How Tool Consolidation Reduces Costs, Drives Revenues, Reimagines Field Experience

Many of today’s large direct selling organizations are focused on becoming leaner and more agile. After mixed results following the past couple of business quarters, direct sellers will enter Q3 and Q4 of this year with the hope of driving stable growth quickly. For many, the clearest path to achieving this will involve cutting costs through tool consolidation among other strategies.

“By trimming expenses,” wrote the Wall Street Journal recently, “some finance chiefs are freeing up cash for growth plans, as they also false growing resistance to the fevered price increases that began with the pandemic.” Indeed, it is likely that for many of the direct sellers facing an uphill struggle, their growth problems stem from low- and middle-income earners who are less likely to buy consumer goods. 

On the distributor side, generally speaking, higher distributor attrition rates come from a combination of factors, like more competing opportunities in the gig economy, outdated distributor experience, and a low unemployment rate. At the same time, there are elements in companies’ earnings reports that are under their direct control, and expenses are one of those elements.  

Tool Consolidation and Digital Strategy

As companies focus on cost-cutting, a key question arises: what do we do about technology? The tools used by direct sellers, both at corporate headquarters and in the field, often come with high costs without delivering direct bottom-line value, making them easy targets for cuts. However, instead of eliminating tools from their tech stack entirely, direct sellers should consider reviewing their tech stacks from the standpoint of digital transformation.

One effective strategy for achieving cost efficiency is “tool consolidation.” This concept, once obscure, is now gaining traction as companies embark on a journey to optimize and consolidate their tech stacks. According to a recent CIO article, 95% of IT executives surveyed are planning to consolidate tech tools over the next 12 months. This strategy usually involves the following steps:

• Holistic tech assessment
• Vendor management and data integrations
• Cost efficiency and reduction
• Scalability and future-proofing
• Customized optimization plan

But what exactly is tool consolidation, and how does it work? It involves reevaluating your digital strategy to ensure your organization’s technological tools are integrated into a unified platform with data flowing freely and informing smart decision-making. This process typically involves collaboration with a CIO or other in-house digital strategists to centralize and streamline the technologies your company depends on, enhancing efficiency and reducing costs.

Two Impacts at Once: Cutting Costs and Boosting Revenue

When a company consolidates tools into, ideally, a single platform provided by a single vendor, this means saving on administrative costs, licensing fees, integration payments, and ongoing training and maintenance for manifold systems. Yet this is not only about saving. Tool consolidation also helps produce value. Among the myriad of the benefits tech stack optimization delivers the following benefits:

• Enhanced operational efficiency
• Cost savings and management
• Digital transformation and scalability
• Enhanced seller performance & experience

Imagine a distributor whose every tool is in one easy-to-use platform she can access from her mobile device. This naturally makes it easier to business-build, with less time spent switching between systems and a smaller learning curve – after all, she must only learn to become proficient in one system, with multiple branching tools contained under one umbrella. 

Another way to think about tool consolidation is that it has two sides, cost cutting and revenue boosting, effectively doing more with less. Tool consolidation cuts costs and creates efficiencies by consolidating tools under one platform, by requiring less distributor training on how to use multiple apps, and by demanding that the company juggle fewer tech vendors. 

Previously, multiple tools would have had to talk to each other, resulting in many impactful distributor actions getting lost in the shuffle, in addition to lost business-building time from their having to switch between apps. 

Now far fewer tools means that the distributor saves time (and HQ does too, by having to deal with ideally only one main vendor), but that her experience of that platform is even more richly personalized, so that each action she takes is as informed and specific to her as possible.

Lastly, one platform is easier to scale to other markets, essential at a moment when so many direct sellers are widening their global footprint, with the global market for direct selling projected to grow at a CAGR of 6.4% through 2030. One unified platform is also easier to secure against bad actors, vital now that, in our digitalized world, data security and cybersecurity have become necessary to organizational success. 

A Proven Solution: Real-World Data Supporting Tool Consolidation

Concrete data-based results bear out the truth that tool consolidation not only cuts costs but drives KPIs. For their latest Sales Force Report, Rallyware studied how tool consolidation affected their customers through data about their distributors in the field.  

Through extensive data analysis, Rallyware evaluated companies that started with only Learning & Development field tools under the Rallyware umbrella and then consolidated Sales Incentives tools with those. They found that this consolidation drove up to 26% more distributor engagement and a 30% growth in sales in the first six months after adoption of the Sales Incentives tools (along with the Learning & Development tools). 

Those companies that started with both sets of tools together, so that data flowed automatically between the tools from the beginning of their implementation onward, saw a 64.6% distributor retention rate for active users over the first six months, 5.3x more than the benchmark rate. This suggests that the consolidation of tools provides a more engaging and empowering distributor experience, which in turn makes the field more productive and proactive, and companies more profitable. 

Another reason for this increase in productivity, as mentioned, is the “deep personalization.” As each action the distributor takes becomes as personalized as possible, these actions become more contextually relevant and those more effective. For instance, if a distributor only had $150 left in her weekly goals to get bonus points, the platform might alert her about content to help her sell a particular product for which the company has a campaign right now, or which the platform knows specific customers would like. 

Overall, tool consolidation has proven an effective manner of cost-cutting for direct sellers. This is all well and good. But what is not talked about enough is that consolidation actually boosts revenue, digitally transforming – and modernizing – the distributor experience for direct selling companies, which in turn enables them to compete with the leading gig opportunity providers. 

At a time when so many direct sellers are seeking ways to seize an agile growth posture, they should consider tool consolidation, both reducing costs for a leaner organization and driving more revenue.  

Ready to see the benefits of tool consolidation in direct selling for yourself? Sign up for a demo and transform your distributor experience today!