People say they come into network marketing to earn some money. Some say they seek “financial freedom.”
Despite those goals, we’ve pretty much maintained a 95% drop out rate. And most people who quit are financially upside down. So much for financial freedom.
Question: How many people do you think would quit if they were taking in $300/mo steady income?
How about $100/mo? How many would quit then? Anyone?
Ponder this: how much would you be making this month if 90% of the real people you ever signed up were doing enough volume to earn themselves $100/mo?
If we got them at least to $100/mo, how might that impact the drop out problem?
Next trick: How do you earn $100/mo regular income? Residual. After all, that’s our edge over working the make-up counter at Macy’s, isn’t it? Your thoughts?
The question could have been better formulated like this:
“Do you think more people would stick with it if they took home $300/mo of steady income?”
Because there will alway be people who are going to quit, no matter what they do.
But if they can generate a few hundred a mon in less than 6 months, I definetly see that we would have more people stick with the program and talk about it more enthusiasticaly.
Yves
http://www.NoPainMoGain.com
Hi Kim,
I think that perhaps you have a good point here. Many people are just looking for some “mad money”. That’s what I heard today from one of my Representatives. This person “joined”, went a whole year without hardly ordering anything, and just renewed her account today.
In the mean time she has jumped from company to company trying to create some “mad money”.
She has not taken any time to learn about the products, review the website and look at our training. She essentially has put no time in.
Right after she joined with me (a year ago) she went off to another company where the new sponsor promised her a lot.
She ended up quitting because her sponsor was pressuring her to do things that she did not want to do.
Spend a lot of money on cooperative ads, go to conferences, come to weekly meetings, etc. This did not fit for her situation. She has two small kids, a part time job and she does a lot of volunteering at her kids school.
So, if I can help her create some “mad money” then that would be great. Maybe $100 to $300 is enough for a person who wants to have some “mad money”.
My first recommendation to her was to get your Products book and the 3 scripts CD and reorganize her thinking and approach on creating an income from a business like this. Before she runs out and starts advertising or anything else.
I see my job as support and to coach her along the way. To answer her questions and help her to create a system/approach for herself that will meet her goals.
Regards,
Erin Ely
Get 6 Customers!
Or the old 2 who get 2 it doesn’t matter where they come from your personal aquisition or some one else. With our company all you need is for your cleint to get 6 people enjoying our products and there is a residual of $100.00 which off setts the cost of personal products.
Appreciating you as always.
Billy M
Wellness Coach
http://alifeunlimited.com
Kim, I need more data!
How many hours a week go into making that $100? Is this before or after we have placed our own monthly order?
We don’t get commissions unless we
buy too.
Money may help some but it isn’t everything. I’ve seen people drop out who were making $1000 a month and earned a car, because they hadn’t earned 10,000 a month. People drop out because they give up, because their friends don’t respect what they do, their family makes fun of their “thing”.
The company I rep for keeps stats on most everything and claims that statistically if an associate is earning any amount at all they will stay in the business.
All the best,
Glenn
glennjaffas@prepaidlegal.com
I personally believe that if people could earn a monthly residual check of at least $100 (being in the ‘black’) the drop out rate in our industry would significantly drop.
The trick is to figure out what a person has to do to get to that point. Of course it is different from company to company, but I think it is a real attainable goal. What is hard is that people often think they can do that by next week and if it doesn’t happen they quit. It takes a while to get to $100 residual income. What we as sponsors need to do is to sit down with our new team partners and explain that and help them reach that point.
I have noticed that those people in my group who got their first check quickly are still with me today. Of course they worked for it. Those who joined and waited for the “Happy Truck” to show up and dump a load of cash are long gone.
Randy and I work with our people (but not all want to work ;o). We tell our new people…”it’s like riding a two-seated bicycle. I’m sitting in the back and I peddle just as hard as you do. When you slow down, I slow down. When you quit, I quit. When you start up again, so do I…and when you are heading for the cliff, I will jump off.”
Definitely though, $100 residual would stop a lot of people from quitting. Also, it’s a great motivator, because you’ve gotta think…”I got to $100 residual, I bet I can get to $200…$300…$500…”
Have a great Easter y’all!
Ilka ;o)
Consistant hard work, just like any other new business entrepreneur will give us the rewards we are seeking.
