Advertising in the MLM World

There are legal issues involved with advertising opportunities that you need to be aware of. There are often issues involved with using a company’s name, product name, and product likeness that you also need to be aware of. At this point, I am not going to go into detail about what you can and cannot do or can and cannot say, but I will say that your company probably has published rules or approved advertising. Bigger upline organizations will also be well aware of company rules and can help you out when and if you want to advertise.

You can choose to promote your product or opportunity in advertising by avoiding the company name (i.e. Amway) and such, but you do have to be aware of the laws involved with advertising. I personally feel comfortable with an advertisement if I am telling the truth and am giving the reader realistic expectations. I have seen bigger business people fail the second test and get in trouble. I mean, sure you can make $1 million a month, but nearly all distributors will fall short of this amount. Even using possible, i.e. $1 million a month possible, does not let you off the hook for setting high expectations. Even if you quote your own commissions, you may still be setting unreasonable expectations so be careful.

For an advertisement to be successful, there has to be something delivered or desired in return for the effort to respond to the advertisement. Free information is ok to use, but free information about what? Free information containing secrets about multi-level marketing. That is more substantial. But do you actually have secrets about MLM that others do not know? Again, we do not want to create unfulfilled expectations.

An important part of advertising is filtering. We not only want to attract people interested in the opportunity, we also want to filter out people who will waste our time, sign up and do nothing, or generally be a problem for us. Setting reasonable expectations helps, but we need to craft our advertisement to attract good people while avoiding others. For instance: Easy money in MLM. Make money while watching TV. This would not be good. Try this instead: Hard work in MLM is rewarded. Free report.

Your follow up information must fulfill your advertisement and generally should be a presentation for your product or opportunity. You could use a two step approach, giving a bigger advertisement on the first mailing, then delivering the presentation on the second. You could also do a one step or two step with a personal presentation at the end. Because the presentation is going to be specific to the company or the company’s product, you should use the company’s materials or have your materials approved by the company. A cover letter on letterhead is generally ok, but anything that goes into detail should be company approved.

I am going a little long with this blog and there is so much more I want to say about advertising. I guess we will have to continue tomorrow.

About Demographics

Demographics is a description of a subset of the population. For instance: Men, older than 60, that own their own home. If this is the demographic of your market, then this is who you want to seek in order to sell your product. Not that you will sell your product to all men older than 60 who own their own home, but that you will have an advantage with this group of people to where you will sell more to them as a percentage than the general population.

This is how you change the odds more in your favor. You define the kind of person who would want to buy your product and then you find people like that to sell your product to. Rather than selling 1 in 100 people, you may sell 1 in 10 (as an example). Plus your product will captivate the interest of your target market more than the general population so your feedback will not be so negative.

How do you define the demographic for your product? Let’s take an easier example, say you sell toys. Who is your target market? It could be children that are the right age to want the toy. Probably either a boy or girl. Let’s think about this a bit more though – do children this age have the money to buy toys? If not, perhaps you are looking for their parents. So you demographic may be parents of boys between 8 and 12. You can do the same with virtually any product.

So then how do you find your target market? There are many ways that are only limited by your imagination. Remember that starting out we want to try to avoid spending money as much as possible. So perhaps we can make a list of everyone we know and call them one by one (cold calling your warm market), which sucks but stay with me a second. Rather than asking them if you can make a sales presentation to them or talking about business, maybe you just ask them if they know anybody who has children around 10. Make a list of these people then contact them. Again, rather than specifically selling these people, let them know who you were referred by and ask them if they know anybody else who has children around 10 that are shopping for toys for Christmas (or something similar). Often they will refer more people or talk to you about your product. The idea is not to hard sell but to make contacts, get them information, and get referrals. Sales come from warm leads (people who show a strong interest in your product) not from pressuring people to buy stuff they don’t want or need.

The important thing in finding your market is to ask for what you want.

How do you sponsor then using these techniques? You must first define the marketing for your business opportunity. Perhaps they will be women in their 30’s that want to make a little extra money. Or they may be your best product customers who want to save a little by buying from themselves. Or they could be people who have expressed an interest in being a business person. Use your imagination, there are many possibilities. You may also be able to refine your market once you begin working your business.

