Ten Reasons for MLM Failure
by Mike Waite

1) Unrealistic Expectations
2) Don’t Treat It Like a Business
3) Waste Their Time with the Wrong People
4) Don’t Track their Action / Progress
5) Reliance On Only One Marketing Method
6) No Follow-Up
7) Poor Marketing Material
8) Don’t Know the Product / Plan / Management / etc.
9) Not Teachable or Coachable
10) They Quit Too Early And Too Easily

1) Unrealistic Expectations

Some common misconceptions of Network Marketing and a Home Business must be dispelled:

Home Business and Network Marketing Success requires:

- Hard Work
- Selling
- Recruiting

There are no “secrets” – just the 4 Cornerstones of Business Success:

- Consistent Effort
- Work Ethic
- Good Attitude
- Vision

You are not going to make $10,000 in your first month with Network Marketing. You can eventually build up to that type of income. It will take you 2 years to build up to a full-time income (approx. $35,000 annual income). It will take you 5 years to build up to a six-digit income. It will take 10 years to build up to a seven-digit income. However, where else could you achieve these milestones with no experience and no training?

Here are the cold, hard facts of success in this industry:

- 1 in 8,000 people make more than $65,000 a year
- 97% of Network Marketers make less than $200 a month

Why? Because of the next 9 Common Mistakes in Network Marketing.

2) Don’t Treat It Like a Business

You must become a PROFESSIONAL. Your business IS NOT A HOBBY. You can’t work it only “when you feel like it.” You go to work when you “don’t feel like it” because you know you have to, you have no choice. You will not succeed in business until you bring the same level of commitment to it.

The difference between mediocrity
and excellence is commitment.

You will be tested. There will be days where you will not feel like it. The first 21 times that happens are THE KEY TURNING POINTS in your home business career. It takes 21 consistent days to break or build a habit pattern. A break of one single day (not executing the good habit you’re trying to build or doing the bad habit you are trying to break) re-hacks the clock: You must start all over again at day one.

One of the greatest advantages of Network Marketing is the Low Investment Required. That provides the leverage of unlimited income potential from very small capital to get started.

One of the greatest disadvantages of Network Marketing is the Low Investment Required. It leads to low commitment. If you invested $5,000 or all of the money you owned into your business, you would work it like nothing else. If you invest $100, you can think “Oh well, it’s only $100”. There’s not enough pain or loss associated with the failure.

3) Waste Their Time with the Wrong People

Too many Network Marketers do not properly understand the marketing progression of their business, marketing statistics (metrics), or attrition.

The Marketing Progression goes like this:

Leads –> Suspects -> Prospects –> Downline –>
Repeat Customers -> Business Builders

At each stage of the process, your goal is to “convert” a person into the next stage. We start with Leads. Leads are “converted” to what we call “Suspects” when you actually contact and talk to them – they are Suspects because they have not yet confirmed their interest (in the product or the opportunity). Suspects become Prospects when they say they are interested. Prospects become Downline when they sign up or purchase product. When you have a new Downline recruit, your primary goal is to get them to start using the product and then come back again as a Repeat Customer. Finally, your Downline members that actually go out and start duplicating your system will become your Business Builders.

There will also be attrition at every stage of the process, including within your downline. You will have people quit your organization every month. You cannot and will not avoid this. You can only mitigate the attrition rate by educating your Prospects before they become your Downline. Most Network Marketers quit early because of Unrealistic Expectations. Honesty and integrity are paramount – you must prepare your Prospects with the truth and facts of what it takes to succeed in this business. You will recruit less people with this strategy – but those you do recruit will go in with their eyes open, will stay with it longer, and will decrease your attrition rate.

Following are the standard conversion metrics for a “cold market” in the network marketing industry.

Leads -> Suspects: 33% (You will get in touch with one-third of your leads)
Suspects -> Prospects: 33% (One-third of the people you actually talk to will request more information)
Prospects -> Downline: 20% (You will recruit one-fifth of those who requested more information)
Downline -> Repeat Customers: 60-80%
Downline -> Business Builders: 20% (Only one-fifth of those in your downline will get serious about building a business)

What do these numbers mean?

You will need 225 Leads - to talk with 75 Suspects - and follow-up with 25 Prospects – to recruit 5 Downline – to get 1 Business Builder. 225 Leads = 1 Business Builder

How long will this take? You will go through, on average, 12-15 leads per hour. That will require about 18 hours of time to go through 225 leads and about 12 hours to follow-up with 25 Prospects.

