The Network Marketing of Agents of a World’s Top 500 Company
PreambleThe conflict between big industrial product enterprises and agents is often like this: The company has invested a large amount of money in marketing work, and has given nice sales leads to its agents in various regions, but the sales performance of the agents doesn’t get improved.Meanwhile, the agents often complain about insufficient marketing efforts of the company, very few and outdated sales leads, and unfair distribution of the leads. The large-sized ERP software company mentioned in this article has been training its agents to develop new customers by making use of network marketing technology at a small cost since 2012. Just as the saying goes, “Teaching a man to fish is more effective than giving him fish; on the other hand, giving a man a wish is more effective than teaching him to fish.”
Note: I used the term “a world’s top 500 company” instead of directly citing the company name because we are still in cooperation and are bound by a non-disclosure agreement. If we are going to mention the company name or its brand in this article, we need to apply for authorization from their public relations department. Considering it may take long and is very likely to be rejected, it’s better not mention it. But if I give two clues about this company, I believe many people will know which company we are talking about. Clue 1: it’s the world’s largest ERP software company; clue 2: 86% of the world’s top 500 companies use its products. For easy narration, we are going to call it SAX hereinafter (SAX also refers to saxophone. The name of the company we are talking about is only one letter different from that of this musical instrument. Since we cannot mention its name directly, we replaced its last letter with X).
Background
There were a variety of products in SAX. The R series products were targeted at large enterprises, while the A series aimed at medium-sized enterprises, and the B series at small-sized ones. Among them, the B series products enjoyed the largest customer group and the most agents, the number of whom had reached more than 400 in China (SAX divided them into three grades of gold, silver, and bronze according to their annual performance).Mily was the channel manager of SAX’s B series products. She needed to work with the marketing department of SAX to strengthen the promotion of B series products and increase the number of sales leads. Meanwhile, she was also required to distribute the leads to more than 400 agents. However, there were too many agents of B series products, so the supply was often less than the demand, which made all the agents complain. Under the stress, she formulated a new channel policy in 2012, that is, employing new technologies to help partners grow rapidly and develop their self-marketing capabilities. In order for that, she spent her spare time collecting a variety of new marketing materials in the library in the first half of 2012. It was just during that period of time (in June) that I had my book How to Get Orders in Traditional Industries Using the Internet published and put on shelves in major libraries. After reading and comparing other books regarding network marketing, Mily decided to work with me.
Organizational Structure
Case Description
1. The Establishment of the Plan
Mily was the channel manager of SAX’s B series products. When I worked with Mily at the very start, I intended to ride on the wave of SAX’s popularity—as it was the world’s top 500 company—and made it my biggest network marketing project. At least they could invest more capital and manpower to do network marketing than all of my previous customers, and we could set up a dedicated network marketing team in the channel department of B series products for operation. But after concrete investigation, I noticed that large companies also had their own inconvenience. They had to go through the procedures for everything, which was usually time-consuming and complex. For instance, if we wanted to promote product B, we were not allowed to build an independent website, and could only work on their official website. If I was going to post an article on the official website, I must get it reviewed by the marketing department and public relations department first, and then submit it to a third-party website service provider to add the content. It was laborious enough to post an article, let alone to apply for funding and personnel.
But Mily had a very good resource that could be fully utilized, which was the hundreds of agents of product B. They often asked Mily to provide more leads and more marketing skills for them. If they were taught advanced skills and supported to do network marketing, their sales performance would be boosted fast. The strategy of “give a man fish” was changed into “teach a man to fish”.
2. The Implementation of the Plan
The first round of supporting plan: If we provided training and guidance for all of the agents, we might achieve the effect of “teaching a man to fish”, but it came along with a large workload and a high cost. If we raised the goal to a higher level, that is, “giving a man a wish", the workload and cost would be reduced greatly and good results would be easier to achieve since we only need to support powerful agents. When seeing the excellent performance, other agents would also look forward to the same supporting opportunity. Based on this strategy, we sent training invitation letters to all the agents and asked dozens of them who responded positively to fill out a questionnaire concerning their basic situation. After that, we screened out seven agents with a certain knowledge of network marketing and started formal training. In September 2012, SAX held a 4-day internal network marketing training. According to the capacities of these agents absorbing information, I selected three agents and provided them with practical guidance concerning network marketing for three months. To encourage the three agents to take an active approach to invest in online ads, Mily promised that SAX would bear part of the advertising costs in the first month (50% of the total advertising costs the agents had paid could be reimbursed by SAX). Ever since October 8, 2012, the three agents from Beijing, Shanghai, and Guangzhou had launched a mass of ads on Baidu and achieved unexpectedly good results.
