Another MLM Secret Exposed

I was preparing my notes for a class that I am going to be teaching next week and it reminded my of an important MLM secret – training your downline.  If you want to have a successful network marketing business you have to pass on some of your knowledge to the people that are helping you to grow that business, your downline. 

This may not sit too well with some of the network marketers out there because they were taught to just bring in the people and the MLM company will take care of the training.  The problem is that most MLM companies (even the top MLM companies) don’t provide the kind of training that is needed to make a six figure income. 

The majority of the MLM network marketing training provided is only designed to get you STARTED in your business.  You may make a few sales using their techniques but for the most part, you won’t be able to quit your day job.  Here are some of the techniques that are currently taught by almost all MLM companies:

  • Make a list of your friends and family and show them what you are doing.  This network marketing tool is usually good for signing up 1-3 people into your business.
  • Three foot rule (talk to everyone within earshot of yourself).  This network marketing tool usually helps you to develop your 30 second introduction speech but it’s pretty rare that anyone will sign up from it.
  • Hand out CD, DVD, or brochures that you have to purchase from your MLM company.  This network marketing tool puts a lot of money in your company’s pocket but vary rarely puts any in yours.
  • Pass out flyers, business cards, or sizzle cards to everyone, put them on cars, leave them in books at the library, etc.  This network marketing tool usually only gets one person to call your number, the security guard at the mall telling you to stop putting your trash on people’s cars.
  • Buy expensive opportunity seeking leads and call them on the phone.  I personally spent thousands of dollars using this network marketing secret and managed to sign up a couple of people but it didn’t justify the expense of the leads.

The thing is that these network marketing tools work great for the MLM company but don’t usually work for the individual distributor. So if you want to be successful in your network marketing business you have to teach your downline the real network marketing secrets that actually help people to sell their network marketing product.  That’s right the product, not the business.

Let’s put it like this.  Would you buy a franchise from someone that couldn’t or wouldn’t show you how to sell your product?  Of course you wouldn’t, that would be silly.  So why are we taught to sell our business and not our product?  Oh, but I digress.  This is supposed to be about teaching your downline.

So, what do you teach your downline?

You don’t have to try to teach them everything all at once.  Start off with the basics:

  • Teach them who their target market is.  That way they won’t be wasting time talking to the wrong people.
  • Teach them where to get leads.  If you are really nice, you may even want to give them some of your leads so that they can get started right away.
  • Give them your prospecting script and role play it with them.
  • Give them access to the presentation that you are using to bring in new customers.
  • Give them your closing script and role play it with them.

If you give your downline access to the things that are working for you, they will feel like they have a partner in their network marketing business and want to work harder.  Make yourself available to your people and they will reward you.

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Amy Howard, October 7th 2009 | Tags: , , ,
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Entrepreneur Tips From The Shark Tank

I watched Shark Tank last night and picked up a few entrepreneurial tips that I thought I would share with my fellow network marketers.  I don’t normally work on Sundays but that’s when the show was on and I do like the show.

Entrepreneur Tips from Kwame

The first guy up was from West Africa, Kwame Kuadey,  who grew up in such poor conditions that I can only imagine.  Of course, if you don’t know any better are you really missing out?  Kwame lost his job recently and was up before the sharks asking for $150,000 so that he could get his home based business off the ground.

Kwame’s company Gift Card Rescue.   Gift Card Rescue buys unused gift cards from consumers and resells the cards at a lower value.  Here is what I got from Kwame to take and use in business today or in the future:

Don’t let your past dictate your future.  Kwame grew up even poorer than I did but from what I could see, he doesn’t let anything stand in his way from getting what he wants. 

Use the bad economy in your favor.  Here is what I loved best about Kwame’s idea.  Not only does he help people to make money by selling their unused gift cards but he also helps people who want to purchase gift cards to save money.  I didn’t realize that there were so many gift cards purchased and a good percentage of those bought never get used.

From an environmental standpoint, I think his idea is also a winner – a business model that helps keep items from going to the landfill is okay in my book.

Apparently, I wasn’t the only one that saw some great characteristics of an entreprenuer in Kwame.  He came in asking for $150,000 for a 30% stake in his company and left with $200,000 and two sharks, Robert Herjavek and Keven O’Leary, to help his reach his full business potential and he only had to give up 50% of his company. 

Entrepreneurial Tips from Gina

Second up in the tank was Gina Controneo.  Gina’s mission is to spread positive messages to the world with your line of gifts and accessories.   Here is what I got from Gina:

Don’t let your passion for something cloud your business judgment.  It’s one thing to be passionate about what you are doing and to get joy from it but if you are in business for yourself, you also have to be realistic.   One thing that I noticed about Gina is that her passion is so great for what she does that even when she gave herself some boundaries, she ignored them.  She said on the show that at her last trade show if she didn’t make a profit selling her items, that she would stop putting more money into her business and move on but she managed to talk herself into keeping it up no matter the cost.

