Thousands of people join MLM programs, otherwise known as multi-level marketing based business, everyday. The purpose of this guide is to provide a step-by-step procedure for starting, operating an MLM … without making serious mistakes along the way. This guide will show you a quick and easy way to succeed in your network marketing business, while giving you some tips and showing you some traps to avoid.
Primary Causes of Failure in MLM
Multi-Level Marketing (MLM} is an explosive growth opportunity and it is here to stay, whether you like it or not!
Let’s analyze some MLM facts. There may be thousands of MLM companies. Some of these are real MLM companies, while most of them are not. Many people have become wealthy in MLM, but about 97% of the would-be MLM’ers never make it! Therefore, before we go blindly into MLM, let’s analyze why a huge percentage of would-be MLM’ers do not survive. Then let’s see how we can minimize or eliminate the problems.
The problem can be broken down into three categories:
- Difficulty in Recruiting New Members.
- Inability To Keep the Program Going. It runs out of gas and dies a natural death.
- Problems in the MLM Company Itself
It’s either you can’t get off the ground, you can’t keep it going, or the MLM company itself goes insolvent.
Why New MLM’ers Have Difficulty Recruiting New Members
1. The MLM Absurdity
In MLM, there is a paradox that causes major confusion that must be understood and dealt with. By law, MLM companies cannot advertise the MLM moneymaking opportunity as the main reason for joining the program. It is illegal to promote an MLM company if distributors are signed up for the sole purpose of earning profits without paying attention to the usefulness of the product or service. They must emphasize their products and services; monetary benefits are treated only as a nice extra incentive. Doing the reverse would mean opening themselves to a lot of attacks from local, state and federal government officials. Therefore, they must be extremely careful about what their literature, advertising and promotional material states, what they say in conferences, seminars, etc.
All MLM’ers are aware of this absurdity. Everyone knows that the real reason most people get involved with MLM is for the income-generating opportunity! Yet, the MLM literature and the MLM distributor cannot tell you this directly without crossing over the thin fine line of being illegal.
At this instance, what does a new MLM distributor do? No one tells him how to recruit new members. He is left to harness his own ingenuity and go out and promote the company’s products and explain the “great” opportunity on the side. Where does this leave the new MLM distributor?
Most often or it may have become standard to MLM endeavor to have two separate processes. First, they create a lead generating method by advertising the opportunity by itself. This is where we see those big and small ads that offer all opportunities but never tell us what they are. You automatically become a “hot lead” anytime you answered any of these ads. Note that the ad never mentions the MLM company. Rather, the ads are solely designed for lead generation, and for presenting a glimpse of the MLM opportunity. Company literature, brochures, guidelines, etc. will be presented separately when you answer the ads. That makes lead generation, the MLM opportunity and the MLM company distinct from each other.
The rule for MLM’ers is this: don’t attempt to promote and advertise a particular MLM company’s opportunity and explain the product or service in one advertisement as this is in direct conflict with the MLM company’s guidelines. Instead, find people who have a sincere interest in MLM opportunities, and then send to him the entire official MLM package.
2. Complicated MLM Concepts
When potential distributors are exposed to their first MLM opportunity, the complexity and newness of MLM concepts and terms sometimes overpower them. They can easily get confused with the terminology and jargon of network marketing, such as “Network, Downline, Upline, Organization, Levels, Etc.” Moreover, the specific MLM plan that is being presented is always anything but simple.
Then there is of course the ever-present suspicion. Is this a pyramid scheme? Is the MLM program legal? They have probably never heard of the MLM company; putting the program’s credibility and reliability at serious risk. Some people will even find it hard to believe the kind of money being discussed. And on and on. So what happens? In most cases, nothing! They simply don’t sign up!
Be highly selective! Join an MLM company with a solid experience and clean background as it will infinitely make recruiting downlines much easier. Don’t try to sell your MLM program to just about everyone. Instead, spend your time selectively by writing, or phoning people who you think might be interested in business opportunities. Then explain the program thoroughly and as simple as possible.
3. Potential MLM Member Can’t Decide Which MLM Company to Join
Put yourself in his shoes. If he has been investigating MLM companies, he is sure to be confused with all those offers and different companies! If he can’t decide, he just doesn’t sign up with any MLM company! Does he?
There are literally thousands and thousands of MLM distributors who will jump at the chance to tell you which companies you should get into and promote. If you want more “advice”, there are many books written by “experts.” Understand one thing, though. Every book and magazine article that you read and everyone that you talk to will almost assuredly have a “vested interest.” Pure and simple, their goal will be to get you to sign up in their program!