Nancy Carlson
http://www.perfectmombusiness.com
I don’t know many people who would give up $100/mo.
That’s extra income.
Roxanne
I believe industry statistics say that $200/month is the magic number to keep people magnetized. $100/month will just cover the autoship for most companies, so the distributor is basically breaking even at $100/month – ie a wash.
But $200/month means there is something left over to do something with. Now THAT is exciting.
After working 7 years with a company that then cut my commission 80%, I am VERY HAPPY to now be working with a company where the average WORKING distributor is making $200/WEEK !!!! YIPEE :))))
http://LAUGHwithPAT.blogspot.com
I stayed in NM years ago with another company for 7 years and my husband and I were not even making $100/month. We definitely were in it for the association and the dream of making it one day.
Of course we were a bit deluded to stay in that long and not make any money. We were raising a young family 3000 miles away from home and were having hard times.
It was the feeling of belonging and being a part of something that kept us in. We really liked our up-line and our crossline. We are still friends with several couples we met in the business.
We also liked the fact that we were improving ourselves, reading good books, learning about the principles of entrepreneurship.
Those years were the foundation of what we are today. We didn’t grow financially, but personally.
$100.oo month means $1200.oo/year. What investment do you have that brings that in for you?
Wouldn’t that be the same as having $20,000.oo in an account making 6% interest? ( someone might want to check those figure to make sure I got it right )
And if this person is running a business legitimately they can also have tax deductions for having a home based business.
I just did a little webinar with Sandy Botkins who is a former IRS attorney and CPA. He said anyone would be brain dead not to have a home based business. There are so many legitimate tax deductions to make it all worthwhile.
So, to be safe, you probably need 20 customers. If at least 10 of them buy in that month and make you at least $10 per order, you could make the $100/mo. Sometimes all of them don’t order, some fall out, some forget, etc…
I think that could be enough to keep someone in.
It’s not going to make you rich, but if you sock it away at a measly 3% interest rate that means
$13,944.80 in 10 years
$32,685.44 in 20 years
That’s not chump change.
I checked that on a regular savings calculator.
Dianna
Sure, most people would stay if…
1st – they are using product that they will buy anyway. So why not to have it for free with a $100 bonus?
2nd – if they are found way to make $100 today, they will sure make more tomorrow because they can teach somebody how to make $100 using this wonderful product.
3rd – they will enjoy the warm support and friendship from sponsor, who are interested to help them make even more money…
The Big Question is: How to make this first $100?
The sure way to earn $100/mo – residual – is to attract people to something that you “love madly” and buying every month, convert them in “your religion” or to find people that already sing the same song, but don’t know that there is new continuation.
How to do this? Be creative!
My husband (my partner #1) write a book (it is in Russian now, but we are going to translate in English). The title is: “How to live to the age of 120 and avoid the Diseases of Civilization?”
Are you interesting?
First version of this book (self published) have helped us and our partners to build business with people who are really interesting to be healthy, live to 120 and be active.
You could say that not everybody can write an attractive book. OK, use our or some other good book. Use your imagination. Organize Beauty Pageant for people who is going to lose weight, if you are market weight loss product; or for Cats, if your product is Pet Food. Be creative! And the most important: help your people not only to duplicate your way but to realize their Ideas and make residual income using theirs Talents and Strong Qualities.
G’day Kim,
I answered ‘No’ to the survey, but feel the real answer to this dilemma is not so much “Would they stay (longer!) if they earned $100 per month residual income?” but “Would they stay ‘forever!’ if the business opportunity actually were able to deliver on it’s promises or Sales Pitch?”
By that I mean – Can the business allow a new rep to “Break even” (on the outgoing monthly payment) as soon as they introduce just 5 or less new reps? I.e. a 20% RESIDUAL “Commission” or “Reward”
After all most business opportunities are “Sold” on the basis that:
a. It is simple to do,
b. Anybody can do it, and
c. The prospect will make money within a short time frame.
In my view – if “Break even” is not possible or achieved within the first couple of months then the business will always face a high drop out rate.
However, if the compensation plan is set up for that then there really is no excuse for still having a high drop out rate other than having a poor marketing plan.
