Before we get into the reasons people fail, I want to address the The 95% failure rate in MLM.
First of all 95% of ALL businesses are out of business within 5 years – across all industries, not just MLM
And around 70% of the people that join a network marketing company DROP OUT – and that is different from failing.
So if we subtract the 70% of voluntary dropouts from the “95% failure rate,” that drops the statistic closer to a 25% failure rate.
Here are the top 3 reasons I believe network marketers fail…
Reason #1 – Lack of Money and Results
It’s no secret that you have to invest money to start a business. In network marketing this includes your start-up package, auto-ship, business cards and other expenses like coffee or lunch meetings with prospects who don’t end up joining.
If you are marketing online you may have to pay for blog hosting fees, an email autoresponder, marketing funnel software, and a professional contact manager.
According to the DSA, the average time a network marketer stays with a company is 6-8 months.
NEWS FLASH – THIS IS NOT ENOUGH TIME TO BUILD A REAL BUSINESS!
This is mainly due to mismanaged expectations like their friend or upline telling them they can get rich overnight just by sharing the opportunity with a few people combined with a lack of results in the beginning.
Think about the first time you got involved with Network Marketing… you were probably thinking your best friend would join FOR SURE… oh and Mike will blow this thing up, he’s a great salesman… and everyone NEEDS and will want the product even if they don’t do the business.
Sound about right?
And if this is your first rodeo, hang on… it’s a fun ride, but you’re going to get knocked off more than once.
The other reason for lack of results is from lack of upline support and mentoring. A lot of times it’s like the blind leading the blind, the upline doesn’t know any more than the new person they signed up.
Usually there will be some sort of “Fast Start” training created by the company or leadership further upline, but it’s usually so basic that it doesn’t help much.
And it has to be basic so that it’s “duplicatable.”
If you are committed to your success you may need to get training and mentoring outside of your company.
Like any business there’s real work involved and you probably won’t see profit for awhile. The good thing about network marketing is that the start-up costs are relatively low so you aren’t risking much up front.
One big factor that differentiates building a network marketing business the traditional way vs. utilizing online marketing to build your business is the ability TO MAKE MONEY NOW WHILE ALSO GENERATING LEADS.
Which brings me to…
Reason #2 – Lack of Leads
One of the biggest challenge people face when trying to build a network marketing business is getting leads.
Most reps waste their time talking to untargeted, unmotivated, uninspired, and generally uninterested people, trying to “convince” them to have an open mind and look at a new opportunity.
They ‘share’ their products and opportunity with friends, family, co-workers, members of their church and business contacts.
But once you’ve worked through your warm market, you may find yourself staring at your phone, and wondering “who you gonna call?”
So, where do you turn to find people interested in purchasing your products and opportunity?
The “Internet” did you say?
Using the Internet you can take cold leads and turn them into your new “warm market” and then into raving fans who buy your products and join you in your organization.
Done right you can even generate leads, make money outside of your network marketing company and expose people to your opportunity all at the same time.
BUT – You MUST know what you are doing in order to pull this off, and I’ll get to that in a moment.
Reason #3 – Lack of Marketing Training
Lack of marketing training is a big reason this industry has a such a bad reputation. I see so many network marketers making the same mistakes over and over again.
Most network marketers think that the more people that know what company they are in, the better chance they have of recruiting more people. This is simply not true.
Tell me if any of this sounds familiar…
The first thing a newbie network marketer does is get their company replicated website link.
Then they go out on social media sites like Facebook, Twitter, and Linked-In and posts messages saying “Check out my company” “This is ground floor!” We have the best products” “Save Money!” Make Money!”
They send spammy emails and long explanations about the science of their products, their 7 layered comp plan and a “Check it out and call me” closing.
Then they sit back and wonder why no one is responding…
1. First of all, why should I go to their website? No rapport has been established, they haven’t determined if I even want or have need for their product, company or service.
2. How are they any different from the other 20,000 independent distributors with the exact same website?
3. And if I did happen to go to their website, how would they know? Do they have a way to capture my information so they can follow up with me?
4. If I did like the company and comp plan, the first thing I would do is find a leader who knows how to market properly and sign up with them.
People want to be led, not hounded by a desperate new rep with nothing to offer.
If you are doing any of this it’s ok, I used to do it too. Just know it’s not going to get you to the top of your pay plan.
Might I suggest you attract people to you, instead of you chasing them?
I’ll go into that in a future post… until then
Create A Great Day!