A number of you commented in the USANA ‘looks worse’ story, that folks like Jane should have done her due dilligence, and have made a business plan before she started out.
Of course that’s a reasonable question: What’s the responsibility of the person signing up?
OK let’s see how good we were back then.
1. How many of you, honestly, did some due dilligence on your company, and made a busines plan 12 months out, when you first signed up?
2. How many people do you know who fit the profile below? And what are their chances of success, based on the questions the person is asking? (From a USANA discussion board):
“I’m reasonably intelligent, motivated, have 10-15 hrs a week to dedicate to it, have a decent circle of friends and acquaintances, but have NO background in sales.
I would like to make a go of it, but I’m not sold on the REALITY of actually having it end up a profitable and worthwhile project for me.“Bob Allen (USANA rep) touts (in Multiple Streams of Income) that if things go ‘according to plan’ a newcomer in the business should have checks ‘large enough to get your attention’ by the third month.
“Questions:
“1. How much would I reasonably expect to make in my third month, if all goes on par to how it ought to go…?
“2. How much would I reasonably expect to make in my 12th month, if all goes on par to how it ought to go…?
“3. How much would I need to initially invest to get up and running…?
“4. How much would I need to continue to invest monthly to keep myself running…?
Answers or feedback would be greatly appreciated.” –Jim
If the question is the answer, how good are these questions?
Your thoughts?
Kim,
You’re the best… you really get us all thinking about this biz and how we conduct ourselves and influence others.
MLM is unlike any other biz model… so I don’t think you can ask theoretical questions like how much will I make in X month if I do such and such.
Because MLM is a radically different biz model, and a totally different culture than standard cut and dried JOB hours and lifestyle.
We join a community of people and align to that group physically, emotionally, mentally. We work from our homes during our family time & personal time hours.
Spouses & children have to be accommodated.
Most of us are doing personal growth programs.
We are learning a wide range of new skills… so we are all topsy turvey within ourselves.
And maybe we entered the MLM arena due to personal crises – such as job loss, money crunch, or other upsetting situation based on personal urgency.
Plus LIFE HAPPENS: birthdays, funerals, accidents, storms, vacations, etc…
So the MLM biz for MOST distributors is a fully-engaging life process.
So I find for myself, as well as my active distributors that their MLM career and evolution is not really quantifiable nor predictable.
Sometimes the personal growth requires people to take “sabaticals” from their biz to do their transformation work.
MLM biz is NOT cut and dried. It is more like an OUTWARD/INWARD BOUND ongoing life workshop. And the measure of success are not the same as for an employee slot.
Pat Crosby
http://NETWORKwithPAT.blogspot.com
I question the Robert Allen quote. Did anyone check to see if she quoted him accurately? That seems like an unlikly comment to me. At the same time, considering that most businesses require a lot of money to get started, and there is no turn of a profit for several years, Robert Allen, if he DID say that, might mean that given that you made any money, it would get your attention.
Most people live from pay check to pay check, and are $500 away from being on the street. So maybe even a couple of hundred dollars would catch the average person’s attention.
Regardless, point well made regarding due dilligence and planning. This IS a business, not the lotto. It does require some forethought and action.
Thanks for keeping us on track, Kim.
Thanks Kim, for these worthwhile discussions.
I think there is responsibility all the way around. I am one who took peoples word for what my Comany was about, did not fly to check it out, am still here after 5 years and life gets in the way of my working on my business all the time.
I love this Industry and Kim’s teachings will help change the bad press that MLM has. We all need to let our prospects know the truth and not gloss over what this is about. They are responsible for due dilegence, but we know our prospects well enough to know when someone doesn’t have a clue. In that case I would try hard to have them get in for a small amount of money to test the waters. I am not responsible for them, but I would feel responsible if I talked them into “the big package”.
