MLM Scheme Or MLM Star, The Difference

MLM Scheme - Your Money Is GoneSometimes it is not so easy to tell a good MLM program from an MLM scheme.  Funny, but in the past two years there have been a lot of ponzi or pyramid schemes in the online world.  Those based in the United States are usually shut down by the FTC but it may take a few years.  In the mean time, unknowing participants are shelling out anywhere from $100 to $100,000 to participate; often losing everything they have ever saved.

An MLM scheme does not have to be illegal, but may sound better than it actually is.  How do you know if a MLM program is worth your time and or money?

» Read more

Network Marketing: What You Don’t Know That You Don’t Know

Owen Satterlee at Disneyland

Owen Satterlee at Disneyland

I always wondered what secrets Network Marketing experts hold back.  What they do differently that makes them so successful.  Here is a partial list:

1. There is nothing you do not know except for how hard and or smart you need to work

It is all a numbers game and it looks something like this:

a. For every 1,000 people you contact, 10 may show an interest
b. For every 1,000 interested people, 10 may sign up
c. For every 1,000 signups, 100 – 200 will stay active
d. For every 1,000 active, 30 or so will be superstars

So it takes a lot of talking to people to get to a superstar.  You can improve your numbers by advertising or educating prospects online.

2. Your best distributors will be close to you.  If you know what you are doing, having a friend learn from you tends to produce a very good distributor.

3. Great remote distributors will call a lot and have good questions.

4. People will sign up, spend a lot, then quit.  Unfortunately these people are looking for a get rich quick scheme.

5. People sign up when they are ready, not when you are.  Keep things light and positive and you will get good results in time.

6. You may have a great distributor already in your downline.  He just might wake up in 20 years.

7. Quitting is the only way to fail.

8. You have to be successful in order to become successful.  How does this work?  Depending on how you find prospects, you will have to be professional, dress well, be well groomed, speak well, understand your products and business, and have confidence.  This is not about lying to the prospect.

9. You cannot tell a prospect what you make, good or bad.  Your results are not typical.  I would also make sure to set reasonable expectations.  For instance, telling people it is easy is probably not a good idea.  Telling people it is hard work but very straight forward might be better.

10. Be different.  If doing the same thing as others works for you, feel free.  If it does not, it might be a good idea to try something different, often.  Keep trying different things until you find something that works.  This is especially true in sales.  Selling the same way as others probably does not work.  In recruiting, we just try to reach a different audience from everyone else.

All you really have to do to be successful in Network Marketing is to create a process for recruiting and training distributors.  Keep working your plan and you will do great.

Marketing 101 For Small Businesses

Marketing is not simply the act of selling the product to a customer but is the definition and backbone of the total effort of the company.  Marketing defines the attributes of the customer and how the customer will be reached so that time and money are not wasted.  Marketing looks for the value added of the company that can be sold to the customer.  Marketing outlines the business flow of customers through various areas of the business.  Marketing can help determine the vision and direction of the company.

Good marketing is the difference between being miserable and disheartened, and being energized with a lot of activity.  You are selling to the right people who want to hear your message.  People are making their way through the marketing process, hearing the sales presentation, buying product or signing up as distributors.  Poor marketing practice is like cold-calling the phone book.  It’s beating your head against a brick wall and never getting anywhere.  If you are a new multi-level marketer, you have probably felt this way many times.

So how do you market well?  You need to find the right types of people for your product or opportunity.  Are you selling widgets?  Who uses widgets?  Do men or women usually buy widgets?  Are widgets purchased by everyone or just certain income levels?  Are people more likely to buy widgets in a certain part of the country or world?  Are office workers more likely to buy widgets than blue collar workers?  These are the kinds of questions you need to ask about your product in order to build a profile of your customer.

For a business opportunity that sells widgets, you probably want your customer for widgets plus a few other elements.  For instance, are store owners likely to want to sell widgets?  Are widgets best sold by personal sales people?  Does being a distributor for widgets offer a discount for purchases?  These questions can define which of your customers you may want to offer the opportunity to, or the kind of people you want to find for your opportunity.

The attributes of your potential customer or distributor is their demographic profile.  Demographics are subsets of the general population.  A given person usually fits within a group or several groups.  Perhaps your demographic profile describes only 10% of the population so 90% of the population typically would not be interested in what you are offering.  If you make your offer to the correct 10% of the population, not all will buy but they are considerably more likely to be interested.  This makes business fun, to be presenting to people who want to be presented to.

