MLM software
By Dan Jensen
Computer systems
in Direct Selling companies become the glue that binds the office departments
together, a "core" around which the business is built. No successful Direct
Selling company has ever sustained their success without a well-designed
computer system behind it. Likewise, there are many Direct Selling companies
that have failed due primarily to the lack of a good computer system. Don't let
your new venture become just another statistic. Choose your software vendor
wisely.
What is a good
Direct Selling computer system?
There are three
major pieces to any computer system:
-
The
equipment or "hardware" is comprised of the main "server" which
does most of the "thinking", disk drives to store the business information,
work station computers, and printers for reports. Fortunately, the cost of
equipment has declined drastically in recent years while the performance and
capacity to process business information has increased many fold.
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The
operating system software makes the computer work when you turn
it on. It comprises the programming language that the business application
software is written in, the commands necessary to create a back up tape of the
data to avoid loosing all the information, and many other commands necessary
to simply keep the computer working as conditions change. Without an operating
system, the computer is nothing but plastic, metal, chips, and silicon.
Operating systems include Windows 98, Windows NT, Windows 2000, UNIX, Linux,
AIX, and scores of others.
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The
application software is the most important part of the computer
because it is the piece that determines how you run your business. The
hardware and the operating system are of little importance compared to the
application software. This software provides input screens for order
processing, creates your commission checks, prints downline genealogy reports,
and provides look up information to handle distributor inquiries when they
call the office. In short, this software is the core of running your business
successfully. It will make or break a Direct Selling business. Your procedures
and policies will have to conform exactly to your software or you will be
forced to change the software, sometimes at considerable expense, to conform
to your policies and procedures. This is one reason it’s so important to
choose wisely the software you use.
The greatest
mistake companies make in this area is to think they can save money by writing
their own software. Not only does this take years to do, but it can never
reflect the experience and know how that packaged Direct Selling software
contains. Why reinvent the wheel? Would it be worth the risk of losing the
business to poorly designed software resulting in incorrect commission checks,
errors in tracking a person's downline records, lost orders, and so forth? Those
companies that elect to write their own Direct Selling software often find later
on that they are vulnerable to the programmer who wrote it. What if he moved
away or became injured or sick? What if he took another job at a higher wage?
Never let someone convince you they can program a Direct Selling software system
in weeks or months. It's never been done successfully before. Why should you
believe it could be done, now? Companies such as Jenkon have spent many years
writing Direct Selling software that works right the first time, every time, and
offer it to the public for a small fraction of what it costs to create it. It's
the best money you'll ever spend.
How do I choose
a good Direct Selling software package?
While this report
does not have the space to address this subject fully, a few suggestions should
be noted:
-
Choose a reputable vendor. There are many fly-by-night software
companies that make many claims of experience, know how, and software
gadgetry. Unless you are willing to be a guinea pig (and put your business at
risk), choose a vendor that has a proven track record. Track records are built
over many years of working with Direct Selling companies, not just selling a
software package a few times. Indeed, only having a small handful of clients
may speak more about a company's persuasive abilities than their actual know
how and skill. Above all, check out at least six references. Remember
that vendors will be eager to provide only their best references. Always get
the names of other companies from these first references that you might call.
You might be surprised to find a different story when you call companies not
included in the reference list.
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Visit the software company's office. When you choose a Direct
Selling software package, you not only choose the software, you also choose
the vendor's support services. If the vendor is not able to provide support
services acceptably, what will you do when you need to change your
compensation plan, or add a new input field to the order entry screen? Jenkon
has serviced over 800 Direct Selling companies since 1978 and has yet to find
one company that has not needed support services at some time after the
installation. There is only one constant among all Direct Selling companies -
they constantly change things! And your software will need to be changed as
well.
While at the vendor's office, meet the vendor's people that will service you.