I always learn something when I read these discusions. thanks to all
carol
Kim, You are losing credibility, along with Barry Minkow. I know that this topic is great “fodder” for your web site, but to “pile on” a company that has higher standards than most MLM’s makes it obvious that you do not really know much about USANA. It also has an unsavory shadow of bias. After all the negative assumptions you’ve made, you owe it to USANA to visit the company and then give a review. The stock analysts changed their opinion after getting the facts. Perhaps you would too.
Kim,
Yes, what is the reps responsibility?
To be honest and….you can only base your reply on what has worked for you personally, what your income has been.
Then you are following the Kim Klaver golden rule: No Promises, No Problems.
Yes, there are a lot of a variables and as a sponsor of a new representative, you cannot predict how well or how successful your new person will be.
But you can tell them what you have done and where it has gotten you.
Representatives can answer these questions honestly if they base their answers on their own personal experiences.
Isn’t this what you are teaching us in the New School system.
Base your answers on your personal experience. Don’t make promises to people that are not true.
If something sounds too good to be true it is. There are no shortcuts to building an honest, ethical, business.
Regards,
Erin Ely
http://www.elyorganics.com
Listen to Robert Kiyosaki. He states plainly and up front that a network marketing business can take 5 to 10 _years_ of consistent, diligent work… but that the ultimate payoff of residual income beats spending the same amount of time trading hours for dollars. Jim Rohn says much the same thing.
In this business, slow is fast.
I think each person is totally different and you never know what to expect from downline members.
“Team members are like a box of chocolates….” (lol)
There is no way to guesstimate what someone will make their 1st month, 6th month or 12th month as we have no way of knowing what energy they’ll focus on their business.
I have 2 people on my team who started January this year, both are at the same level, with the same amount of team members thus far.
Person A) Her residual check is 4x the larger than person B AND she is also making several hundreds of extra cash each month doing sales. She puts in about 15-20 hrs per wk.
Person B) Has a smaller residual check and complains that she is NOT making any sales. She says her team is not performing and that she’s not having any luck. She says she puts in 40 hrs a wk.
The diffrence?
Person A) has zero network marketing experience is putting in the elbow grease, marketing her website, pounding the pavement and not taking ‘no’ for an answer. She has her ‘why’ in place and will not accept failure whatsoever.
(she’s a home mom of 3 kids)
Person B) says she has over 20 years network marketing experience is fluffing time, but not marketing her site or pounding the pavement. She’s waiting for the business to come to her and not bringing the business to her. (she’s a mature woman with no rent/mortgage and her kids are grown)
You’d think it’d be opposite…
An unexperienced Network Marketer vs one Seasoned in the industry. What it comes down to is the drive for success, the burning desire to succeed, the flame within. I believe ANYONE can succeed in this industry no matter the education, race, sex, etc… It’s the INSIDE, the drive that propells them.
When there is a supportive upline there is no excuse for failure other than themselves. Even with a non supportive upline (I had to go up 4 levels to find my mentor!)
I teach low cost and free promotion methods to my team. I do not encourage any extra expenses. I show them how I maintain a top ranking site with $0 advertising dollars per month etc…
Person A) She’s rocking and will let no excuse get in her way.
Person B) Wants to rock, but makes up every excuse in the book.
I have provided both of them the exact same tools, the exact tools all of us in the company have. It’s how you hold the hammer that will yield your results.
So this is where I say when a rep is provided a full tool box and business building plan with training and they don’t get building that business because excuses get in the way, at that point it is the reps responsibility 110%…
There’s no shame in my game, as they say . . . My answer to your first question is a resounding ‘NO’ to the business plan, although I did the due diligence part.
With regard to your second question: I have yet to meet anyone who fits Jim’s profile. Whether he’ll be successful . . .? Well, let’s see . . . I could answer questions #3 and #4 for Jim, but #1 and #2 are really quite subjective, aren’t they? Doesn’t it all depend upon the person (in this case, Jim) and what they are (he is) willing to do? Actually, Jim’s mindset, to me, doesn’t seem quite ready because he states right off the bat: “. . . I”m not sold on the REALITY of actually having it end up a profitable and worthwhile project for me.” Seem like he’s going in for the short-term, doesn’t it?
