“Most distributors view what they can earn as a vitamin discount, not as a path to profits.” –Fred Cooper Executive VP, USANA.
I’d venture that 87%+ of the reps in other established network marketing companies, are just like USANA’s – they stay on to buy their products at a discount, not to sell them.
Granted, most may have started out dreaming of the profits they could earn, but for whatever reasons, they don’t do the business anymore. Yes, one could cry about that, but one could also acknowledge the bright side: The distributors-turned-customers are happy with their discounts, and their continued purchases keep the companies – and their active distributors – in chips.
If the distributors-turned-customers were to leave, not a single NM company would be left alive. So the fact that 87% of USANA reps are distributors-turned-customers is a good thing, not something to be criticized or changed.
Rather, what’s needed is to address the disconnect between the way the business is presented and the reality of it. 87% loyal customers is what makes network marketing sustainable and attractive to the 2/3 of Americans out there who want a meaningful business of their own.
How do you think we can present the business in a way that is consistent with the way it really is?
You are already teaching it Kim…The New School Way!
And, by the way, it is AWESOME!
Matthew Adams
Max International
http://www.sozomax.com/matthew
Unfortunately, the network marketing industry is mostly this way. Look at all of the hype being spread all over the internet. People are told they can sign up, do next to nothing and make the big bucks.
Companies/uplines tell you “Get them on an opportunity call and sign them up immediately after”. They make you feel like a failure if you can’t “close” someone. BUT…when you have to “close” someone to get them into the business, you will have to “close” them every month to get them to do anything.
Build your businesses on solid ground. Let people know what is really involved. Give them time to think about it and make sure it’s what they want to do. I don’t mean a few hours, I mean days. Weeks if necessary. Your business will be so much stronger that way.
Roxanne Green
Be A Mentor With A Servant’s Heart!
Unfortunately, many people presenting the business part of the opportunity neglect to tell the prospect what the realiy is about all aspects of the business, as you mentioned, Kim.
If a product can stand alone without the opportunity attached, that says something huge.
It is a wonderful world that network marketing offers quality products for people to buy. Yet, in my humble opinion, the products have to be able to stand on their own and also be in line with pricing of similar products offered on the selves of stores.
And I agree wholeheartedly with Roxanne, that if you have to work at closing someone, you will have to work at closing them month after month to do something. It can sometimes be months before someone is ready, willing, and able to get into the business.
Warmly,
Marygrace
IdealScents.com
The Naturally Scents-ible Business
You’re absolutely correct, Kim. A lot of distributor-turned-customers stay on for the ‘discounted’ product purchases. I did with the last company I was with. Didn’t make any money but loved the products. Eventually I left, but I still buy the products from friends.
Another great point you made is that if the 87% who stay on ‘just’ as customers were to leave, not a single NM company would be left out there no matter how great the company is. They stay on because they fall in love with the products. They know they are superior to anything else out there.
Great points, Kim!
Happy Birthday!
Ilka ;o)
If people want to get involved to only get a discount that is not a problem as we don’t everyone to do this. We are only looking for people like us. Keep it simple and build a business based upon a large customer base (just like AOL, Shaw, or any other business that exists on planet earth). From a large customer base that you build from the ground up will result in some reps that want to build a business (just like you).
🙂 Andrew
In my opinion, the single most destructive thing that network marketers do to make disgruntled ex-reps AND to attract bad press is to encourage (or require) new reps to spend beyond their means.
If you bring someone into the business and they buy a starter kit and a hundred bucks of product a month, and then decide the business isn’t for them, it’s not a big deal. On the other hand, if they buy the big package and spend lots and lots of money on advertising and leads and hotel rooms and conferences, and end up dropping the business with THOUSANDS of dollars in losses they will never recoup, it tends to make one bitter.
Teach your new reps to determine their budget and show them a way they can move forward within their budget.
— Walter Reade (from Appleton, WI)
Walter@NMC
http://www.NuOpportunity.com
Kim asked: “How do you think we can present the business in a way that is consistent with the way it really is?”
To do this, we would only discuss the business with people who came to us wanting a business, via ads we’ve placed for instance. We would seek out customers and leave them be. If a customer loves the product and wants to sell it, we let them come to us and say so.
But I guess that’s a little ho-hum boring, dontchaknow.
Tracy
One more thing – These MLM companies need to have a program where customers can just be customers. I used to be with a company that charged $29 to join as a customer and get the “good” prices if you agree to buy a certain amount every month But, the products are concentrated and last forever so I ended up with tons of product. I’m still using some of it 2 years later. Then they charge $25 for the privilege of paying double the price on their products. The poor people in that company can’t even sell their products to the occasional customer. They have to coerce everyone into being a business builder. That skews the numbers.
In my company, everyone pays the same low price. Customers can be just customers and aren’t counted as buisness builders. They don’t have to pay a fee to be a customer. We actually like customers and the company encourages us to get them.
The company rewards those who want to build a business with commissions based on sales of their entire organization whether it’s to buisiness builders or customers.
THAT is the way a network marketing company should work. Then you know how many came in to build a business and how many just want to be autoship customers and how many just want to be the occasional customer. People look at my products and are shocked that they can buy for the same low price that I can without signing up as a business builder. More companies should work this way.
Roxanne Green
I love my boss because she is ME!!
I think you need to just be honest and up front with people. The company needs to have a plan for people only wanting to be a retail customer and then a plan for building a business.
I think the plan many companies have in place for retail customers to receive 20%, 30% or more hurts the people who really want to make $10,000 per month. The retail customer may benefit and the company definately benefits with this option.
