The 5 Types of MLM Distributors: Who They Are and How to Keep Them Active

If you’re like most MLMs, you’re always looking for great ideas for boosting distributor retention. In our experience, one of the best ways to keep your salesforce happy and motivated is to cater to their individual needs, and that means getting to know them. Although each distributor is different, we’ve discovered five distinct groups you’ll find in virtually every direct selling compensation plan. We’ll introduce you to each one with tips about keeping them engaged in building your business. Let’s get started! 

Types of mlm distributors by InfoTrax. Consumers.

First up are consumers. These are people who are only interested in buying your company’s products—they never sponsor anyone else or build a following. For most companies, your largest distributor group is probably made up of consumers.  

Some companies are losing this category thanks to recent FTC rulings, signing up their product-lovers as preferred customers, rather than recruiting them. This is a really smart way to keep in contact with all of the people who purchase your products while keeping your business FTC compliant.  

Either way, consumers are a very important part of your company—they’re responsible for most of your profits and fuel commissions for the rest of the distributor types. 

What they need: 
Consumers are a very different type of distributor than the other groups, so they should be getting specialized treatment. For example, the last thing a consumer wants is an inbox clogged with marketing tips or sales advice. When they hear from you, give them the information that will help them do their job as consumers—things like new releases, flash sales and product education will be your best bet. 

The consumers’ job is to buy and use your products. If you can make it as easy as possible for them to do that job, they’ll probably stick with your brand for longer and engage with your company more often. 

Types of mlm distributors by InfoTrax. Social Enrollers.

Social Enrollers: 
The second biggest group of distributors in your organization is likely made up of social enrollers. These extroverted product gurus don’t usually build a downline, but they bring plenty of people to your company. They love to talk about your culture and products to everyone they know—their mom, best friend, next-door neighbor, hairstylist, anyone!  

Social enrollers bring people to parties or product demos, but they’re usually not comfortable making a sale or talking someone into being a distributor. They simply love to share what they’re interested in and enjoy the atmosphere.  

What they need: 
Social enrollers actually don’t need a whole lot of company intervention to do their jobs right. What they do is intrinsically rewarding—by talking to people around them about your business, they get to unleash their inner social butterfly and help the people they love live better lives. For a social enroller, there isn’t much better than that!  

Things like moderate commissions for enroller downlines or thank-you discounts are great ways to make sure this distributor group feels appreciated in your plan. But avoid making the mistake of overcompensating them—most of your commission dollars should be geared toward sales-generating activities and distributor types.  

Types of mlm distributors by InfoTrax. Salespeople.

The third distributor group is made up of salespeople. Most of the distributors in this group joined your business to make some extra money part-time, maybe for something like a car payment or a vacation savings fund. Most salespeople will be reaching for shorter-term goals like these instead of working toward financial independence or a corporate celebrity status like their leaders. 

As far as the role they play in your distributor force, salespeople work closely with consumers and distributors’ customers as well as social enrollers. They handle the educational and transactional parts of small parties, online events and other get-togethers. The importance of sales people is hard to overestimate—the earnings stability of this distributor group (and sales leaders) is one of the surest indications of the health of your company. The steadier their income, the better all of your other processes will run. 

What they need: 
Salespeople need to be well-compensated in your plan because sales are the most important piece of your business. They need to know that they’re being paid for what they do in a way that makes them want to continue doing it for your company.  

Remember, though, that extra money truly means extra money for salespeople, so don’t worry if some of them steadily earn “only” a couple hundred dollars a month. A better way to measure their success is to compare their earnings to the time it took to make them. If salespeople aren’t making a generous hourly wage, they’ll start to look elsewhere for a better opportunity. 

Types of mlm distributors by InfoTrax. Sales leaders.

Sales Leaders:  
The next group is made up of sales leaders—distributor veterans with big goals and ambitious plans. Sales leaders are essential to your success. Not only do they have great selling skills, they also excel at recruiting new distributors to their teams. They see your company as an opportunity full of potential, and are willing to work hard to see theirs fulfilled.  

What they need: 
Sales leaders, frankly, have a lot to do. Most distributors in this category are fully committed to your opportunity, often on a full-time schedule. Their amazing recruitment skills come as both a blessing and a curse to them. Downline growth boosts commission checks and helps with rank advancements, but taking care of and motivating each distributor is an exhausting amount of work. 

The best way you can support your sales leaders is to give them tools that make their work easier and more manageable. Things like alerts, downline visibility tools, communication channels and anything that simplifies mundane or repetitive tasks will be a huge help to them in getting their jobs done right. 

It’s important, too, to pay your sales leaders generously. Like we said before, sales-driven actions create the most success for your business, so make sure the people who make it happen are well-celebrated in your compensation plan. 

Types of mlm distributors by InfoTrax. Dream Builders.

Dream Builders: 
The final group is the smallest but most powerful in an MLM compensation plan: the dream builders. They feed off of your company’s vision and then use their talents to motivate and support massive downlines, setting big goals and helping others along the way.  

Dream builders make the most money, speak at conferences, open up new sales areas and countries and interact closely with executive teams. While you don’t need a lot of dream builders in an organization, every MLM needs at least one to be successful. 

What they need: 
It’s important to keep dream builders in-the-know because they’re the ones who are most devoted to your business’s success. Dream builders can tell when your decisions either support or undermine the company’s wellbeing, and they’re sure to be vocal about it! And remember, their opinions about what you’re doing or not doing can have far-reaching effects.

As far as compensation goes, a dream-builder should never reach a point in their plan where they’re essentially paid to do nothing. For every direct selling company, walking the line of paying residual income and rewarding organizational stability is tough to do. Of course, the dream scenario for every dream builder is to construct a downline that’s so healthy and solid, it continues to flourish while they step back from time to time and enjoy the benefits of the compensation plan and their hard work, and there’s really nothing wrong with that. 

This idea only becomes a problem if this reward is set up as a “retirement program,” rather than a lighter workload. If your dream builders reach a point in your plan where they’re paid without doing anything, their excitement will fizzle out and their apathy can create major problems throughout their downlines.  

Instead, your distributors should expect to continue working to earn commission checks. Introducing infinity commissions will keep them interested in growing their teams, and exclusive, high-level pools will focus their attention on specific parts of their business. Be sure, too, that you have a replacement strategy for dream builders as they start to slow down. Adding incentives and creating graceful transitions in your plan for your top-level earners will ensure a steady stream of motivation and excitement flows through your entire salesforce, keeping your downlines healthy and industrious.  

So, now that you know a little more about the five distributor types and what they need to be successful, talk to your compensation strategy team about the specific ways you’re motivating and rewarding each one. If you find areas where too much or too little attention is being given, tightening up your direct selling strategy can help to bump up retention and drive more consistent sales for your whole organization. 

Types of mlm distributors by InfoTrax

Want to know more about motivating your distributors and improving your compensation plan? Contact us here for more information about InfoTrax, our software tools, and our commissions consulting services.