Every week, we will seek out expert advice to help a small or medium-sized company overcome a key issue it is facing in its business.
In the seven years since Trish Ronan started her direct-selling company, she has managed to build its sales force at a steady clip.
Now, Toronto-based Enjo Canada Cleaning Inc., which sells chemical-free cleaning products through Tupperware- or Mary Kay-style home parties, has grown its sales force to 350 consultants, helping the firm reach an expected $4-million in sales this year – its best year ever, says Ms. Ronan, the company’s co-founder and chief executive officer.
However, the bulk of those sales agents, and the bulk of sales – 300 sellers and 85 per cent of sales – are in one province: Ontario.
Now Ms. Ronan wants to expand in a big way beyond the province, but isn’t sure how best to attack the building of a cross-Canada sales force.
Enjo Canada is a franchise of an Austrian-based business but Ms. Ronan runs it independently, buying products only from Enjo International.
Operating a business model similar to cosmetics company Mary Kay Inc. or storage container seller Tupperware Brands Corp., Enjo’s sales force puts on party demonstrations of its products for friends, family and acquaintances, drawing both product purchases and more sellers to the network.
Sales agents outside the province have joined the company as a result of connections in Ontario. It now has 32 sales consultants in Alberta, eight in New Brunswick, eight in British Columbia and two in Nova Scotia.
Ms. Ronen has ambitious plans to double the total number of agents to 700 over the next four years, with the majority of new additions located outside Ontario.
It’s a challenge to recruit elsewhere when she can’t physically be in other parts of Canada for extended periods, she says.
And agents need regular, face-to-face interaction to stay inspired, she adds.
So Ms. Ronan has set aside $50,000 to spend on expansion in Canada – concentrating first on the West – and wants to know how best to spend that money.
Should she hire a manager to look after Western Canada? Alternatively, should she put herself on the road for a cross-Canada marketing campaign to raise awareness of her products with both consumers and potential sales agents?
“We’re at this point in the business where we’re wondering, is there a smarter way to do things?”
The Challenge: How should Enjo make the best use of its $50,000 expansion budget?
Mark Healy, partner at Toronto-based Satov Consultants
Fifty-thousand dollars won’t buy a lot of advertising. She won’t be able to run much of a mass-media campaign on that.
She could spend that on hiring someone young and passionate. This strikes me as the project where you could find that person. A student of environmental science or someone with a business degree who has an environmental bent could work. They could be passionate about the cause for a year or two, and their salary certainly could be about $50,000. You won’t get an experienced sales person or manager. You need someone with a lot of get up and go.
Brock Smith, professor of marketing and entrepreneurship at the University of Victoria
Enjo should spend some of that money modifying their multilevel marketing strategies. They need to focus on finding sales people with greater access to targeted end users. For example, target students in sustainability clubs at universities and colleges across Canada who have greater access to people who care about the sustainability benefits of Enjo. [Talk to]people who lead environmental initiatives in elementary schools who have greater access to other parents who care about their kids’ health and safety.
She should also consider selling her product in specialty retail stores. Stores like The Good Planet Co. in Victoria specialize in selling products that deliver health and sustainability benefits across a wide range of product categories. Customers who shop at stores like this are already predisposed to being receptive to the benefits offered by Enjo. Enjo would give up some margin to sell through specialty retailers, but could significantly increase their sales volume.
Aaron Serruya, co-founder of Toronto-based Yogen Früz
She needs reps in every jurisdiction, so she should spend that money going the franchise route. Use the budget to develop a proper franchise website, recruit franchisees and advertise on different franchise websites.
We didn’t have the financial wherewithal to grow beyond our one store in Toronto. So we immediately looked at the franchise model. Now we have over 1,254 stores.
Yes, we’re retail, but there are so many service-oriented franchises out there – from cleaning guys and people who cut grass – so you don’t need a physical store to franchise.
THREE THINGS ENJO SHOULD DO NOW
Hire a regional manager
For the size of the expansion budget, hire a young, motivated leader with sales experience to head up a Western Canada division. Make sure the person is passionate about the environment and what Enjo is trying to do.
Target niche consumers
Reach out to specific groups of people -- such as environmental clubs -- who would be willing to try the product. Those people will spread the word among the like-minded.
Set up a franchise
Instead of being responsible for the entire country, find entrepreneurs who want a piece of the business, too. They'll run a franchise in local markets while you collect a percentage of sales.
Special to The Globe and Mail
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