Ok, let’s be real here and start with this question instead . . . How many of us even knew what a business plan was when we first got started? Or how to even go about creating one? Aside from the standard ‘plan’ that our companies/uplines taught us: “Just get 2, 3 or 5 and teach them to do the same . . .”
Then there’s the goal setting we are taught to do: “Dream BIG, write it down . . .” or “What’s your WHY for doing this business? Write it down.”
I did all that writing in the beginning and it doesn’t make a business plan. It’s a starting point, but certainly not a PLAN.
Kim, on one of your calls, you asked the question: “What does it take to make X number of dollars?” Many of us didn’t know the real answer. And until that call, I didn’t fully realize either. So, if a new rep doesn’t know the numbers that are required in terms of volume or total sales in order to earn X number of dollars in commissions, how does one make a business plan without that vital piece of information?
And then there’s the ACTUAL WORK that is required in order to “Just get 2, 3 or 5,” never mind the additional training to teach your new reps to get their own 2, 3 or 5.
The questions Jim asked above are indeed intelligent sounding questions, but I neither asked them back then when I first got started, nor could I have answered them. Of course, if you’re someone who lives by PLANS, then maybe those are realistic questions. But I kinda doubt that most people could answer those questions when they first get started. There’s too much information that is missing to even know how to complete the business plan.
A Johnson Enterprise
It’s up to the sponsor to make sure the newcomer to this busiess is presented with the facts. You can’t blame it on the person coming in.
I coach people every day. I hear things like “I consider myself fairly intelligent and I can’t believe I got sucked in by this (company/upline/scam).”
IT’S NOT YOUR FAULT. Someone lied to you. Whether that lie was intentional or not, that’s not the issue. New reps are lied to in this industry on a daily basis.
It’s up to US (the SPONSORS) to make sure we are building a solid foundation of people who know exactly what to expect. It may take longer to build it, but it’s worth it in the long run.
I could sponsor people all day long, just like the “heavy hitters”, but when you have to close someone to get them in the business, you have to close them every month to get them to work. What kind of residual income does that create?
I want my business foundation built on SOLID ground. That means I must be honest and up front with people when they join. Otherwise, they are gone in a couple months and I have to “close” more people to take their place.
Do it right the first time. BE HONEST. Tell people exactly what they need to do BEFORE they join. For example, in my company, we make approximately $25 per person on a 100 point autoship, so if you want to make $2,500/mo., you need to find 25 regular users of the product.
Of course, that’s not including bonuses and fast start monies that you get on a business builder’s initial order. I don’t focus on the fast start monies because I don’t want my people signing up anything that breaths just to get that fast start money.
It all starts with YOU!!!
Make it a great day!!
Roxanne Green
Network Marketing RULES!!
True, Jane should have done her reseach. Anyone investing time and money should know the expected outcome and how it will be reached. Jane felt the products were too expensive. If she didn’t believe in the products, she should not have chosen that business.
But, Jane also probably had no reason to doubt her neighbor and her advice. If a neighbor, family member or friend, says “do this, you’ll make money. I am.” Are you going to assume they are lying to you or a partial truth? Generally not. It would be hard for a potential recruit to know what questions to ask.
It’s the responsibility of the recruiter to make sure the person knows what they are getting into. Unfortunately, there are too many people focused on just getting someone enrolled and not whether the enrollee really understands the business.
I don’t think it’s fair to blame her. Most of us heard or read how we could make real money with little effort, or little overhead, or little training, and off went the thoughful consideration and the little green sign started to flash. I have been friends with a USANA distributor for some time and routinely heard about the “smart” compensation plan. He is a successful businessman who was looking to replace his six figure income with a more satisfying and rewarding business. Everything he has told me has made it apparent that he is signing up customers who hope HE will do the work to make them money without any effort. Some of his people told me even though they aren’t making “real” money, yet, they do get enough to cover the cost of their supplements. He has thousands of people in his group, spends many extra hours recruiting and after 2 years, makes about $1500 a month.
