Our business is very much under attack these days. ‘Good’ attacks however, give us an opportunity to see if we might make some changes that will improve it, think?
If you’re faint of heart and cannot take criticism in that light, do not read this post. It hurts. I think though, that we have an opportunity to fix something big. See if you agree.
In a recently published critique of one of our companies, (it happens to be USANA, but it could be almost any company), the author makes two stinging criticisms:
“The products do not drive the sales. The vast majority of [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][NM] company’s sales begin and end with purchases made by distributors who sign contracts that authorize them to recruit other distributors and be paid on their purchases…most quit purchasing goods totally and forever once they leave…”
“The sales people do not sell the products…they primarily sell the income opportunity…NM company’s main product is not the commodity it delivers (products) but the income opportunity that it cannot deliver. They must unconscionably promise the potential of wealth to all, while knowing its business model will, by design, always impoverish 90 to 99%.” – Robert Fitzpatrick
Forget that Mr. Fitzpatrick is an anti-MLM person. Read the comments. They do not come from a stupid person. We all know that our industry suffers a 95% drop out rate, and despite that, the lead of every one of them is some version of the “income opportunity.” That’s why so many people are up in arms.
Two questions for you. Do you agree that this pretty much represents us?
What steps we can take, as individuals, to change this ourselves? Before the federal regulators do something drastic?
P.S. In one of my favorite scenes of the original Karate Kid movie, the young man is scared and asks the karate master something like: “What happens if these experienced guys take a shot at me?”
Answer: “No be there.”
Duck. Same for us. We don’t have to be a sitting target if we’re ‘not there’ – i.e. not guilty as charged. Think?
—
What if you could learn to tell your story so you can amaze and delight your customer niche: Here’s a book and CD program to help. And here’s help for talking in a human voice about your business – a CD set and cribsheet .[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]
A few years ago I attended a conference in Orlando by the author of the book WHY ARE YOU HERE CAFE and the underlying theme was to join USANA. A USANA rep dominated the afternoon. I felt that the event was a rally for USANA potentials (most in attendance were invited by USANA reps) and the disservice done to the attendees who were not interested in USANA was significant. I was not there to be recruited by any company. It is activities like this that contribute to the MLM disdain. Shame on these misreprsentation practices.
Mary Riley
If you can’t find customers for your product, it’s time to find another company. (You are in what is called a “product pyramid scheme.”)
I’m not saying you need to find a LOT of customers, but if your product is as good as you are telling your prospects it is, you shouldn’t have any problem finding 10-20 customers.
If you can’t find customers, but you continue to prospect, you are only selling a dream, and it is, in my opinion very unethical.
Mark Yarnell, a very famous network marketer, says: “The challenge today is finding people who will focus on recruiting and retailing. That’s what Networkers are paid to do.”
In a healthy company, your upline should encourage you to retail at least some product.
— Walter Reade (from Wisconsin)
Walter@NMC
http://www.NuOpportunity.com
I agree with his comments. That is why I’m with Pre-Paid Legal. I can offer the membership without having to push one to become an associate. I also get a a large up front commission. I get paid daily and commissions on renewals.
Hi,
I’m with Young Living Essential Oils and Send Out Cards. These two companies are completely product oriented. There is a market for both; they are very precise in what the product is.
Check ’em out!
http://www.mycrews.com
http://www.mistexotics.com
http://www.red-infusion.com
http://www.love-joy-gratitude.com
Cheers!
The acid test for the product is “would one buy the product at the retail price if one wasn’t involved in the business?”
Ask it yourself of your own company and answer honestly.
If the answer is genuinely yes then you should have no qualms about promoting your business.
Obviously the compensation plan can favour product sales or recruiting and should have the right balance.
Troy
Free traffic for any business
Hi Kim.This goes deeper than
blaming it on our industry.
This win,win at any cost is
seered into a lot of folks growing
up.You know the lines,”win at any
cost,”your not trying if your not
cheating”, step on as many people
as you can to get to the top”
ect,.So some people will bring
that lying mindset to MLM and it
doesn’t take a lot of people or
companies to cast a bad light on
this industry.We can change that
right here at New School,if the
current members of this community
take responsibility to not only
be vocal but actively “out”
unethical and lying people and
companies in our industry ,we will
be viewed as the POLICE of our
industry.I would like to see a
New School rally in a city someday
just to meet all the community
members.
