Selecting An MLM Software Provider

"Doing it Right the First Time"

An MLM Software Article
y Noel Flasterstein, MLM Consultant
©  2004

A Smaller Universe of Providers

There are probably less than 25 full-service software providers marketing specifically to MLM, Direct Sales, or Party Plan corporations.

In the ever increasingly competitive MLM Software Provider market, entrepreneurs and visionaries have several options when it comes to selecting a provider. One search on Google alone for “MLM Software” pulled 513,000 results in just 0.09 seconds. And from appearances, it would seem companies literally have thousands of providers to choose from. Of course, you need to take into account that a Google search is going to pull other MLM and software related services and products. The truth there is probably less than 25 full service providers marketing specifically to MLM/Direct Sales/Party Plan corporations. So you might think from appearances that you have several options and providers are competing “no holds bar” to get your business. With all these options in the market, like lending tree, providers are competing for you. And heck, with all the price variations and functionality options, you can be selective in your choice and grow into a new provider that has all the features and functionality that you anticipate needing when the time comes and you have the distributor base to support your selection. However, making the transition from a lower end, less reliable software system to a higher end full, feature system can be prohibitively costly, both in terms of lost revenues from the system not fully working in capturing all of your new distributor sign ups, and in customer orders and in down time in implementing the new more reliable system. And let’s not forget about the cost of lost distributors because the compensation plan programming lacked integrity.

The reality is there are only a few providers you should be looking at, MLM software providers are just like MLM consultants, many to choose from, but less than you can count on one hand that can meet your needs and requirements. And those few are not competing “no holds bar” for your business. They are competing for your business; however, they can also rely on their sound reputations and satisfied client bases to generate new business. Providers that can’t always deliver and have a history of dissatisfied and burned clients, however, are aggressively competing for your business, because new business is what keeps them going. They tend to have a problem in retaining their existing clients. And don’t make the mistake of equating style with substance. There are a lot of systems out there with a lot of sizzle from appearances, but in reality just don’t work as you anticipate. Likewise, there are some systems out there that look just plain boring, but their functionally and reliability cannot be questioned.

Selecting a Provider is No Light Task

Selecting a provider is no light task and must be addressed with the level of importance that it requires, same as in selecting a spouse. Once you’re engaged to a software provider, that’s it your married! And that’s right. If things don’t work out, your separation or divorce can be devastating in costs and lost opportunities. You are now face with the vexing situation of having to go back out an identify a provider that can meet your needs and requirements after you have already invested in a system that didn’t work not to mention the incalculable loss from lost distributors and customers who tried to sign up or place orders that your system failed to properly process. Remember, you only pay for quality once.

So if you have visions of your multibillion dollar corporation running on the “off the shelf” software that you purchased for less than $5000.00, then that is exactly what you have, visions. When you invest in a temporary fix to get you to the next level that is exactly how your provider perceives your relationship. Temporary. They have no vested interest in your company success and because the relationship is temporary they are not very concerned with your satisfaction or their product’s performance. These types of relationships between a prospective company and a service provider are perfect for the creation of false promises and unmet expectations.

Navigating the Options with Some Certainty

So how does one navigate the multitude of options available with some certainty? How do they begin knowing, that they are at least looking in the right direction? There are three sources one can go to get some certainty. First, you can get it from the source of your inquiry, the provider itself. Second, clients are always a good reference point. And third, the MLM/Direct Sales industry can direct your company to some solid providers.

First and foremost as I stated earlier, there are only a few providers that can meet your needs and requirements. So let’s just say of those 25 full service providers that I estimated earlier, as with MLM consultants, there are far less than those that hold themselves out as reliable full service providers than there are that can actually meet your needs and deliver upon your expectations. Remember, your getting married and this relationship is for better or for worse less death do you depart and we are talking about your company’s death, not the providers.

Well, what constitutes a reliable full service software provider? It is a provider that can meet your basic needs with an eye for the expectation that you will have explosive growth whether you do or don’t. Their system can handle the expected influx of distributors and customers to your organization. Everyone that’s somebody in the industry knows that one of the biggest killers of an MLM organization is its anticipated and unprepared for explosive growth without having the proper infrastructure to handle such growth. Simply put, your success can be your death knell. And if you’re considering a system that cannot handle explosive growth with the proper infrastructure, then you’re planning your own demise.

Look For Professionalism

The first indication that you are dealing with a reliable provider is their professionalism. Although they say you can’t judge a book by its cover, which is true, we can to certain extent. For example, I never read “War and Peace” by Leo Tolstoy, but I can tell by its cover it about some war during the 19th century and has nothing to do with the peace protests of the 1960’s Vietnam conflict. I would probably guess that it is boring, but that’s speculation that may or may not be correct. The point is we can make some initial assessments of whom we are dealing with by how they interact with us. So there are a few questions you can ask yourself after you have made initial contact with a prospective provider such as: Is the provider looking to close a deal or become your technology partner? Are they telling you what you need or asking you what your requirements are? Does their approach to the possible relationship entail a vested interest in your success or a plundering of your pockets? Do they have experience in adapting their system to your specialized needs and others similarly situated or do they want to consult and modify your existing business model to fit into their system? Do they disclose or conceal their existing clients?

