resolve, it won’t be toppled by the inevitable strong wind. It is much easier to keep plowing through that difficulty until you arrive at the reward you are after. The best things in life are always on the other side of something “difficult”.

Putting “skin in the game” actually rewrites our brains. It flips on the orbitofrontal cortex, the part of our brain responsible for confidence. It allows us to stick with our decisions past initial hardships.

And I believe this is why we see such a dramatic increase in rank advancement, monthly purchasing, and longevity among distributors who make a big initial purchase. They have skin in the game. They have rewritten their brain for success. Instead of dabbling, they’re committed. The rest is a domino effect. Committed distributors start working harder, and they do it faster because they want to make sure that initial investment pays off. Then that becomes cyclical. It feeds itself – distributors that are working harder and faster see success quicker, and that gives them the encouragement and confidence to keep working – which again leads to more success, more confidence, and on and on.

I couldn’t wait to present these results to my new friend. I could confidently share with him the road that each pack would set him on. Because after all, isn’t it our job as network marketers to set new entrepreneurs on the best path to success and help them along the way?

 

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Darren Jensen

President and Chief Executive Officer at LifeVantage

Darren Jensen | Bio
Darren Jensen is the CEO and President of LifeVantage (LFVN), one of the world’s preeminent publicly-traded biohacking companies. A biohacker in his own right, Darren is an emerging authority and thought leader in the biohackersphere and field of nutrigenomics.
With nearly 30 years of experience in the direct selling industry, Darren has co-founded two DSN Global 100 companies and has served in a variety of leadership capacities over the arc of his career for multiple privately and publicly-held companies in the industry. He has been named to the Ambassador of Network Marketing Hall of Fame and has repeatedly been voted one of the top CEOs in the direct selling industry. Darren is a member of the CEO Council for the World Federation of Direct Selling Associations and also serves on the Direct Selling Association Board of Directors. He has lectured and given presentations across the globe on a gamut of issues impacting the industry.
Never one to shy away from rolling up his sleeves and getting his hands dirty, Darren also served as a volunteer firefighter in his hometown in the wake of 9/11. He has also served in a variety of roles for the Boy Scout of America. He holds a bachelor’s degree in International Relations from Brigham Young University with a focus on international business development. Ever a family man, he and his wife, Carolee, are the proud parents of 5 children and impending grandparents of 1.

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