Raven
http://www.fdirep.com/rmahdee
Kim posed a very good and important question, “What steps we can take, as individuals, to change this ourselves? Before the federal regulators do something drastic?”
The Federal Government is getting bigger, not smaller. It is regulating more and more, not less. These regulations are affecting more and more areas, not fewer. Folks, it’s only a matter of time before the Feds impose major regulation on our industry. It’s happening in every industry. It will happen to us. How heavy they come down on us is dependent on our behavior as an industry. Politicians are reactive, not proactive. This means that when they do react, it will be an over-reaction too far the other way.
The good news is that every single person reading this blog can do something about it. Start with yourself. Disengage from any Old School activity; those things where they say that anyone can do this, the product sells itself, all you have to do is talk to people, and we don’t sell. Start telling people this is hard. It is work. It takes time. Just like all businesses do. And, not everyone can do it.
Ok, we know what to say, but how do we change an industry? Why not do what we already do? We already network. Why not harness the power, the very nature of our industry itself to change it? Recruit your uplines, downlines and sidelines. As the Duplicators say, “Just get the information in front of them.” Well, use that same idea on them. Talk to other reps. Teach your upline why 95% drop out. Your upline will have many stories about people who quit. Use that as an opening to teach them why that happened.
It’s time to promote a new agenda. Go forth and spread the Good News.
Peace,
Connelly
I don’t see myself as a network marketer to run away from or a pushy salesperson. I am an expert and consultant in the animal niche market where I help people with their pet’s health and they thank me for it. Never an objection and new customers every week. Any new business associate gets plugged into my team’s system and begins to get customers right away. I’m having so much fun, I love this business. The key is having the right mindset, a team to work with and a successful system.
Cathy Michaels
http://www.dogskinconditions.info
Kim. You asked the question, “What steps can we take, as individuals, to change ourselves? Before the federal regulators do something drastic.”
We (as a group) need to take responsibility to adequately train each distributor that we enroll and give them the skills they need to be successful.
We also have to ground each distributor’s goals of success in reality. i.e. If a distributor has just 2 hours a week, no startup capital (not even $30 to become a distributor) and does not want to learn how to sell – we have to honestly say to our new recruit, “This would not be a good business for you.”
I think it is a real shame that as an industry MLM seems to always get a bad rap for this “95% dropout rate”.
Other industries are also based on independent distributors and are not MLM but have similar stats.
In the lawn and garden industry you can become an independent distributor for many international name brands, for a nominal startup fee… say between $100,000 – $250,000.
The main company does not necessarily train you on how to run your business and many don’t provide a business manual either. They leave that up to each independent distributor – because they are independent and like doing their own thing.
That industry also has a large percentage of distributors (75%-95%) who do not make it year-over-year, who fail and close up their retail locations.
Isn’t this the same case as in MLM excpet for a brick and mortor store? Why don’t these folks also get slammed for their high drop-out rates?
P.S. How about independent: car dealerships, insurance brokers, real estate brokers, etc. Don’t these other business segments also sell the dream of, “Come start a business with us and you will start making money?”
Comment to Blanchard W. and all:
Don Wilson, a Platinum in Prepaid Legal, once made the comment to me that Prepaid is not a NWM co, but rather a direct sales company with an mlm pay plan attached to it for those who choose to do that sort of thing. This seems to me like the original intention of mlm and the only ethical way to have an mlm business structured. At the risk of sounding like a recruiting ad, the simple truth is that Prepaid Legal has hundreds of reps like myself who make a living marketing memberships. Recruiting is absolutely not necessary to a full time living in PPL.
glennjaffas@prepaidlegal.com
What steps we can take, as individuals, to change this ourselves?
I got involved with Network Marketing because I loved the products so much. I wasn’t looking for a way to make money, didn’t need a job, (I have my dream job) but I did have a problem that the product fixed so here I am 8 months later leading with my product. Even when working with pet professionals I always have them try the product in their office before becoming a Preferred Professional or Distributor. It’s the product they are buying into not the business (they already have a business.) My products bring more income in for them and if they decide to tell their pet business friends about it that’s even better for them.