Graph: The graph above is provided by Baidu’s big data tool "Baidu Index", which can be consulted by everyone at any time. It is real and valid. Figure 8-2 shows the average weekly trend of the search volume of the three words "SAX”, “ERP”, and “ORACLE” on Baidu from 2011 to 2013. The three curves, from low to high, stand for SAX, ORACLE, and ERP in order. ORACLE refers to an ERP system and supporting hardware devices from Oracle Corporation. As ORACLE provides not only the ERP system but also hardware devices, its search volume is normally higher than that of SAX. And the major marketing campaigns held by the two giants every year will lead to the fluctuations of the three curves. The dots marked in the figure indicate that in the week following October 7, 2012, the search volume of SAX exceeded that of its competitor ORACLE for the first time (The bottom right corner of the figure shows the data in that week). During that period, SAX didn’t carry out any offline marketing activities. What’s more, they even stopped all online marketing activities in order to evaluate the effect of network marketing more accurately. The only reason that caused this fluctuation was the Baidu advertisements made by the three agents in Beijing, Shanghai, and Guangzhou.
It was also notable that the search volume of ERP during this period was quite low compared to the whole year as shown in the figure, which meant that the three dealers had successfully converted the limited ERP business resources into business needs for SAX through search engine advertisements. Three months later, SAX made an assessment of its product popularity, and product B, which used to be unknown, turned out to be the most noted SAX product on the Internet. During the 3-month promotion, the Beijing agent had signed orders of more than 4 million yuan, and the other two agents also made gains. This result startled all the agents of SAX.
The second round of supporting plan: Spurred by the impressive performance of the three agents, the other agents also asked for training and guidance. Therefore, SAX held three consecutive network marketing training sessions in Beijing, Shanghai, and Guangzhou from May to July 2013, with more than 50 enterprises participating. Compared with the first round of training, SAX had reduced its support efforts and no longer provided follow-up free guidance. But as network marketing had been recognized by many agents, they considered it a marketing method with the lowest cost and greatest efficiency. They reduced such activities as offline exhibitions, telemarketing, and conference marketing, and turned to online channels instead.
SAX brand protection period: Since 2015, SAX has no longer provided network marketing support for its agents, and in April 2016, it asked for brand protection on Baidu, which means that agents cannot launch any advertisements about SAX anymore. SAX brand protection period: Since 2015, SAX has no longer provided network marketing support for its agents, and in April 2016, it asked for brand protection on Baidu, which means that agents cannot launch any advertisements about SAX anymore. We can use one word to describe its move: weaning. But it didn’t impact the determination of the agents to expand their business on the Internet at all. The success the old agents had made through network marketing encouraged batches of new agents to step up. Up to now, search engine marketing is still recognized as a low-cost and fast-acting marketing channel.
Case Analysis
Seeing this, some of you may raise a question, “If SAX launched the Baidu ads by itself, wouldn’t it get the same effect?” In fact, SAX has been doing it all the time. But search engine advertising is different from traditional advertising. Baidu forbids a company to have more than one advertising account so as to prevent it from hogging all of Baidu’s advertising resources. That is to say, a company’s ad can only be shown once in the search results of a certain keyword, while there are 5 advertising positions on the first search result page of Baidu. For some highly competitive search terms such as “ERP system”, “ERP company” and “foreign trade software”, the probability of you being picked by customers is only 1/5. But the agents of the company are allowed to advertise the same product at the same time because they use different company names. Therefore, when searching for “foreign trade software”, we will find many advertisements for SAX products on the first page of Baidu search results.The second reason is that it is impossible for a large company to take into account all keywords, especially those in segmented areas and regions.But their agents at all levels are scattered all over the country, and they mainly focus on the business in their own regions and their areas of expertise. They would use more specific keywords such as “Shanghai ERP company” and “ERP company in the chemical industry”. No matter in terms of the ad bidding or ad creative, the agents are more professional than the company, and customers tend to choose the local agencies of SAX to negotiate business. These agents will also make use of their official websites and post a large amount of free information to improve their natural listings of keywords in niche regions and industrial areas. The point of doing so is that the websites of these agents will always be ranked at the top to attract new customers even during off-hours when no one is running advertisements.
Case Extension
The copies of the gold agents:As mentioned earlier, SAX company also divided the agents into various grades and ranks，the gold partners are the highest level of SAX agents, B products over the country also have several gold agents, they also respectively developed their own secondary agents. After having received the positive results，in order to create higher performance, they also adopted the original SAX support policy to cultivate their own secondary agents’ network marketing ability. In this way, there will be hundreds of SAX agents at all levels in the country to participate in network marketing promotion. As long as customers search for ERP-related information, there will be a lot of SAX information in the search results. These agents spread all over the country, in their respective areas of expertise and industry, launching of network marketing work. These agents’ networks seem to be dotted with information, but they’re starting a prairie fire,bringing SAX companies new customers every day.
Until now, I still am the agent of network marketing consultant. They no longer need the head office support of SAX, because they have achieved better sales performance. The income earned through search engine marketing is much higher than other marketing activities. On the one hand, they are using SAX, the world’s first brand, to do business. On the other hand, they are also improving the influence of SAX brand through their own publicity.
For more cases please refer to How to Use the Internet to Get Orders in Traditional Industries: Chapter six The classic cases of enterprise network marketing