I don’t think many of these people question what they are told, which is what someone higher up told them, who don’t question what they are told. And so it goes.
Network marketing resembes our society at it’s worst. Most of us don’t question what we are told; we take a lot of it at face value. Look at how we vote, how we buy and what the state of our finances are. I know this won’t be a popular post but I stand by my comments. WE have recreated the worst of ourselves in some of these MLM models and then we try to blame everyone else. We need to shoulder some of the blame ourselves. Yes maybe she should have asked more questions, done more investigation and so should her recruiters. But, I bet many of us and many more of the drop outs never did either. I spent months investigating the industry and the company I went with and still I continue with the business, even though the overwhelming fact is that most of us won’t succeed and will end up spending money to be involved. I just refuse to accept that all those facts apply to ME. Isn’t that how many of us think about this business? So at least, lets be honest and quit signing up people who need therapy, as Kim says. We also have a pretty good sense about who shouldn’t be signing up. It should be a little more difficult to become a distributor. We have to temper our greed and start exercising more caution when it comes to signing people up who are not qualified. Lets face it: When the US army recruiting videos show a guy playing with a remote controlled airplane instead of dodging a bullet in a hostile war zone, what we are doing isn’t much better and it’s at least as dishonest.
I did do due diligence when I first started, but I already knew about the concept they were marketing (which is what attracted me in the first place) so it wasn’t that tough. Plus the only investment required was the cost and time of getting a license so it wasn’t like I had a lot of money at stake.
Every great investment guru who has really made money (and is not just a researcher) will tell you that the first thing you evaluate in a company are its people. If management isn’t right it doesn’t matter how great the concept or product is, that company is headed for trouble.
I met the big wigs and knew I was in the right place. I also knew they were controversial and might not survive but that didn’t matter to me. They were doing what was right, and if we went down doing what was right by being crushed by the behemoths in our industry for exposing their rip off products then so be it.
Crusaders die hard and I was a crusader (and still am) through and through.
Didn’t have a business plan though. I had come over from a direct sales company and the only business plan I needed was to know how many presentations I needed to get X amount of sales and how many presentations I needed to get X amount of recruits.
I started with the company ratios and then, by keeping meticulous records, developed ratios of my own.
The company never lied to me. They laid out honest numbers (which were daunting) in terms of what it would take to make it in this business long term. They made it clear in no uncertain terms if you didn’t recruit *and* sell while recruiting, you would go broke while trying to build your business.
They pointed out that you shouldn’t even consider not being a personal producer (and just living off overrides and residuals) until you were cash flowing at least $10,000 a month. And at that point, when you could open your own office, they did have a business plan for you that you would tailor to your own goals.
They never said it was easy, in fact they said the exact opposite. It is what kept a lot of us around. We knew it was tough but we also knew it would be worth it.
Nobody could lie either about what they were making because every month the company printed out the income of all the people in the company. Thats right. Anyone who made any money that month would show up on the leaders bulletin. No pulling the wool over anyone about how well you were doing.
However I had just come from a direct sales company where I rose through the ranks to open my own office. But I didn’t know how to easily transfer what we were doing to where I was going. We ran ads that attracted about 30 people a week to a group interview. Out of that we would end up with about 15 people who we trained classroom style for a week. Then that weekend we would send out about 10 with a trainer to do their initial sales calls. Only a few would stay long term, and so we did this every week without fail.
I wasn’t savvy enough to figure out how to transfer the process over, partly because I was starting over at the bottom rung (there was no mechanism to “buy” into a higher commission level). Like most companies my new company was big on warm markets so I didn’t have much support for anything different. I tried a little later and realized that going into the cold market doing group interviews was operating a business (unlike typical direct selling) and it would cost a lot more money than my time and effort. We had some initial results but we really needed to do some tweaking to get the caliber people we were looking for. Unfortunately we abandoned our efforts much too soon.