After looking at Gina’s line of product, none of the sharks wanted in.  The numbers just didn’t add up.  They thought she had a good idea but didn’t think it would make any real money. 

Entrepreneurial Tips from Dan

Next up was Dan Claffey with Coffee Brand Gifts. Dan is hoping to use people’s love of coffee to sell his products.  Here is what I got from Dan:

Check to see if you can trademark terms that you thought were already trademarked.  Dan was able to trademark terms like; espresso, java, and latte.  I would have thought those terms would have already been taken.

Ask for the sale.  Dan made a huge mistake in that he hasn’t gotten any written commitments from anyone to buy his products.  His thinking is that he will make the products first and then sell them.  And while I think that having all of your ducks in a row is a good thing, if no one buys your product after you have spent a ton of money making them, you will be left with a house full of teddy bears that no one wants.

One thing that I have learned in network marketing is that you don’t have to have everything perfect before you launch your business.  Make sure that you have a market that wants your product before you spend all of your time and money making everything perfect.

The sharks didn’t bite and Dan left without a deal.  I had a question for Dan.  It’s been my experience that the majority of people that drink coffee are adults.  How many adults really want a teddy bear with the word “Java” on it’s belly?

Entrepreneurial Tips from Amy and Allison

The last entrepreneurial tip that I got from the show was from Allison Costa and Amy Feldman.  And that was to get a patent on your product if possible.  They had a really good idea that I think will become a standard item to buy for anyone that buys a playpen for their kids.  They call it CoverPlay and it is a slip cover for playpens (I noticed that they call them play yards now.  Did some kid get offended about being put into a pen?  Just wondering.) 

The ladies went with Barbara Corcoran who offered a deal of $350,000 for 40% stake in the company.  I think they wanted to work with Barbara even before they stepped into the room and would have taken any deal that she offered.

That’s it for last night’s Shark Tank, I hope you got some good tips that you can use for your home based business to make it as successful as you want it to be.  If you would like to see the show for yourself you can catch it on ABC Sunday nights at 9pm ET.

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Amy Howard, August 31st 2009 | Tags: , , , ,
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How Top MLM Companies Make Their Money

Let’s face it, businesses are in it for the money.  They may provide a great product or service but no one wants to work for free.  How do the top MLM companies make their money?

Grocery stores make money by selling groceries.  The more people that come in to buy their groceries, the more influence they have over what people purchase, and the demographics of their shoppers will dictate the amount of money the store owner makes.

Multi Level Marketing Businesses are basically the same.  The more people that come to buy their product or service, the quality of those people (the demographics) and the influence that they have over their audience will determine their profitability.

That’s why your MLM company can make a killing in this industry.  They get you to join the MLM business opportunity with the idea that you can make money from home and then they influence you to buy more and more of their product or service and share it with everyone so that you have to buy even more of their product.

What Do The Numbers Tell Us

Let’s take a quick look at some facts about the network marketing industry that you may not be aware of:

  • The success rate in this industry is less than 2%.  It doesn’t matter what MLM company you are with, what your up line tells you or anyone else tells you, the chances of you making your multi level marketing business grow using what is currently taught is less than 2%.  Bugging your friends and family, passing out fliers (CDs, DVDs, business cards, etc.), dragging people to meetings and home parties, doesn’t work for most people and it isn’t likely to change just because you are excited about your opportunity.
  • The national average says that most network marketers will put 2.5 people into their downline before they quit.  Why do they quit?  They quit because their company only teaches them to use their warm market to market to.  Most people can make a list of their friends of family and come up with 100-200 names.  Out of that list you may get 2 or 3 people to sign up.
  • Most network marketers quit marketing their business in 90-120 days.  Why would you stay in a business where you aren’t making any money? The retention rate goes to zero if you have nothing more to offer than a failing system.  After all of the hard work of getting people to join your network marketing program it really is discouraging to see so many people drop out.  Have you ever wondered how you are supposed to build momentum with such a high attrition rate?

Don’t get me wrong.  I’m not trying to tell you that it can’t be done using these techniques.  I’m not bashing on MLM companies or this industry.  The simple fact is that they have to survive and if they don’t, you don’t get a check because they will go out of business.

Most network marketing distributors that get involved don’t have a clue how to build a business, so MLM companies are forced to teach methods that are very easy and simple for everyone to use and understand.  If people knew that they were actually going to have to “sell” something, they probably wouldn’t get involved in the first place.  So you may use the techniques taught by your company and you may even put 10 or 20 people into your business, but it might take you more than a year to do it and it may take you more money than you will earn to do make that happen.

Of course, you may also be one of the lucky 2% and make it to the top of your MLM company using the techniques that are taught.  But the numbers aren’t in your favor.

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Amy Howard, August 27th 2009 | Tags: , , ,
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