I say that because I believe such a comp plan should be intrinsically “VIRAL”! That is to say – it’s got to be so “Wanted” or “Sexy” that anybody who hears about it feels compelled to pass it on to their mates or colleagues! (often – regardless of gaining a reward!) In the case of You-Tube, Skype, Hotmail etc it was free and the benefits were greatly improved communication tools but hopefully every genuine NWM business opportunity is set up to meet a “Compelling Need” for a sizeable market sector.
I’m constantly amazed by NWM companies who create rules and conditions that make it more likely that the majority of their reps will fail to gain a real ongoing residual income just so they and some senior reps can reap a bigger profit.
Surely they can understand that it is better to earn a 5% profit on a million reps than 10% or even 20% on 100,000?
I guess what I’m trying to say is:-
If the current industry ‘modus operandi’ has traditionally experienced such a high drop out rate then why don’t we change the system?
Instead of working on the premise that every new prospect MUST ‘Prove’ themselves worthy of our business by introducing “Only” 2, 3, or 5? people in order to get started earning hopefully just enough to break even – Why don’t we change our attitude and actually work 2 levels down ourselves?
Thus, if I find someone who I believe is genuinely interested in making an extra income and who has a good network of contacts, then I should be prepared to actually prove that my business plan works for them by building their first level in order to ensure that THEY break even as soon as possible. I should be able to achieve this by getting their LIST of 50 odd names of likely suspects and then actively demonstrating the introductory process on them. If I can’t do that, then my system is not easy enough for the average person to work successfully!
In other words I should actually be prepared to build their (also my!) team to self sufficiency because I am going to be the winner in the long run! I know some will still drop out, but many many more will now stay in and work with me!
In most cases the comp plan will reward my effort for building a virally growing team!
This thesis has just been developed over the last couple of hours whilst responding to your Blog so no doubt there are many flaws in it BUT maybe there is the germ of common sense that is relevant to a NEW SCHOOL of NETWORK MARKETING?
A final comment!
The NWM industry has got to do whatever is necessary to raise the percentage of average ‘money seeking’ people who are successfully breaking even!
Only then will NWM be accepted as a real alternative to conventional Wholesale/Retail marketing.
OK I’d better get started on that course of action myself and see if it works!
Bill Birkbeck
Perth Western Australia (GMT +8hrs)
http://www.myvideotalk.net/20592
I’m always amazed at people who “dis” an extra $100 – 300 per week. Perhaps if they were bankers and understood that, to generate $100. per month RESIDUAL income (without touching the principal) at a decent 4% interest, compounded monthly (a “savings” account?), they would need $30,000.00(!) they would look at the true BUSINESS aspect differently. Build your business to where you are making $100. a month, and you have built an ASSET worth $30,000. $300.00? $90,000!!! Perhaps we’re just not doing a good job at explaining what an ASSET is, versus a “paycheck”. WHAT ELSE ARE YOU GOING TO DO, IN WHAT PERIOD OF TIME, TO GET $30 – 90,000 IN THE BANK? Perhaps if we could make them understand that they are truly building a business and not doing a “thing” they’d stick…
Thanks, all.
And Gary, yes, I too am amazed at those who ‘dis’ $100/mo residual. I can’t imagine anyone who reflects on this for even a moment, who would give that up. Perhaps the meaning of ‘residual’ was not clear to some folks.
🙂
I read with interest every post as this is a subject very dear to my heart (and pocketbook). I was one who voted no. I was seeing the $100 as a wash because most companies require a person to order which amounts to approximately that much or more. I’ve seen the present value idea of $100/mo and it is so true that most don’t look at the big, long picture. $100/mo above what one purchases would no doubt keep more in. Not many, I would venture, sock away the $100, keeping in mind what it would be worth in 20 or 30 years. It is spent right away and then a person thinks they “aren’t making anything”.
I loved Bill Birkbeck’s comments about how a successful rep should help their newbies to build their first level. It seems to me that to be truly duplicatable, this should include being around to help my first-level folks train my second-level folks (their first-level). And I think that a compensation plan can be structured to reward reps who do this kind of duplication.
– Gordon Burkett
Hi Kim.Oh yes people will quit
this business even if they are
making $100.00 a month but only
have a flicker of passion for the
product/s they are involved with.
Raven