Why home party businesses have a brilliant sales funnel (and the lessons your business could learn from them)

My wife was invited to one of those “home parties” today; the kind where a host invites friends to attend a party and a consultant is there to demonstrate and sell a product.

Tupperware is the well-known pioneer in this field, but others have joined the fray: Norwex, Epicure, Creative Memories, Partylite, Pampered Chef. There are others, but these are the ones my wife has attended in the past year or two. (Disclosure: I love Epicure’s Jamaican Jerk seasoning).

There’s a reason that there is a surge in the number of home party-based businesses: They work! They have an absolutely brilliant sales funnel that simply cannot be matched by any other sales method.

THE BRILLIANT HOME PARTY SALES FUNNEL
Here’s why these home party businesses have brilliant sales funnels:

First, the sales funnel is very simple: “Call a friend”. The rep calls friends and asks them to host a party. The host calls their friends to the party. That’s it. The business grows from there.

Second, the sales funnel grows organically: Let’s say the rep calls 5 people and 3 of them host a party with 7 people attending each one. The 21 total party-attenders not only buy but they are also invited (and incentivized) to host a party. If 2 people from each party say yes, that’s 6 more parties. If those 6 parties each have the same number of attendees, and each party has 2 people who are willing to host, that’s another 12 parties. And on it goes. The numbers really add up.

Third, the sales funnel seems extremely low-pressure: Reps aren’t “selling” or “pushing their products”. Instead, they’re just demonstrating something that is remarkable about the product (like how well it cleans, how tasty it makes food, how creative you can be with the scrapbooking products, etc.). Prospects — the ones sitting around the living room — are just sipping their coffee, connecting with acquaintances, and hearing some good advice. It seems like a great time to connect with friends. What can be lower-pressure than that?

Fourth, the sales funnel is in reality suprisingly high-pressure: Yes, it is high pressure even if the rep is a low-key, no-pressure individual. It’s high pressure because of the pressure of relationships. The attendees see other people buying. They want to make the host happy and they know the host gets a bonus if they reach a dollar threshold at the party. There is usually a discount or bonus if you buy at the party. The products are useful and the rep is usually someone just like the party’s attendees. Bottom line? All of the elements are present to compel a sale (even if the product isn’t necessarily needed).

WHAT CAN YOU LEARN FOR YOUR OWN SALES FUNNEL?

  • If you have a product that will work with a home party, give it a try.
  • Leverage the power of friendships and relationships (between your prospects and their peers) to sell more products or services.
  • Give discounts and bonuses to compel a sale (or more sales), especially if the buyer reaches a certain dollar threshold in the purchase
  • Eliminate as much of the pressure and pushiness of a sales as possible (while helping the Prospect to buy)
  • Offer a discount if the buyer becomes an evangelist by bringing someone else to you to buy your products or services
  • Remember that peer-to-peer word-of-mouth is the most credible purchase-inducing marketing you can possible have. If you can generate lots of word-of-mouth, you can forget all of your other marketing

Aaron Hoos

Aaron Hoos is a writer, strategist, and investor who builds and optimizes profitable sales funnels. He is the author of The Sales Funnel Bible and he's a real estate investor and a copywriter for real estate investors.

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