Not counting the Pet Professional about ¾ of reps joining my team have started because of the product. I didn’t prospect the ones that have joined for the business. They found me through my product.
I sifted through dozens of NM coaches, read tons of material and finally found Kim, the NMC community and John Fogg. Now I know I will not be a sitting target. We have to keep working together on NMC. Bring in like minded people and sift through the fakes outside our community. We are in business for ourselves and what we do is 100% our responsibility so always do the right thing even when it stings.
Think about what we say to prospects and ask ourselves how we would respond to someone using these words. Are we taking time to listen to them or are we “listening through objections”?
I’ve made a page on Squidoo.com about the lies and what they are doing to NM.
It’s still a work in progress, not to promote my business or product but to take some small steps to speak my truth. I’ll be adding more as I have time.
I’m linking this to every web site I’m on and have emailed it out to almost 50 people so far. I did this as a way to bring others to NMC and the training materials we all have. Several of my friends have set up pages like this on squidoo.com. Like the one Mother organizing MADD I’ll keep finding ways to let my peers know how to learn the things I’m learning from everyone here on NMC.
Happy Weekend
Robin
No More MLM Lies
The question was……….: “Is Network Marketing A False Income Opportunity?”
I say……….”of course it is not a “False” income opportunity! Unless you think so.
I believe it can seem to be when one doesn’t understand the “TRUTH” about what the business is and what it truly entails…
It can seem to be a false opportunity when your perception is distorted and when you fail. Or when you are looking for excuses for your failure…
It’s a false opportunity when your self-image in this business is not congruent with what the business is or who you are……..
This business is a “TRUE” People Business. It is a real business that is only suited for people who have the “talents”, have identified and developed those talents and added the required people and sales “skills” to build it……It is not for anybody else…….
You are born with those talents. If you don’t have them, then just use and share the products.. Sharing the products is not the business. To expect anything else is an illusion.
When people think it is otherwise, knowingly or not, the failure and dropout rates will continue to be 95%. It is not for everybody………It is only for the qualified………
It is not up to us to try to change anybody or promise anybody anything! Yes, it is not your fault…….nor it is not anybody else’s fault.
I do not believe that anyone will change the 80-20 rule, the 2% rule, the 3% rule, the 95% rule or any other rule that has been in existence since the beginning of mankind…Yes, we can help others to join those ranks to take the place of those who leave. I truly believe those statistics will not change in our lifetime. They haven’t yet, have they?
Then on the other hand………Statistics exist because of other people’s thinking…….So there is a chance if enough of us change other’s thinking…. Make sense?
It is up to us to identify and qualify talent. Isn’t it? That is what will give Network Marketing an image of being a “True” vs. False Business Opportunity.
Tough Love, Dr. Herb Oliver / Mentor Dr……Virtual Millionaire Mentor…. mentordr@earthlink.net
A MLM Company can be different if they choose to run their company “differently”.
They can provide products that are value priced so that distributors can retail some of the products.
They can also create a compensation plan that will allow the part-timers who are 95% of the distributors an opportunity to be successful.
I am not a pushy person I get compliments on the fact that I loan the product out and if they like it they buy it, if they don’t nothing is lost!
Kim has been a great addition to my life helping me when I was scared to do a presentation in front of 405 people at The Chmber, but I relaxed and was myself kept it to the point had 20 minutes which seems a lifetime.
Carole Wilson
http://www.arbonnebycarole.myarbonne.com
Kathy, could there be something special about people who market products for pets? My company has over 95% retention rate!
We love our products (and our pets) so much, we just have to promote the products. No one ever leads with the business. We talk about it only after we have a customer who wants to share her solution to her own pet’s health with others. The Comp plan is heavily weighted to marketing products!
I believe that if your company does not have products that you are passionate about, it will fit in with the 95% drop out group.
We moved to this company because we just wanted to help pet owners feed good stuff to their pets. Especially now that we know most pet foods contain almost no nutrition and even toxic ingredients.
It’s the passion for products that will change the face of NWM.
