How a Top-3 Network Marketing company achieved a +4% revenue increase due to Cotano
A story of an industry leader who broke the downward trend and made a breakthrough in 3 months
The long-established company, a pioneer in Network Marketing, historically demonstrated incredible growth year over year (YoY), but in the last decade, revenue growth slowed while the rest of the market steadily grew.
Unfortunately, due to the NDA, we are unable to indicate the Company Name or explicit numbers. However, you can imagine how things were going because the company was facing a dramatic increase in churn rate, reaching 40% with recurring customers.
The company’s executives tried to solve the problem as they did before by motivating salespeople and spending plenty of money on marketing incentives to motivate clients to make purchases. Despite all those attempts, the decline continued. It was clear that the only way to stop losing customers was to radically improve the retention process.
It was clear that the only way to stop losing customers was to radically improve the retention process.
Coaching made an impact, but managers realized that sharing knowledge was only half the battle. The final result depended on the practical application of this knowledge. Therefore, they started searching for a digital solution to track the field’s activity and optimize the sales process.
During their search, the company’s VP of Sales consulted with colleagues from the Network Marketing industry. One of them advised him to try Cotano and forwarded the product presentation. After a short negotiation, we started to pilot in several territories.
Managers enthusiastically accepted the idea as they were tired of manually managing the field sales. They motivated salespeople to attend the webinar and discover the brand-new tool.
However, after a week, only 1 out of 50 salespeople kept using Cotano. We started coaching and motivating salespeople to use our app, but that wasn’t working.
Fortunately, we still uncovered a way to engage the field sales (we will describe it in the next paragraph). Since then, we’ve been using this approach to achieve a 65%+ user retention (while the norm in the CRM industry is less than 25%).
The biggest obstacle was that salespeople wrote down prospects’ contact information with pen and paper or received it in Excel spreadsheets. Due to this, they had to spend hours, manually transferring the data into Cotano.
The biggest obstacle was that salespeople recorded prospects’ data with pen and paper or in Excel.
They pleaded us to create an easier way of moving data from Excel to Cotano. However, every salesperson managed the Excel tables in his or her own way, making it difficult to create a universal import tool.
Being a startup, at that moment, we didn’t have enough manpower to rapidly tackle such a task. We decided to add features that could motivate salespeople to use Cotano despite the challenge of transferring data. Unfortunately, that was a huge mistake...
We finally realized that we were acting like a typical CRM company - we forced our vision instead of listening to our users. We finally collected ourselves and went on a 24/7, type till you drop, SCRUM sprint, and presented a solution to the salespeople.
As salespeople were introduced to the solution that solves their biggest problem, the company experienced a 4X increase in user activity within the application. The app users began to share their experience with other's in the field, even with those who were outside the target regions.
Imagine how surprised we were when the number of users turned out to be 12X more than the number of salespeople involved in the pilot (300 pilot user turned into 3500 users!).
We didn’t stop there and continued to research. During the pilot, we constantly updated our app with releases, newly featured updates, and improvements, e.g.:
Due to these and other improvements, the number of weekly active users grew tenfold until the end of the pilot. This gave executives an opportunity to gather and analyze previously unattainable data, such as the number of prospects who hadn’t yet registered on the website.
At the end of the pilot, the users from the territories that used Cotano showed comparatively a much greater growth in Net Sales than the users from the control territories who did not use the application.
We then launched an anonymous questionnaire, to find out how salespeople themselves assess the contribution of Cotano towards the effectiveness of their work. Analysis of the responses indicated that 54.5% of users consider Cotano to be the main factor influencing their results.
As a next step, the company’s executives emphasized that Cotano, compared to the competitor CRMs, is the ultimate solution, not only for the territories where we ran the test but also for large markets with low field sales engagement.