These “experts” will be quick to explain that there are “golden rules” and guidelines to follow. Some will tell you to stay away from “ground floor” opportunities since they are too risky. Others will explain that this is where the big money is. Some will explain why matrix MLM programs are better than others – and visa versa. Some will adamantly advise you to be active in only one MLM company – “be loyal” is their motto. Others try to sign you up in multiple companies. Still others have put together “Downline Building Teams,” and will invite you to join them. They will do all the work (you simply send them money). With all this “good” advise, how do you know which one is correct?
One thing I noticed about all these “good” advice sources is that they never ask me what my goals are or what is it that I want. How can someone give me advice before he or she understands what my objectives are? I would want these experts to ask me the following questions – “What is it that you really want? When? How much can you afford to spend? How much risk are you willing to take? What MLM programs and products do you like?”
4. No Upline Support
Once a person joins into a new MLM program, he needs support, guidance and information. In many cases, however, a new recruit’s upline fails to actively help and provide the needed support. This happens when the upline sponsors too many people all at once, or has no regard for his or her recruit’s success. In most standard MLM programs, it is important that the new marketer gets immediate assistance from a local person in the form of meetings or consultations. Otherwise the new recruit’s chances for survival are slim to none.
However, new MLM’ers should also strive to succeed on their own, with minimal or no help from the recruiter. If I sponsor you, and I die tomorrow, where does that leave you? If you are completely dependent upon by ability to help you, then you would be in big trouble. Right? Depend more on your lead generating “system” instead of your upline personnel. One strategy will be to buy some leads from your upline if you need them, and sell surplus ones to your downline. You can then survive with or without your upline. In that way, any help that you get from your upline is “gravy”.
Another word of caution: be wary of “Downline Building” companies. They will provide you with recruits, but you could wind up paying as much as $100 to $200 for each person that they arrange to be sponsored for you.
5. New MLM’ers Cannot Sell
This is probably the major reason most people don’t make it in MLM. By using standard MLM techniques, you have to sell and learn how to speak at opportunity meetings and the like. Constantly find new markets for your products. Use the Internet to promote your product, find new customers and sign up new recruits.
Use the Mail-order offerings to earn profits while you are promoting MLM opportunities.
Don’t attempt the conventional MLM methods of selling by mail. Since these methods are attempted by thousands of other distributors in the same company, they generally are ineffective and very costly.
Beware of MLM company whose products could only be promoted through expensive methods. There are some programs that will require you to sell, or to speak and conduct large opportunity meetings. If the new marketer is not a good public speaker (and a lot of people are not), then expect this MLM program to die on the vine.
6. MLM’ers Cannot Generate Good Leads
Next to the selling problem, this has to be the next biggest reason most people fail in MLM. Let me paint you a picture of what normally happens. The new person has just signed up in an exciting MLM program. Using manuals, consultations and so forth, the new marketer is taught how he should “share” the product with his friends, neighbors and relatives. However, a lot of people are not comfortable with this. He just doesn’t want to “impose” on his friends! He would feel a lot more comfortable just presenting his opportunity to strangers. But to whom? Unless his upline sponsor can get to him immediately, this guy is sure to be a fatality!
Explain this program to a couple close friends and propose a business venture that you and they will do some local advertising. That way, you can sign up your friends and will generate a lot of fast leads.
DON’T procrastinate! You may have a wonderful opportunity, but if you don’t take action, you will be “dead in the water.”
7. There is No True Duplicative System
Follow up with your first level of people. You can do this by letter or phone. If you have signed up someone who is not active, replace him with someone new (hopefully better). Make sure that you keep all your first level people alive and active.
There are times that you may feel obligated to do your downline’s work, if you think that they are not performing as you expected. Look, your job is fairly simple. Your only other job is to try to generate a few surplus leads that you can pass (sell) on to your downline. That’s pretty much it. If your downline can’t follow suit, don’t waste time with him! Your objective is to have an active first level of people. They may only be few, but they should be performing!
8. MLM’ers Sell By Mail Using Standard MLM Techniques
You can start and operate a profitable mail-order business while generating MLM leads. Run your “core” business like a mail-order business instead of a MLM business. Promote your mail-order business locally first, and then expand it nationally if you like. That way, you keep your up front cost down and you get fast results.
Unless the MLM company has a proven mail-order method (and that’s very unlikely), never, never attempt to promote the MLM program by mail using standard MLM techniques. It’s way too expensive, too competitive, and it is not duplicative.