Gerrie Smith
http://www.healthypetnet.com/gerriesmith
Is my company (Juice Plus+) the only one that has no mention of the business opportunity on the home and affiliate sites?? NSAVirtualFranchise, which is the site that explains the business, is not even linked to the product site where we send prospective customers.
Training revolves around building a customer base, with most distributors rising out of that group — once a customer finds they love the product madly, they may have an interest in joining our team, whether to make enough just to cover their own product cost or to build a large network. At this point I move their own order to their new business, along with any family or friends they’ve previously referred to me. This means that some distributors may start right off with customers in place and so could even automatically advance to a higher retail profit percentage.
I assume there are many other companies, too, where good part-time income can be made from simply finding customers. So why not shift the major NWM emphasis onto our fabulous products and less on the proven “iffy” opportunity? Can we make money if we “sell a a product to people who. . . “? Yes, we can, so why not run with that one and let the leaders emerge quietly, with less hype?
We know there are plenty of people out there wishing they had a way to make just an extra $500 a month, and we know they can do this finding customers. So the possibility of an expanding network simply becomes another profit center, not the be-all end-all.
How about we say, “Sure, a small percentage of people find lots of customers and lots of distributors and make gangster money, but more of us find mostly customers and get paid every month on them, just like the cable and telephone companies. Think you could find some customers for this product that you love?” Less exciting, for sure, but truthful and workable for the larger group. “Success” will be within reach, with fewer soap boxes available for the pukies. People can state confidently, “All I said was I was going to find some customers, and I’ve done that, so there.” 🙂 We can dream more privately of the opportunity for wealth — it’s when we shout to the world that we’re all going be rich that they dismiss us as completely off our rockers, for good reason, sigh. . .
We don’t have to fear attacks by the Robert Fitzpatricks. We just have to head them off at the pass by cleaning up our act a bit.
Dianne
Thanks the many good comments!
The big reason “we” get “slammed” about the failure rate is that we sell the financial freedom opportunity first and foremost, in most companies. We promise easy, anyone can do it. Then when 95% drop out, we look like liars.
No promises, no problems.
The other reason the drop out rate is worse for NM is that franchises, car dealerships and such require someone to put up $50,000-$100,000.
People who put that up sort of money tend to try harder, and longer.
When we stop promising the moon to everyone, we will not be targeted as much for selling false hopes and dreams when most people fail, the way we are now. It’s the constant promising of easy big income that gets us slammed with the 95% drop out rate.
Once we stop selling that, the drop out rate won’t be any more of an issue than it is in any legitimate start up. It will be considered normal. Like it is in other businesses.
One of the problems with an issue like this one is that we allow guys like Fitzpatrick to control the rhetoric. He claims 95% of network marketers “fail” or “lose money.” We typically respond by either attempting to refute the claim or discussing how we can change the failure rate.
However, I’ve never heard anyone attempt to take control of the language of the discussion. Allowing Fitzpatrick to frame the parameters of the debate allows him to control it and frame it in the negative connotations he is attempting to convey.
I prefer to look at the truth. And the truth is that very few network marketers “fail.” I’ve been in my business for 3 years, and I have not yet seen a single person “fail” at the business. Everyone I’ve worked with who did the training, who consistently worked on their business (promoting both the product and the business opportunity), and who persisted at doing it has had successful results.
Every single one. That’s nearly a 100% success rate as I see it.
Problem is, this business is too *easy* to get into, and a lot of people join who should not. And a lot of distributors sponsor these wrong people because its too easy to do so.
These people are not network marketers. They never “do” the business. They join, stick around for days or weeks, put in little or no effort, and quit as fast as they start. Then, they go about broadcasting that they “failed” at the “scam” that is network marketing and “lost” their money. Fact is, the never did network marketing in the first place!!
Yes, maybe they joined a company. But they certainly did not do network marketing, so they could not have failed at it.
Its a case of easy come, easy go. By making it too easy for the wrong sort of person to do it, we attract a lot of the wrong sort of people and allow them to get started. Then they quit and make a bad name for the ones who actually join network marketing and put in the effort to do the business.
As Kim has stated, “no more sponsoring everybody who breathes. Sponsor only the right people, for whom this is the right thing to be doing, and the right time to be doing it. Nobody else.”
