Wednesday, September 9, 2009
Network Marketing: Figures Don't Lie, But Liars Do Figure
Advertising copywriters and salespeople are trained to give specific numbers. in order to increase credibility. And that's great, if those numbers have any basis in reality. In network marketing, they often don't.
Companies say, "We keep 93% of Our people!"
Truth: There was an MLM phone company a few years back that had to publicize their retention rate, because they were publicly traded. They're out of business now, so we'll go ahead and mention their name - Excel.
Take a guess. Out of every 100 people Excel signed up, how many were still in the business a year later?
25%? As they say in the Hertz commercial, "Not exactly!"
10%? You're getting warm -
Excel's public record showed 6% to 7% retention. That's not 67% - it's 6 to 7% retention!
So you build your network marketing business for a year:
* You buy advertising.
* You do 3-way calls.
* You go to meetings.
* You talk to all your friends & relatives.
* And you wind up recruiting 100 people!
Yippee You're almost rich.
Well, not exactly. Why? Because what you have left is 6 to 7 people out of 100 (!) still building the MLM.
Ooops - wait - that's not all you've got. You also have:
* Smashed dreams.
* Maxed-out credit cards.
* And probably a LARGE bunch of people who hide when they see you coming!
Whatever you do in network marketing must be duplicatable for the masses. Six to 7% retention is not smart business.
Results like this make it obvious why we coach people to first find a "5-Pillar" company, and then to build relationships with prospects.
It is bad business to recruit someone into an unstable company.
It is bad business to recruit someone before you have built a relationship with them.
When you recruit a person who is your friend into a "5 Pillar" company, the two of you have a commitment to each other and a strong chance for success.
When you try a business relationship without that personal, mutual commitment, or with an unstable company, your chances of failure skyrocket.
It is the truth.
For me personally, I have found building my network marketing business to be fun, and I am in business with people that will be my friends for a life time. I don't just sponsor anyone into my business, I make sure that I have a good connection with the person, and would want to be on a 30 day cruise with them.