Fact One:  The cost of retention is cheaper than the cost of acquiring a new customer.  Research shows that even a 5 percent increase in retention rates boosts the value of a customer 25-85 percent across a range of industries.  This same study quotes the American Management Association statistics as saying that “it costs five times as much to attract a new customer as it does to keep an existing one.”

Fact Two:  The majority of distributors drops out in the first three months quite simply because they do not make money right away. They are gone before they ever have a chance to earn a commission check.  Though most direct sales/network marketing executives will not go on the record with such a statement, we routinely hear from them that 80% or more of new distributor recruits become inactive within the first 90 days of enrollment.

Fact Three: Distributors need to feel that they are making progress in order to stay loyal and interested.  The initial time period is crucial to whether a distributor stays in the business.  Without a feeling of benefit - either financial, product, or self-improvement - distributors don’t stay active.

Fact Four:  Most incentive companies are rewarding non-cash incentives to those top five percent who already earn the big checks.  They are missing out on the large “distributor middle-tier”.