(sorry Kim, I might not have gotten the quote exactly right…its from memory)
When it comes to building a business organization, this is all we can do. Focus sincerely on helping the right ones. Only sponsor people likely to actually do network marketing after they join the business. Then, by taking the responsibility to train and support our babies, we enable them to build towards success.
Even with this, many will drop out without ever doing the business. But some *will* do it. And, nearly all of those will succeed.
That’s the world of business. And the “many quit, some will actually do it” truth is the case for every single business on the planet. Unfortunately, we happen to be in the only industry that reports statistics, allowing guys like Fitzpatrick to attack it using his false definition of “failure.”
But, as long as we are focused on responsibly sponsoring only the right people, we can reject his argument as the false statement that it is, responding with true and correct rhetoric regarding the real success rate for people who do the business.
Scott Simon
http://ssimon.networkmarketingcentral.com
No, Network Marketing is not a false income opportunity. It is a great opportunity but it is not for everyone.
The question of do you lead with the business opportunity or the products have been debated by industry leaders since the beginning of this industry.
As many of you understand, Network Marketing is simply another way to distribute products or services and this method is very effective and proves itself everyday evidenced by the number of companies that use this method.
Every company out there has their success stories as well as their less-than-successful stories. If the people involved in the less-than-successful stories were honest about their own participation in their business opportunity I believe we would find 99 percent of the reason they never made any money was because of they lack the necessary skill sets. I know that has been true for me.
Network Marketing incorporates the power of leverage which means a lot of people are individually doing less than what one person would have to do to have the same results. The product and/or service is irrelevant to this process.
If we lose sight of that then we don’t have a complete understanding of the power of Network Marketing.
I love Network Marketing and I have since the first day I was introduced to it back in the middle ’70s. Shaklee (a great company) was my first company, never made any money, but I loved the business model. Time passed and I kept on trying different companies and I got the same results. I made no money and I mean no money.
Then in 1986, I quit the Los Angeles Police Department to work another Network Marketing company. I cashed out my pension, I was 19 months short of a life-time pension, to work this great opportunity. Well, in 6 months that start-up company (less than five years in the business) went out of business and I had spent all my pension money trying to do something I did not have the skills to do.
Of course, I was a little discouraged and it was a couple of years before I tried to build another Network Marketing business. Three more times I tried and each time the company I went with went out of business before I made any money.
Then in 1995, I was now a mortgage/real estate broker, the interest rates had gone up in Feb, 1994 and mortgage brokers were going out of business on a daily basis. I never once heard anyone say the mortgage business was not a legitimate business even with all those failures.
In April of 1995, I was introduced to USANA and I started taking the products and what I noticed was I had more energy. Then what I noticed was other people had more energy when they took the products.
I worked the business part-time, as I still do, and started to earn some money for the first time in over 20 years of failing in Network Marketing. Not a lot, but I did replace the money I would have received from my LAPD pension.
Today, I’m only work USANA and I’m training to run the 800 meter run, break my high school record I set in 1961 and raise a billion dollars for charity. I will do this in 2008. I train for 6 hours a day, 5 days a week at our local YMCA. You can learn more about how you can donate to your favorite charity on my web site at http://www.billiondollarrun.com.
I mention this because it is important to realize Network Marketing is a great business opportunity.
It is important to know that there are many great companies out there who offer people a wonderful chance at financial freedom and because of our compensation plans the consumer gets the opportunity to have their products paid for (from their earnings) and an opportunity to earn some real serious money.
They simply need to understand this is a people business first than a product distribution business second which of course involves sales.
We all need each other, is is important for the industry to have all the companies that currently make up the industry.
We can and are changing peoples lives with our products and our business opportunity call Network Market.
One simply can not quit.
Respectfully,
Duane Spears
http://www.billiondollarrun.com
Kim –
That 95% drop out rate is misleading. It takes into account those dead beats who never seriously built their business. We should only count those who work it hard for at least three years. Besides, many people do sign up for the product and that bunch is added in that 95%. I say those who focus and build it hard have a much higher success rate. To a new person, seeing that 95% drop out rate is misleading. Network marketing works if you do.
