Network marketing is probably the best business model the
average person can use to achieve real success in their
life. The low start up costs, excellent training and
support, and the friendship and mentoring of other like
minded people all combine to make it a real opportunity
that is available and easily accessible to people from any
walk of life.
But most people fail miserably. Why is that? Well,
first of all, it’s important to realize that most people
fail in any type of business venture. Look at the facts:
-95% of small businesses are out of business within the
first five years according to the Small Business
Administration (SBA)
-According to the Social Security Administration, by age
65 only 1% of Americans are wealthy, 4% are financially
independent, 5 % are still working (against their will!)
36% are dead, and 54% are flat broke.
Both examples point to the same thing: Only five percent
of people succeed in life. Just five out of a hundred
businesses make it, and just five in 100 people earn
financial independence in their lifetimes. This is
important to understand, because the failure rate of
network marketing (which happens to be 95%) is easily
misunderstood, and the industry as a whole is condemned
because of it.
So if the problem isn’t really the industry as a whole,
but simple human nature, are ninety five percent of us
doomed to failure and there’s nothing we can do about it?
Of course not! As a matter of fact, often times the
difference between the successful and the not-so-successful
is very small. Usually a difference in choices,
mindset, and that elusive quality entrepreneurs call
“intestinal fortitude”. Successful people just don’t quit
as easily as most.
So, assuming you have the qualities of success, and you
want to succeed in Network Marketing, it’s important to
know why it is most people fail, and how you can avoid the
pitfalls.
So here are the four main causes of failure:
1. Lack of money
This one is a deal breaker for a lot of people. They just
don’t have the money to market their business. Often
times, they joined the business and didn’t understand that
it was a business! Yes, Network Marketing is a business.
But it’s unique from all other businesses in that you start
at the top of your organization, and work down. In
traditional business you start at the bottom and work up,
but not here. You are, on day one, the CEO, President,
Vice President of Marketing, and Chief Bottle Washer all
rolled into one! And your business needs to be marketed.
The days of “Make a list and talk to your friends and
family” are all but gone. That method may work for a short
time, but who are you going to talk to when you run out of
friends and family? You need to market your business.
Whether it’s through calling purchased leads on the phone,
marketing to a lead capture and sales page, running ads in
papers, or doing meetings and parties, you need money to
professionally market your business.
The good news is that you don’t need very much money. And
with the emergence of the internet, I’m proud to say that
the amount you need is going down while the results are
going up. As a matter of fact, my leads now pay me! Talk
about a paradigm shift. I used to spend hundreds of
dollars every month marketing my business, now my marketing
budget is funded 100% through my marketing efforts. More
on that later.
The first thing you need to realize about Network
Marketing is that it’s designed to be part-time. There are
people that desperately need to make money, that just flat
out shouldn’t be in the business yet. The idea is to have
a J-O-B (Just over broke!) that makes you enough money to
live on, and spend $50-200 a month on marketing your
network marketing business. Once your business gets going,
make sure and invest a portion of your income back into
your business. I invested 20% of my commissions into my
business for the first nine months, and when my Network
Marketing income exceeded $4,000 a month, I didn’t have to
spend near that much any more. But investing 20% was more
than enough to get my business up to a full-time income. I
know other people that invest ALL their money back in until
they make a full-time income. The point is, make sure your
financial house is in order while you build your Network
Marketing business, or it takes a lot of the fun out of it.
2. Lack of Activity
This one will drive you nuts if you are a leader in your
organization. You find somebody great, they have all the
skills, they are willing to invest in their business, they
look good, smell good, sound good, but they don’t DO
anything! And you spend your time coaxing, prodding,
inviting, chauffering, paying for their convention ticket,
but in the end it’s all a waste of time. Remember the
statistic: 95% fail in ANYTHING? Well, this is a major
reason why. And you can’t do much about this, all you can
control is you. Here’s the best advice I can give on this:
1. If you want your team to go into momentum, YOU have
to go into momentum.
2. Work with the willing. Those that would rather
watch the season finale of latest reality show, rather
than work their business, just aren’t going to the top
with you. Don’t waste your time. Keep looking!
Remember, “You can run with a thousand, but you can’t
carry three.” -Jim Rohn
If a person is struggling with activity, it’s probably for
one simple reason: They don’t want it bad enough. If
their why is big the how becomes easy. But again, you
can’t fix this, you simply have to go through the numbers
until you find those passionate few that really want
success, then sprint with them. If you are personally
struggling with your activity level, you need to evaluate
your why. You simply don’t have enough passion for what
you’re doing.
