Why People Fail in MLM Network Marketing
Here is a sobering fact: over 95% of people that join MLM or network marketing opportunities fail.
Most of these people end up spending a lot more money than they make and the average life span of a new customer or rep/distributor in MLM is a mere 3 months.
Why the high attrition rate?
Why do so many people fail in the MLM network marketing business?
Here are some brutally honest answers to these questions based on our experience:
The majority of new recruits take no action and do nothing.
Some people joined an MLM with the idea that they had found an automated system that will make money from home on auto-pilot. These systems simply do not exist, but if you find one, please let me know.
Others are just plain lazy and expect everything to be done for them. If you are a network marketer, be careful, because you will sponsor lazy people and they will end up wasting a lot of your time.
It has been our experience that less than one-third of new recruits will actually take some action, while only one in ten will be committed.
People are unwilling to get out of their comfort zones.
This is especially evident with regards to recruiting. Many new distributors have no sales and marketing skills and are very resistant to learning these new skills and facing their fears, in particular the fear of rejection.
My friend and mentor Brad Weinman once said, "Recruiting, for most people, is about as enjoyable as a prostate exam."
And let's face it, in most MLMs, if you are not recruiting, you will not make any money.
Only an extremely small percentage of people actually turn a profit.
Only one third of one percent of all network marketers will make enough money to cover ALL of their expenses. The other 99.66% will lose money or break even.
Most of the money is gobbled up in expensive products, promotional material, books, tapes, the never-ending functions, babysitters, takeout meals, and hundreds of gallons of fuel to attend all the meetings, rah-rah rallies, and presentations.
MLM can have a negative effect on other areas in your life.
Some people become so focused and devoted to their network marketing business that they neglect their marriage, relationships with friends and loved ones, their health, and so on.
The pressure to succeed is intense and leaves a lot of individuals spinning their wheels for years without ever getting ahead.
The big promises of MLM and building a “life-long” residual income in 3-5 years (or more) is never going to become a reality for the average person.
As Mike Dillard so aptly observed in the Coffee House Letter, "Building a full-time income through the traditional MLM business model is like trying to constantly fill a leaky bucket."
So what is the solution?
Is it still possible to build a residual income from home?
Yes, we think it is and here are two suggestions:
1. Read Magnetic Sponsoring
If you are serious about your network marketing business, purchase a copy of Magnetic Sponsoring by Mike Dillard and begin to apply what Mike teaches.
Many people have become very successful by following Mike's advice, which, by the way, is all about learning how to attract people to you like a magnet, which is the opposite of the traditional recruiting method of chasing people down.
2. Cooperative Marketing
Cooperative marketing is a 21st century business model where the company acquires customers through marketing and advertising, and offers you, the affiliate, an opportunity to purchase the profit-sharing rights to these customers for life.
The company looks after all the customer acquisition and retention, ships all the products, and sends marketing materials to customers on a regular basis.
This is ideal for the average person since you do not have to recruit, or learn any new skills.
However, if you choose to actively recruit, you are rewarded generously in the cooperative marketing business model.
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October 21st, 2009 at 3:57 am
Almost everyone with business is now onto network marketing. Through this generating a good income is only a step away. This new trend is now widely used and is proven effective.
Network Marketing Expert´s last blog ..Welcome!
December 4th, 2009 at 10:09 am
Yes now every one is using network marketing to increase the revenue. well such marketing idea is good.
March 8th, 2010 at 11:00 pm
Well i think most of them are still using Old School Methods like making cold calls or home parties for MLM marketing. These methods worked before the internet age, but not in the current times with the current economy.
March 16th, 2010 at 10:36 am
MLM can no longer claim to be new and, thus, exempt from the normal rules of the market and the way goods and services are sold. They have been tried and, for the most part, have failed. Some have been miserable failures in spite of offering excellent products.
March 22nd, 2010 at 5:39 pm
When we invited people to join our network marketing program we are asking them to join a business that can only grow by "sales and marketing" on a consistent basis over an extended period of time and MOST people have no sales and marketing experience. So for most people it is not going to work without the proper leadership and training.
April 22nd, 2010 at 5:56 pm
In every business in this planet only a small percentage make the big money, Network marketing is bit better because all the others make at list the product or service for Free. I agree with Mike Dillard that we should try to brand our name and sel others things o the side and then again all the people out there they must start from somewhere.
sincerely,
Sergio Ervini
June 30th, 2010 at 10:23 am
Network Marketing is a very good way to promote your products in a short period of time.',.
July 26th, 2010 at 11:28 pm
Network marketing is really great for easily earning cash in a short period of time.:.,