The funny thing was that a couple of years later a guy came into our company, 19 years old with absolutely no market, and built a huge market by slighty tweaking the concept I had used at my previous direct sales company. It would take me 20 years and 3 companies before I finally came up with my own tweak that works in the cold market consistently for doing group interviews!
Well enough of that. I think all parties to the process are responsible. I don’t doubt that many if not most people get involved without much due diligence. My issue is that when things go wrong where do you place the blame? If you place it outside of yourself then I believe that is wrong. We are all free standing moral agents. Nobody puts a gun to our head. It is bad when people get caught up in hype but it is equally bad when we try to blame others for our own decisions. This doesn’t let the hypsters off the hook, they have their own responsibility for what they did or said. For that they should be blamed, but they shouldn’t be blamed for *our* ultimate decision. If you do something because someone you trust recommended it, fine. But be prepared to shoulder the responsibility if things don’t go right should you make a decision based on that trust.
As for the questions, only the last two can be answered. And we should all have answers for our new people when they sign up.
The first two questions are the great variable. There has not and never will be a test devised that can look inside a man or woman and tell whether the heart of a champion beats there. Sure we develop ways to filter people out, to not do therapy, to get away from the forever maybes and so on. But in the end we just don’t know until we know.
Thats the view from here,
Michael
http://www.uptownonthebay.biz
http://www.grmbeyond.com
http://www.uptownonthebay.net
http://michael.networkmarketingcentral.com
I don’t know much about USANA or why Robert Allen is a rep or said the above. I did read his book The Challenge.
From his web site:
“Anybody can do it. Send me to any unemployment line. Let me select someone who is broke, out of work, and discouraged. Let me teach him in two days time the secrets of wealth. And in ninety days he’ll be back on his feet, with $5,000 cash in the bank, never to set foot in an unemployment line again…”
Well, it worked. Almost. Over 100 people came to his stage 1 presentation. 45 to stage 2. He selected 3. Two of the three made it in ninety days. The other came close.
Can anybody do it? Maybe. Will anybody do it? No. There is a very interesting discussion in the book about “the eye of the tiger”. What he proved is not that “anybody can do it,” but rather “If you do big numbers, you can find an ace, or a mini-ace, in any demographic group — even among the broke, discouraged, and unemployed.”
Why did the challenge work as well as it did? Because he didn’t waste any time trying to drag people accross the finish line. The final candidates selected themselves for the challenge when he called their name.
Every rep has the responsibility to treat the person they are signing up with respect, honesty and integrity and to tell them the truth about how the money is made. It’s important to know how much money THEY want to make in their first month and then work it backwards. If a person told me that they wanted to receive a $2000 check from my company the next month, I would tell them that check would be the result of having sold $5715 in retail volume THIS month. And what that could look like. It could be six group presentations with an average of $1000 in sales per presentation. It could be the person talking to 100 people that month and asking for a $100 order and having a 50% success rate. It’s simple, yet it is not EASY or everybody would be doing it. If they said they wanted a $2k check and only had 3 hrs a week to work it; well, then what did they want to do with those 3 hours to actually work the business? $2k for six hours a month is in my opinion a “pie in the sky” type goal. I would much rather have them shoot for the $5715 and end up at $2k in volume and focus on 2x2x2 a week. Two people a day, 2 classes a week and sposoring 2 a month.
The money will come..if they work it…not because they are heavy recruiters/pushing people to buy large sums. I talked to a USANA rep and the bottom line was if you join you get 10% off the price of the product and if you want 20% off the product price you have to “BUY into the discount level” to “make more $$$.”
Sorry, I’ve never liked Binary Compensation plans and will not ever be part of a company with that type compensation.
I don’t know if Robert Allen said that, but I do know that he says Usana is his “best stream of income”, better than his real estate or anything else!
And as far as Binary comp, I think a few “minor” details were left out above. You don’t simply get 10-20% off your product, you get 10-20% commission.
Your product is priced the same a your customers, and you don’t get commission on your qualifying purchase, only on product over and above that amount.