Factors Influencing the Attraction and Retention of Multi-Level Marketing Distributors in South Africa
Date
2014-02-17
Authors
Mashaba, Thuthuka
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Abstract
Sustained distributor growth that consistently achieves product sales and stated revenue objectives is the lifeblood of Multi-Level Marketing (MLM) organisations (Legara, Monterola, Juanico, Linton-Palima & Saloma, 2008). This is due to the various roles and functions that MLM distributors perform within MLM organisations (Alturas, 2003) such as, sales generation, recruiting of more distributors; new distributor training, distributor motivation, and order control (Msweli-Mbanga & Sargeant, 2001). MLM distributor attraction and retention are therefore of fundamental importance to MLM organisations.
In light of this, the purpose of this study is to provide insight into the factors influencing the attraction, participation and retention of these MLM distributors in South Africa. A research questionnaire was constructed based on the available literature and was primarily distributed electronically. Of the 238 responses obtained, 183 were accepted as valid and the collected data was then subjected to various quantitative analyses with exploratory factor analysis being the technique selected for identifying factors influencing distributor attraction and participation. T tests and effect size analyses were then employed over and above factor analysis as secondary techniques in order to identify the factors influencing distributor retention.
The results showed that factors pertaining to career and personal development, industry attractiveness and time flexibility, and income generation opportunities were the factors influencing distributor attraction into the MLM industry. Once engaged with the industry as a whole, potential distributors decided to participate in specific MLM organisations due to the factors pertaining to company image and success, the product affiliation of the potential distributors, and the outcomes of the distributors’ own investigations.
Once successfully recruited, the study revealed the factors influencing distributor retention to be the distributors’ views of the marketing mix, distributor development and company performance, the network and sales growth
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achieved, satisfaction with income, product usage and entrepreneurship, valuing of relationships, and the organisational support received.
The underlying key findings for this research being that MLM organisations must be collective custodians of the industry as a whole. They must seek out and address any negative sentiments regarding the industry and positioning the industry favourably in the eyes of the broader public in order to ensure the MLM industry is attractive to potential distributors. In addition, MLM organisations must individually look internally to ensure they are configured for success. This implies developing and acting on approaches to attracting high numbers of quality distributors to their organisations through the understanding of the factors that these potential distributors consider to be important. This should be supplemented by integrated distributor retention strategies to allow the MLM organisations to consistently achieve their desired product sales and revenue objectives
Description
MBA thesis
Keywords
Multi-level marketing, Sales and selling, Marketing