What kind of people are they? How long have they worked for the vendor? If you
find they are relatively new, either the vendor has little experience, is
growing rapidly (in which case you may have trouble competing with other
clients for good service), or has high staff turnover. All these can mean
trouble for you as the vendor may not be able to handle your needs quickly and
competently. Be willing to pay for experience and competence. You'll pay far
less in the long run. If you think knowledge is expensive, try ignorance!
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Avoid very small software companies. Small software companies, to
compete with larger established firms, must offer software at bargain prices.
This often puts them on shaky financial ground during their most critical
years. Many Direct Selling companies, trying to save money by purchasing
software from these small software houses, find themselves virtually abandoned
later on when they need assistance. The problem is that servicing one highly
successful client can consume virtually all of the human resources of a small
software company leaving the other clients out in the cold. It can take months
(or years) to train competent software technicians on a Direct Selling
software package. The more deadly problem, however, is that smaller companies
tend to go out of business without warning. The Direct Selling industry is
especially brutal on small software companies and has caused a number of firms
to close their doors leaving their clients high and dry. If you value your
business, stay away from the small vendors and stick to those with staying
power and track records.
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Buy
a software package that allows you to create your own reports.
Many packages force you to live only with those reports they put on the menus.
Managers must resort to running large reports to answer small questions or
concerns instead of small exception reports on demand. Small exception reports
can be reviewed quickly and accurately. Large general purpose reports can take
hours to review and digest; this is not a wise use of a manager's time. The
computer industry has adopted a standard in modern software engineering that
allows non programmer users to type free-form queries on a computer terminal.
In response, the computer provides specific and focused information according
to the query. For example, suppose a manager wants to see a list of all the
distributors in Florida with a group volume of $5,000 or more. Most modern
software systems would allow the manager to type a relatively simple command
sentence to obtain the report.
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Make
sure the company can program your compensation plan. Compensation
plans are complex and take massive amounts of experience to program properly.
When you have your tax return prepared, do you go to an inexperienced person,
or do you find the most competent one who is also reasonably priced?
Compensation plan programming is not something inexperienced programmers
should be doing.
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Do
you plan to expand internationally someday? If so, choose a
software package that incorporates international issues such as currency
conversion, language translation, cross border sponsoring, V.A.T. tax
reporting, and foreign address formats. Is the software also available in
other languages so your foreign speaking staff would not all need to speak
English to use it?
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Buy
software that can work on bigger computers as well as a PC. While
personal computers are terrific for starting a new company, they are not cut
out for larger successful Direct Selling operations. Most personal computers
allow only one person to use the computer at any given time. Networks allow
PCs to be linked together and can grow to become quite powerful and large.
Most large Direct Selling companies have either a large minicomputer with
several hundred workstations attached, or larger mainframe computers. In
either case, if you expect to be successful, don't limit yourself by choosing
software that only runs on PC computers.
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Compare features. Software is designed to handle specific
business issues and often has a great deal of difficulty dealing with matters
outside the original design. It's difficult to force a software package to do
things it was never intended to do. Wise computer buyers compare features and
capabilities, side by side, of one package to another. Ask the vendor which
features they consider are unique to their package compared to others. A
package that is missing an important piece will never be a bargain at any
price. As you compare software, use the feature list of the package that has
the most to offer, and compare the features of the other packages to it,
feature by feature. You'll be quite surprised as to how many "holes" the other
packages might have.
Remember that you
aren't just buying a computer; you are buying software, expertise, emergency
support services, programming services, and starting a long term relationship.
Choose your software vendor wisely. Of all the aspects of a start up Direct
Selling business, don't be tempted to penny pinch in the computer area. If you
do, you may cripple your chances for success.
About the author, Dan Jensen is the founder of Jenkon
International of Vancouver, Washington, (360) 256-4400 an acknowledged leader in
technology systems for the direct selling industry. He is widely recognized as
one of the foremost experts on mlm software, and is a frequent lecturer and
writer on the subject. Visit the Jenkon site at
www.jenkon.com
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