Look for Integrity

Another indication of a provider’s professionalism is their reputation for integrity. Integrity in the fact when they program a compensation plan it will pay out exactly in accordance with the specifications you provided. It will not be altered in any way, shape, or form. And if it is, this should be because of misunderstanding of the specifications by the programmer that he can quickly correct once they understand exactly what it is you want to achieve. Be extremely cautious if a provider tells you that they understood your specifications, but took the liberty to alter your payout for the benefit of your business because their programmed version is a much a better compensation model. This probably means they really don’t know how to program your compensation plan nor have the desire to put in the effort and work to program what you want. Providers should also have integrity in letting you know that they have either handled requirements similar to yours or that they can specially meet and custom program your requirements. If they feel your needs are too specialized or if they are not currently set up to meet your expectations in a timely manner they will let you know. And this should occur at the point of first contact or shortly thereafter, not after the check has cleared and passed hands. The bottom line is they are not going to give you false promises and expectations. They will tell you up front if they can meet your current requirements. And guess what? When they can’t, they will even direct you to a provider who can, a reputable provider who can meet your needs and expectations. And remember, any provider of integrity knows that there is too much good business out there to burn a prospect for a few bucks for the cost of a tainted reputation. Like they say for the want of a nickel a fortune was lost.

Hey, let’s not forget. We are in the MLM industry. From top to bottom, and what holds true for the “in the trenches” distributor holds true for the corporate CEO of an MLM organization, as well as the service providers to the industry. Every thing is word of mouth and true MLM’ers are looking to make residual income not a one-time quick cash influx. And this all depends on relationship building and trust. A truly reputable provider is more interested in directing a prospective company to a more appropriate provider than attempting to sign on a client knowing they will never be able to fully meet their current requirements. They value the good reputation of integrity and the residual income from New Clients their reputation will generate more than the one time quick cash influx.

Look for Capabilities

If you’re considering a provider and you question them about their system’s capabilities in relation to your specialized requirements and all you hear from them is ”YES”, should this be a cause for concern? Not necessarily, it just means they have vast experience and have developed several systems for their clients with needs and requirements similar to your company’s. Likewise, when your hear “NO” from a prospective provider, this doesn’t mean that can’t provide you with an alternative solution already in their system or custom program a specification to meet your requirements, it just means they did not design their system specifically for your company’s specialized requirements. Think about it? If you engage a provider that has every thing you require specifically for your company in terms of specialized requirements, well then, they designed their system specifically for you before they even knew who you were. Not likely.

Invariably, a provider’s clients are your best references. Software providers fall into one of three categories when it comes to sharing their existing clients with prospective new clients. The first category will provide prospects with full disclosure and access to their clients, except of course, for those clients who wish to remain anonymous. The second category tends to be selective as to which clients they make available to their prospects. And finally the third category will not reveal or make available any of their clients. Now there has to be some reasons why providers fall into one of these categories. Obviously, a provider that gives full disclosure and access creates a sense of confidence that they are competent in what they are doing. It is also a sign that the have satisfied clients and have nothing to hide. Now it is understandable to certain extent why a provider may reveal some clients, but not all. But it does create questions of integrity, and which clients exactly are they introducing you to. Certainly, not the ones they have unresolved issues with. When a provider refuses to reveal or make their clients available to their prospects, they often state it is to “protect the privacy of their clients”. Well, I can’t say I have come across an MLM company that ever wanted to limit its exposure and protect its privacy. And this leads to our final resource in determining which software provider is the best fit for your company, the Industry itself.

So how can the MLM/Direct Sales Industry assist you in finding an appropriate software provider? Mike Sheffield wrote an article addressing this very issue. In his article he states as follows:

“If you ask enough of the right questions of the right people, a few names rise to the top over and over again. Once you narrow the search to the top three or four, you then simply interview each them and determine which is the best fit for your company.”

Mike Sheffield, MLM Software Providers: How to Choose One Eight Killer Questions You Must Ask Before Taking Your Step. (2003)

From Consultants like Mike Sheffield to MLM Attorney Jeff Babener, who have worked directly in the success of multiple MLM/Direct Sales organizations, key players in our industry, have a pretty good idea which software providers have facilitated their client’s growth and which ones have not. They have first hand knowledge, albeit, vicariously through their clients which providers have integrity in meeting your requirements and expectations. And remember, these guys have a vested interest in their client’s success too, so they are not are not going to recommend or feel comfortable when their client’s choose a provider that is not a reliable full service provider or lacks integrity in their compensation plan programming and system’s performance.

So there you have it. Three resources can be instrumental in helping you identify the best software provider for your company: providers, their clients, and the industry. Do your homework. Questions that you ask from the big three, will lead to addition questions and ultimately to a solution.

Noel H. Flasterstein is the Director of Sales and Marketing for MLM Technology Corporation, a full service software provider for the MLM/Direct Sales/Party Plan industry. He began his career in the MLM industry as a distributor in 1995 while attending Law School. He made the transition to MLM corporate management in 1998 and began working for MLM Technology Corporation in 2003.

Jeffrey A. Babener
Babener & Associates
121 SW Morrison, Suite 1020
Portland, OR 97204
Jeffrey A. Babener, the principal attorney in the Portland, Oregon law firm of Babener & Associates, represents many of the leading direct selling companies in the United States and abroad.

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