3. Lack of People to Talk To
There are three types of leads in Network Marketing:
1. Warm Market. These are the people that already know
you and (hopefully!) trust you.
2. Purchased leads.
3. Self Generated leads.
Your “Warm Market” is a list of people that already know
you, like you, and trust you. Your Warm Market is your
personal network. According to Paul Zane Pilzer, author of
“The Next Millionaires”, this personal network is absolutely
key to your success in any venture you attempt. In Network
Marketing this is especially true. Even if somebody in
your warm market isn’t interested for themselves, they have
their own network that they will open up to you if they
trust that you will show respect and be professional in
your marketing to their friends and family. Warm Market
leads are great because they are free, the problem is that
most people in Network Marketing never graduate past their
list of friends and family. And very few people are ever
going to be good at cold market prospecting. But if you
work your warm market effectively, you will probably find a
handful of leaders for your organization, and learn the
skills and company knowledge you need before heading into
purchased leads and self generated leads.
The next type of lead is a Purchased Lead. These are leads
that you purchase from a “Lead Broker”. Purchased leads
are easy to get, there are a million lead brokers out there
selling batches of leads, in varying quantities. Be
careful, and make sure and deal with a reputable lead
broker, but leads can be a good way to go, especially if
you are new. But I recommend that as soon as possible you
learn to generate your own leads.
Self generated leads are the third type of lead. One
method of self generated lead I really like is called a
“Funded Proposal”. This method is a lot of fun, because it
not only generates good quality leads, but it makes you
money! For example, here’s how I do it. I found a book on-
line that I really like. It cost me $27, and has full re-
sale rights. What that means is that I can sell the book
for whatever price I want, and keep all the money. The
book I sell is called, “Net MLM Profits”. The reason I
like to sell it is because it has so much good content for
network marketers, teaching all the latest on-line
strategies
and skills network marketers need to succeed in their
business. To market my e-book I have a
Capture Page and a Sales Page where people can buy the
book. I charge $27, the same price I paid. I then market
the book on the internet (I learned how to do that in the
book!)
Now, this is where it gets fun. Who would be interested
in a book about succeeding in Network Marketing? That’s
right, Network Marketers. Who responds to my
advertisements and goes to my sign up page? Is the light
bulb coming on for you right now? I hope so. You see,
every month I generate HUNDREDS of qualified network
marketing leads. And enough of them buy the book that it
pays for my web-site, my advertising, and even makes a
profit! It’s the best system I have found for generating
leads. To see the system I just described go to:
4. Lack of Skills and Knowledge
This is the fourth reason people fail in the business.
Who can learn something new? Anybody can if they want to.
But how many people are willing to? Did you know that 65%
of High School graduates never read another book in their
life?! Sad but true. Referring back to our 95% failure
rate, if the majority of people don’t even read a book
after High School, it adds a lot of light at the end of the
success tunnel for those of us willing to learn and apply
ourselves! It doesn’t take much to beat the masses. All
the wisdom of the world is available free on-line and at
the library, but here’s another statistic for you, only 3%
of Americans own a library card! Again, you don’t have to
be a superstar to get in the 5% club, you just have to be
willing to learn the skills and habits of success.
In Network Marketing the buzzword for developing skills is
“Personal Development”. Every decent Network Marketing
company that lasts long term has a culture of personal
development. What is personal development? The best
explanation I ever heard was this one:
1. Read at least 10 pages a day in a personal
development book.
2. Listen for at least 20 minutes a day to a good audio.
3. Attend a live seminar at least quarterly.
These are three habits that anybody can work into their life. It doesn’t take that much time to read ten pages,
just give up one half hour date with the idiot box. And
listening to 20 minutes of a good audio is easy for most
people as well, because we spend that much time or more
driving. The radio is nothing more than “bubble gum for
the brain”, why not turn it off and put on something that
can change your life? And again, personal development
audios are available from the library if you are on a tight
budget.
So those are the four main reasons people fail, and how to
succeed in spite of them. It has been said that, “a
problem defined is halfway solved.” Hopefully just by
identifying the four main causes of failure you now can
tackle your Network Marketing business with more confidence
and enjoy the “Rock Star” income Network Marketing promises.