Network marketing is moving (selling) products through a network of distributors. There is nothing wrong with that business model. It’s a form a selling and it works. It makes perfect sense. My local store doesn’t cut me a commission check. Thank God we have network marketing – it’s brilliant.
Usana is a great company with integrity and class. They have been great leaders in our industry. Usana has been a god send to me and my family. These silly attacks have no merit – it’s a bunch of evil people trying to make a quick buck. We all need to stay united and protect our wonderful industry.
Thanks for all the great work you do. You’re awesome Kim!
Your Friend,
David
Kim….I agree with what you are saying about investment. I was a successful member of the “brick & mortar” community where you have to make a real and substantial starting investment. Then when your business takes off, you will probably need to also fund that growth with more substantial investment.
When you have to plunk down hundreds of thousands of dollars you start looking at things more realistically. How many of these companies hyping miracle products and miracle paychecks would attract that kind of capital investment?
When the part of the population, apparently large, that is feeling real pain hears about miracle paychecks, promoting miracle products and services, with almost no investment, they fall for the illusion, and what happens to the networkers? Is this fertile ground for the illusionists?
When I hear people on calls saying “I did my research”, I wonder, what was that research? Did they go out into the market to compare the proposed product/service to see if it’s competitive, or did they just believe the hype? Did they really, in all honesty, ask themselves if they would pay that price for the product/service if they were not involved in the company? When I hear them say the product is superior, I would ask, says who? When someone is making a claim about a product/service, do you sit back and ask yourself, who is making that claim? Is the company/person trying to sell you something, or is it from a totally independent source? Buyer beware!
The problems in this industry are not simple ones, and now “big brother” is proposing to step in even further than just shutting some companies down and levying hefty fines. From the networking side of the fence this doesn’t sound like a warm and fuzzy idea. Although I can’t speak from their side of the fence but it doesn’t look like our community is doing anything to stop the illusionists, false product/income claims, etc.?
I think all of us in the networking community need to “get real” and look at what’s going on. We need to really look at the companies we are involved with and make a business decision as to whether we have a real opportunity to build an honest business or are we just supporting the illusionists?
In the years I have been involved in this industry, I too, have fallen for it!
Steve, The Pet Food Guy
Unfortunately, while we may not like the messenger, anyone who’s honest with themselves, knows that his message is true in far too many networking companies – Not all comapnises, but an awful lot of them.
Ultimately, company owners and management are to blame for the state networking finds itself in today because they control what is and *is not* said about their business and products/services.
As difficult as this is for me to both think and say, sometimes I wonder if some sort of regulation could help clean this mess up?.
We haven’t done a good job of cleaning it up ourselves over the past 60 years, have we?
Keith
I can honestly say this.
It is because of Kim’s training & her book (If My Product so Great – which after reading so many times is held together with duct tape) AND companies like USANA…that I dropped ALL of my past companies.
Then I had to go on a quest (which I think was the quest I have had my entire career…but it was NOT out there and kept getting sucked in) to look for the right company. NOT an easy thing mind you.
But I wanted to look for a company where the CUSTOMER came first with a product that the distributors could move AND make a living. And believe me…that is not easy to find.
The company I with now is very close to that. The customers are very important…as are the products. They encourage us to get customers. They gave the product an excellent price point ($66 wholesale). They also made it very easy for the distributor to make money for getting Preferred customers We get $16.50 every time a PC gets their product).
So yes, the industry is changing…we CAN make a difference. But in order to make a difference…we have to change the way we talk…and the company and you need to be in alignment. And the last one is NOT an easy find.
That…with Kim’s training and your due diligence, it can be done and YOU will be a success.
Be Well!
Matthew Adams
706.592.0952urs
http://www.sozomax.com/matthew
Over 60% of readers/respondents so far said they don’t sell products, but mostly sell the income opportunity and that they promise the potential of wealth to all, knowing 90%+ lose $. Conversely, they don’t do eithr one and that something needs to be done about this. Are the respndents to the surveys not the same people who make comments? Kim, it seems you have very nicely (sneaky I might add) revealed that many of your readers and writers are in very bad need of your “New School” products. Either that or they are just not getting it.
Keep up the good work.
Norma