The retail customer just sells to others at their cost, but I don’t see how it benefits the business builder, especially the part-timer. It seems great at first, but it creates a saturated market of people buying wholesale for themselves and their friends and family. It makes the person who tries to make a profit look like they are charging too much.
Been there, done that and I am now in a better place.
Brenda Bunney
http://MLMSuccessBunney.com
http://BrendaBunneyMLM.com
brendabunney@yahoo.com
No Promises, No Problem
Honesty is the key.
Any business is hard work. Not all will succeed or even want too. But what if you do? I have a business that allows me to make my own hours, to be a stay at home mom and yet earn an income that helps my family. Do you know anyone who would like to learn about a company like that?
I don’t twist arms, push, or pull hair. Just do it Kim’s way.
Nancy Carlson
http://www.perfectmombusiness.com
I partially agree with the above statement, “The products have to be able to stand on their own and also be in line with pricing of similar products offered on the shelves of stores.” I think this applies to SOME products, but not all.
I was once told that if you try to sign up people as customers, the first time they run into financial problems, they will cancel their autoship, that you have to go after the business builders to make it all work.
Well, I’d rather reach out to professionals and show them the business plan, but they first want samples, something which USANA doesn’t provide inexpensively.
If I didn’t have to pay so much for samples, I think this approach might work for me, and I’d think about business building again.
My two cents.
For what it’s worth, Usana does have a “Preferred Customer” program – and we’ve signed up over 150 people in this way. It costs nothing to become one, and as long as you have at least one item on your autoship, anything you order comes to you at the deepest discounted price. You can’t get much more convenient than that.
Chris DeSantis
Utah Weight Loss & Natural Hormone Clinic
It appears that the company that I am with has positioned itself somewhat differently than the typical MLM. Having said that, we are really not that much different but present ourselves more in line with Kim’s teachings. It seems like when we get in trouble, it is because of how we have presented our “opportunity” and have not been honest about the effort and investment needed to succeed.
First, although my company is a MLM, we act as a hybrid type of co-op that provides competitively priced products and services to those of us that want to be proactive about our health. We join as members at no cost and we all pay the same “member” prices. For most, participation ends here.
Second, as most businesses, we actively seek referrals but unlike most businesses we reward our members/customers for those referrals. Those rewards are calculated using a MLM structure that shares profits in proportion to the volume for which a particular member is directly or indirectly responsible. (I think Keller Williams is “rewarding” their real estate agents in a similar manner) For a few more participation will end here.
Third, we provide the option for members to buy from us at wholesale and build a profitable retail business. This point is one that is rather new for us, but in my opinion is very important. Kim’s “numbers” tell me that 10% of people will be interested in our products but only 2-3% will build a profitable network. In most cases it would seem that I start with customers, some of whom (after developing a passion for at least one of our products) will become retailers. And some of those will see the possibilities of building a business team made up of customers and retailers. Am I wrong, or are we playing against the odds if we are being single-minded and only looking for team-builders? As a company (and my team) we need to move product to make a profit.
Finding retail customers and retailers is not as dramatic as showing the theory and income of team-building. Team-building would “appear” to be a faster way to the money, but if so, only for a very few. If most people will stick with us if they can make $500 a month, it seems that building a customer-based business is not only the fastest way, but a way that almost everyone understands.
Of course every so often we will come across someone who catches the bigger vision and wants to jump right into team-building. But again if Kim’s “numbers” are right that person will have to work with those who just want to be a member or a retailer. It seems that even the potential “big-banana” will need to build a small retail business so as to teach others.
As all business, you’all and I sell a product or a service for a profit and without customers it just doesn’t work. In all Kim’s CD’s, posts and books what I’ve learned is that the mistake is to think everyone wants to be a “big banana” and we as an industry try to over-sell that concept to the point of laying the foundations for reports such as appeared in WSJ.
If we present our businesses in an up-front manner which is not only honest, but in manner that is “simply enough for a 13-year old to understand”, such reports should have no traction.
Sam
seo@mindspring.com
>How do you think we can present the business in a way that is consistent with the way it really is?
How’s about something really radical… like simply TELLING THE TRUTH.
😉
I am a past USANA distributor who actually did quite well for myself. Been on the stage at Convention a couple of times. Love the products, and still use them.
I started to lose “faith” in the business when I noticed a distinct change from a focus on the quality of the product (which is what attracted me to this company in the first place), to signing up new distributors. Recent promotions such as encouraging distributors to place autoships for large quantities of expensive “vanity” magazines to pass out (“2 a day will pay!”) really turned me off. The latest “new” product (a fruit bar) and shabby way it was promoted also bothered me.
This, and now this recent investigation. I read the report, and although I can poke holes in 75% of the arguments, there are still some things that really bother me.
I’ve lost my faith in USANA, and somewhat in Network Marketing.
This is what happens when we let hype get to our heads. When I was active, I was always coaching my team to stop the hype, to not just parrot what is in the marketing materials, but rather to speak from personal experience. A focus on solid, autoshipping customers to build a base income (which is what I did).
I don’t think that the current management at USANA can change this trend, because they have too much invested in the “status-quo”. It would take a lot of courage to change at this stage, and embrace this “new school” approach to marketing that is so essential for success in 2007 and beyond.
Oh well, at least I have the products keeping me healthy! Keep up the great work, Kim. I can only hope that distributors who choose to build a legacy in this industry will heed your message, enabling them to hold their head up high no matter what the parent company does.