From there we find members of our market, get them information if they are interested, and get referrals.

Please note that calling people and getting referrals is only one method of finding members of your market. You can use your imagination and find other free ways to make contact with people within your market demographic. For instance, I used to post coupons on the bulletin board at the grocery store. You can also advertise for free on line using classifieds. Make sure to ask for what you want.

I will write more about how to advertise effectively with and without spending money in future posts.

Reasons To Do Multi-Level

I have probably spooked you into believing that it really isn’t worth it to do multi-level marketing. The main reasons to join a multi-level marketing company and work so hard is that you can make a lot of money and become financially independent. That is not to say that everyone who does multi-level marketing is wildly successful because they aren’t. You really have to know what you’re doing. But if you do know what to do you can make a ton of cash.

We had a total group of around 350 distributors and made between $14,000 and $20,000 in monthly commissions for two full years. That is what multi-level marketing can do for you. Unfortunately, we were working with a dietary supplement company that had the #1 product in the 1990’s, but in 1999 imploded because of issues with the health of its users, lying to the FDA, and getting a lot of bad press. I am not going to mention the company’s name but if you know the industry you can probably figure it out.

Our group was about 50% dropouts who never did anything, 45% small salespeople who sold a little product, and the rest hard-working sales people who could both sell and sponsor. We probably had three big fish who could really sponsor. We were part of the distributor advisory board for the multi-level marketing company and met people who did over $1 million per month in commissions, so we were not the largest by far. So the company had really, really big distributors and really, really little distributors (and dropouts), despite the major success of the product.

So how do you go from being the little guy to being the big fish? You find what works and you do it over and over, and bigger and bigger. Spending money is out of the question when you first start, but money can give you leverage to grow larger quickly once you have gotten to a certain level. You just don’t want to spend it foolishly, and spending it on big unproven advertising campaigns is always out of the question. I will post more about advertising in the future, but for now, spending money on advertising is out of the question when you are just starting. In fact, spending money on anything that you can do for free is out of the question.

Back to the multi-level marketing company for a minute. The company’s product was great, but the company’s business practices and attitudes caused them to run afoul of the media and the government, and ultimately their customers and distributors turned on them. This is sometimes what happens with a quickly growing company. They don’t know how to handle the growth and end up destroying themselves. This is not a good situation when you are depending on them for all of your income. Sometimes going with the tried and true is a better idea.

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.

How Do I Make Money?

You may think that you make money in multi-level marketing by signing up 3 people (or so) and teaching them to do the same. Then, when your downline becomes so big you earn big money. Well no. You earn money when product is sold by you and or your downline.

We had a past distributor who joined a new company who cannot sponsor but sells like crazy. She makes the most money in the company. Other distributors that we know make money without direct sales by buying product for themselves, then teaching their downline to do the same thing.

In our past life we both sold like crazy and sponsored like crazy, but we still made the majority of our money from sponsoring through our downline product sales because we spent so much of our direct sales profits on promotional material.

You will make money in multi-level marketing when product is sold. Hopefully your product is in demand. How do you know? Are you willing to buy the product with no hope of making money from the business? If not, I would look elsewhere.

However, don’t give up so easily… It may be that your product is worth buying but perhaps you just don’t understand why at this point. Spend time studying and using your product. Figure out why you would want to buy it. Is it better? Is it less expensive to use? What are the features and benefits of using the product? ¬†The answers to these questions can lead to better overall sales by helping you ¬†inform your distributors and customers about how the product will benefit them.

Multi-Level Marketing Is A Scam?

Actually, multi-level marketing is not a scam as long as distributors are earning commissions based on product sales and not on just signing up new distributors. Multi-level marketing is not a pyramid scheme either as a typical downline does not resemble a pyramid anymore than a tree does. Even if it did resemble a pyramid it would not be a pyramid scheme as ponzi schemes (another name for pyramid schemes) tend to take money from people under false pretenses to give to other people. A legitimate multi-level marketing company provides a valued product in return for money, so there is no loss to the purchaser.

Below is a Wikipedia article on multi-level marketing for more information:

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