If Network Marketing Is So Great Why Do So Many Fail?
I was checking comments on my Youtube channel yesterday when I came across this comment:
“Question about MLM Industry in general …
Product lines in MLM and the opportunity that comes with it seems very inviting on the surface. Why is it that MLM industry shows very poor results? Only such a small percentage of people get rewarded for their efforts? Recruiting is one thing and just one side of the MLM coin.
Attrition must be overwhelming.
Why is that?”
I thought this would be the great foundation for a blog post and hope you find the discussion insightful.
Success And Failure Both Start In The Mind
Mindset is one of the most critical elements in the life of the successful entrepreneur. Mindset is also the most critical element in the life of the failing entrepreneur as well. Everything begins and ends with your mindset.
Let me give you some insight into some of the mindset traps I encounter day by day that are causing people to fail in their MLM businesses.
The first mindset trap comes in the form of perception. Those who succeed in MLM wholeheartedly understand that they have chosen to engage in a business and they talk about their network marketing efforts in business terms. I find those who are failing generally describe their business in these terms: “I’m in xyz company…..” or “I decided to give xyz a try….” or “I was doing abc, but I didn’t make any money, so now I’m in xyz…..” Do you notice the difference? One is treating their business like business person and the other is treating their business like a recreational hobby.
The second mindset trap deals with the issue of commitment. Those who succeed in their businesses have a high level of commitment to that business. In my case, I have been in the majority of my business ventures for 2 years or more.
Have I had months where I didn’t make dime? You bet!
Was that a reason to quit? Absolutely not!
The beauty is, I’ve been rewarded for my staying the course. Each month I get deposits to my bank account, simply because I stayed in the game. Staying power is key to your success. Unfortunately so many come into network marketing with a short term view. Week after week I have people sign up into my businesses who tell me about all the great things they are going to do. 30 days later they’ve already quit the business, because they didn’t find success. Sadly many have associated MLM as a “get rich quick” vehicle. Admittedly, the industry bares some of the blame, because we glorify those who move quickly to the upper echelons of the business. The reality of the business is that those who consistently achieve success are those who have chosen to stay in the game the longest. When I started my investment advisory firm 11 years ago, I put together a series of plans short, medium and long-range. I do the same in my church planting ministry, every church being started with a plan that leads many years down the road. Amazingly when I get on the phone with other network marketers and ask about their plan, I’m met with silence on the other end of the line…or the words “I don’t have one.” The first step in commitment is to make a plan and stick to it….even if it seems like it is not working at first.
The third mindset trap deals with a flawed sense of reality. When I talk to MLM business owners who are struggling or are just getting started, I like to ask a couple of simple questions:
- How much money do you want to make?
- How much time are you going to put into your business each week?
- How much money are you willing to invest right now into tools and education?
- How much money will you be spending on marketing each month?
Most of the time I get an answer on the first one and more often than not it is $10,000 per month.
When I ask the second question there is generally a pause and the person has to think of an answer (shouldn’t this already be thought out?).
I typically don’t get an answer to the third question (helpful hint: when someone has an answer to this question, my interest in them goes up exponentially). The reality is that most network marketers have never even given thought to this. As a financial adviser, I knew what I needed to be spending on furthering my education and improving my efficiency every year. This was built into the operating budget of my business. Sadly, most network marketers have not even considered what they need to spend on something as simple as business cards.
The fourth question is much like the third (helpful hint: when someone answers this and question three, I will move heaven and earth to get them on my team…they are the real deal). The concepts of marketing and advertising are so foreign to most MLM business owners…again the industry bares some blame on this one too. The truth is network marketing is a numbers business just like any other business. If I know that only about 3% of those joining a business typically do something with it, then I need to have a marketing plan that helps me find those 3% people much quicker (this is why I use the internet as my primary recruiting tool). An individual who has established a monthly budget for themselves is displaying proper mindset, commitment and an appropriate view of their business.
Understanding The Process Of Business
Too many who enter the network marketing industry, come in with a Field of Dreams mindset that says “If you build it they will come…” They have somehow convinced themselves that if they will just join the MLM and get their replicated website, that thousands upon thousands of people will come running with credit card in hand. Nothing could be further from the truth.
Business is a cultivating process. Simply starting the business is just the foundation, you have to complete the process to see productivity. Each month I invest in tools, training, marketing and advertising. I understand that not every person who lands on the website is a buyer, nor is every person I talk to a team member. I also understand that it is the daily commitment to these practices that turns the numbers in my favor. If I consistently bring people to the site and I consistently talk to prospects I will in turn find a large number of customers and team members for my business; however, if I quit doing those things or I do not do them over an extended period of time, I will simply be another failure and cautionary tale.
So What About You?
So let’s talk about you. Take a hard look in the mirror are you an entrepreneur or someone living in a warped reality looking for the magic bullet to solve all of your financial woes? Your mental state can be easily diagnosed through the 4 questions I listed above.
To those in the industry with me, I think it is critical that we talk openly about the realities of operating as a small business person. The truth is, it would be better for some people to never get involved, because they simply can’t make the mental shift. I have come to a place of peace in telling people that my business is not for them and even that I will not work with them, simply because I choose to align myself with other entrepreneurs. The harsh reality is that entrepreneurs will make money with me, while pretenders will simply suck up all of my time and never make the adjustments necessary.
In closing this is also an open invitation. If you are an entrepreneur….who is all in when it comes to the pursuit of your dreams, I want to lock arms with you. Go to the Work With Carl link at the top of this site and schedule an appointment, so we can change the world together.
P.S. Every new or struggling network marketer should read Your First Year In Network Marketing by Mark Yarnell for a realistic look at what it takes to make it in an MLM business.