9. MLM’ers Not “Sure” About MLM Company or Service
Often, a person will “sign up” in a MLM program in a “fit of excitement.” After the dust clears, he comes down to earth and reality slowly sets in. He then starts having doubts about the company, the product or service and his own ability to promote it.
If he has enrolled in a program that is not well established, he may have some well-founded fears. If the company is not at least two years old, things can get very shaky very quickly. The slightest amount of financial problems or bad press can break this company over night. Therefore, it is of utmost importance for the new MLM’er to align himself with a solid company, quality products and services!
Pick an established, financially sound MLM company that is at least two years old with unquestionable products or services. That way, you can feel good about the company and products that you are promoting. There is nothing quite like being able to “tell the complete truth” to your prospective customers.
Don’t select a MLM just because you are “in love” with the product. Put your emphasis on the business, the money making potential, and your capability to promote it.
10. New MLM’er Does Not Stick with the Program Long Enough
Starting any company takes time, and this is true with MLM as well. Between the time you study the program, write and receive literature, think of promotional campaigns, recruit downlines, and earn your first income from the program – you have to realize that the whole program takes time! And then your organization has to take time to grow. And on and on. The point is, it will take several months before you can expect much of anything to happen. If you believe in the program and its potentials, good business sense dictates that you make the commitment to stick with it for at least one year!
Use the mail-order promotions to earn money during the interim time. That way, you are earning extra profits and generating a lot of surplus leads to help your downline. Don’t spend all your initial promotional money on one thing and all at once. As the old adage goes, don’t lay your eggs all on one basket. Do a little testing. Spread it out and find out what works best for you. If you “blow it” all in one big shot, and it doesn’t work, then what?
11. Your MLM Company Gets into Serious Trouble
This is a scenario that can very much happen, so every MLM’er should be prepared for it. MLM companies, whether “good” or “bad”, can get into financial problems, get bad “press,” or experience management problems, etc. Anything can happen, and if you are one of the unlucky ones to be promoting this company, you could quickly become another MLM fatality. Particularly, if you are promoting only this one MLM company.
The key is to diversify! While MLM offers many wonderful opportunities, it is a very volatile industry. The risks its presents, however, does not preclude us from participating and reaping the rewards (if you are lucky). Join several MLM companies for less than $200 per month (not those requiring you to invest in several thousand dollars in one MLM company) to diversify your risks and still enjoy the benefits. MLM companies may not be perfect; and some may go ‘belly up.” But not all at once! Worst case, you will be in a MLM company at least a few months or years before they get into trouble. Now tell me you won’t have made a profit even with that company!
Sponsor your first level quickly. That way, your income will more than cover your costs. Then show your first level how to do the same. That way, you earn profits quickly and stay ahead of the game.
Don’t be an MLM “junkie” without a plan. Diversifying with a good coherent plan is one thing, but just buying into a lot of MLM companies is a “no-no.” But yet, did you know that they are many people that buy into dozens of MLM programs without promoting any of them? That way, they get tons of leads, and your downline pays you so much for a block of advertising, and builds automatically.
After you become successful, you may want to work closer with the individual MLM companies that you are promoting. All these companies have “grand” ways that they want you to use and teach. Beware! Don’t forget the method that you used to succeed. Stick to the system that worked for you. If you want to become active in speaking engagements, opportunity meetings and the like, then that’s another story. But don’t get caught up in the glamour and tinsel that could mislead you after you have become a highly sought speaker!
Recommended Books on MLM or Network Marketing:
- Your First Year in Network Marketing: Overcome Your Fears, Experience Success, and Achieve Your Dreams!
- Be a Network Marketing Superstar: The One Book You Need to Make More Money Than You Ever Thought Possible
- How to Sell Network Marketing Without Fear, Anxiety or Losing Your Friends! (Selling from the Soul. Ancient Wisdoms. Modern Practice)
- How to Become Filthy, Stinking Rich Through Network Marketing: Without Alienating Friends and Family
- Guerrilla Multilevel Marketing: 100 Free and Low-Cost Ways to Get More Network Marketing Leads
- The Ultimate Guide to Network Marketing: 37 Top Network Marketing Income-Earners Share Their Most Preciously-Guarded Secrets to Building Extreme Wealth
- Pros and Cons of Financing a Business
- 12-Step Template to Write an Effective Sales Letter
- The Enthusiastic Employee: 16 Myths on Employee and Performance Management
- How to Raise Money to Finance a Franchise
- How to Create an Effective Marketing Plan