Marketing also defines your advertising methods, sales messages, and what values your business offers to your customers.  Marketing as a whole may be a process of trial and error, but once you find what works for you, you just do it over and over and bigger and bigger.  Larger companies try to get more precise with their marketing activities by doing a ton of research before ever delivering a product to market, but since we don’t have a major amount of resources or time, doing things small in a trial and error fashion works fine.

Similarities and Differences Between Small Business and MLM

A multi-level marketing distributorship typically is a small business run by a person, a couple, or a family. It can also be a larger distributorship run by a company with several employees. I have known distributorships to have revenues of several million dollars per year.

In a typical small business, a product is invented, manufactured, and or purchased, and can be sold to a customer or to another business. Similarly, a multi-level marketing distributorship purchases product or the product is purchased on behalf of a distributor from the company, then is sold to a customer. A distributor will recruit other distributors to sell the product, which is similar to finding other businesses to sell the product.

In a small business, you could have the product drop-shipped to your customer (which could be another business). Similarly, the typical multi-level marketing company allows the product to be sold from the MLM company directly to the consumer with the distributor getting the credit. Drop shipping typically allows a company of whichever kind to keep their inventories low or non-existent.

So we see that the typical small business and the typical MLM distributorship function in exactly the same way. They buy and sell products for a profit. They can sell to customers or other businesses. They can both keep their inventories low or they can stock to meet customer demand.

The main way MLM is different is that it earns commission on several levels of business to business sales, i.e. your downline or network. This gives you a great incentive to help out those you sponsor, those they sponsor, and sometimes those 10 levels below you. MLM is a helping business. Multi-level marketing is also the kind of business where you can build up income over time for a less than superhuman effort today. You leverage your efforts with independent business people rather than employees. The income you generate can take you through retirement and you can potentially leave it to your heirs.

Now a multi-level marketing distributorship is a business and it can get busy. Busyness is a good problem to have though.

What Do You Do with Distributors?

On my blog, I have discussed the methods used to attain distributors which I will quickly review here: People will become your distributor in their time not yours. You need to have the patience of a fisherman, otherwise you will scare the fish away! Your job is to support them during the process of consideration, give them what they need to make a good decision then stand back. Any pressure or hype will probably get you distributors that will do nothing.

Once you begin signing up distributors, your focus really switches to supporting them. You should give them encouragement, train them, and help them as much as they will allow you to. You should give the most help to your best and most trustworthy distributors, and you could go as far as building for them with them by your side if this is agreeable to them.

You do also want to train them on the product.  The product’s uses, features and benefits, and why a customer would want to buy it.  Make sure that the distributor buys for himself so that he or she can experience the benefits personally.  Ultimately you want customer sales but customer sales follow personal use.

That is mainly it. Of course you continue to gather leads and work with prospects all along for yourself but now you have the added work of supporting distributors. The added burden is not huge and is usually enjoyable. However, don’t frustrate yourself because somebody is not doing their part, just work with the ones who are.

Why Can’t I Sponsor?

Sponsoring is recruiting new distributors into the multi-level marketing company. Once a distributor is sponsored under you, you share in their sales success. They can also sponsor other distributors, which also contributes to your commissions.

It is nearly impossible for a new distributor to sponsor because they seek people from their warm market to join, like family members, friends, neighbors, and other people they know well. The problem with this is that given any individual person, the person is very unlikely to want to start a new business.

This is very depressing, isn’t it? The warm market you are depending on probably won’t want to join. It gets worse. Your warm market knows you and are unlikely to believe that what you have is incredible or even credible. After all, they’ve known you for a while and you are not the kind of person who can do this kind of thing. People outside of your warm market are actually more likely to join because they have no preconceived notion of who you are.

More bad news: Let’s say you contact one new random person a day, how long would it take you to sponsor a new distributor? In my experience, with a rapidly growing company, you generally could sponsor 1 in 100 people. That is a very general estimate and it may be easier or harder to sponsor based upon a lot of factors.

Even more bad news: Your one distributor is unlikely to produce. Typically 1 in 100 distributors will sell and sponsor, many will drop out and many will do very little.

So to get three producing distributors, as your sponsor says you need to be successful, you need to make contact with about 30,000 different people. You can see that the typical way people are recruited is a recipe for failure.

So how do you change the odds? By contacting random people you can expect the information above to be true. If you want to sponsor more of the people you contact, you have to contact the right people. Better yet, you need people to come to you. I will write more about this soon.