The Total: 30 hours of time to find 1 Business Builder. That’s about 7 hours of action time each week.

But that time will pay-off with 5 new downline members (which will increase your monthly residual check) and 1 Business Builder. On average, you’ll add 1 Business Builder each month to your organization. Those are the people that are going to bring you real success. Once again, though, these are the averages. You will need to determine what your metrics and conversion rates are. And that leads us to the next Mistake.

4) Don’t Track their Action / Progress

Very few network marketers accurately track their action. They have no idea what their conversion ratios are. The statistics provided above are the industry average. They only serve as a benchmark. As a network marketer, you must know what your metrics are. Only then can you incorporate realistic income goals into your business plan. You do have a written business plan, right?

5) Reliance On Only One Marketing Method

You don’t want to put all your eggs in one basket. A Marketing Plan is like an investment portfolio: it’s important to diversify. Successful Network Marketers use at least Five different prospecting or marketing methods. This is what we call the 5-Point Prospecting System. Here are some examples of different ways to market your home business:

Phone, Direct Mail (Postcards, Sales Letters, Card Decks), Collateral Marketing (Audio CD’s and tapes), Website, E-mail, Classifieds, Referral Marketing (friends and family), Flyers, Business Cards, Bumper Stickers, Ads (Newspapers, Magazines)

6) No Follow-Up

Numerous sales and marketing studies have revealed that 60% of sales are completed after the 7th exposure. And here are some more telling statistics that reveal why so many network marketers fail:

96% of network marketers stop after the 4th contact

Successful Network Marketer have a methodical and structured Follow-Up System. We use and recommend the 7-Point Follow-Up System. Our system takes advantage of the “7th Exposure” statistic. We merge the 5-Point Prospecting System and the 7-Point Follow-Up System by accomplishing 7 contacts with 5 different marketing methods.

7) Poor Marketing Material

A large majority of network marketers have no idea how to write marketing material. If you have no idea about how a car works you can still know that you have a problem with it. But, you don’t just pop open the hood and start “fixing” it. Many business owners do exactly that with their marketing material and ad copy. Even worse, though, is someone who “knows” how to write ad copy, when they really have no clue.

Be wary of the “if it ain’t broke, why fix it” mentality. Why would you wait until something is broke before you attempt to fix it? How about the idea of preventive maintenance? A small amount of effort and attention periodically will cause significantly less frustration and money than waiting for a complete breakdown.

Here are the Common Marketing Material Mistakes:

- Seller Focused – not Focused on the Prospect. If you don’t what they’re looking for, then you will not know how to posture your business as a solution.
- Assumes the Prospect is Interested
- Boring
- Feature-Based: No BENEFITS
- Does Not Instill Desire in the Prospect
- Does Not Ask for a Specific Action
- Don’t tune in to WIIFM Radio Station
- Tries to be Clever or Funny. Clever DOES NOT sell - by itself. When you see a funny or clever commercial on TV, you may remember it. But people will not purchase something if it doesn’t fulfill a need they have or match their solution image. “Clever” techniques are very effective when used to posture your message, but are completely useless when they are the message.
- Tries to reflect a Professional Image. This is not enough by itself. Being a professional is simply a prerequisite, or foundation. You must offer a solution that matches what the prospect is looking for.

The sole marketing objective of successful businesses is to ALWAYS tune into the prospect’s radio station: WIIFM. Initially, you will have no idea what the frequency of that station is and it’s different for each prospect. However, once you’ve tuned into that frequency, the message goes through loud and clear. Otherwise, it’s nothing but static. Once you’ve tuned in, then you can deliver the message, but not before.

8) Don’t Know the Product / Plan / Management / etc.

An absolute and complete knowledge of your product, opportunity, and company are essential. You must know how your product or opportunity will provide the solution your Prospects are looking for. Without a fundamental knowledge of your business, you will not be able to posture it as a solution.

9) Not Teachable or Coachable

Network Marketing is a franchise-like system offering all the advantages of a franchise while eliminating almost all of the disadvantages. One of those advantages is an education and training system. Many Network Marketers fail because their arrogance gets in the way:

Ignorance plus Ego = Arrogance

Arrogance is the refusal to admit that what you don’t know might be important.

10) They Quit Too Early And Too Easily

Many Network Marketers quit before they really ever get started.

In the beginning, your business will require a lot of hard work with little to no return. However, eventually you can build your business to the point where you get a great return with little to no effort. This is because of the phenomenon of leverage. Using a lever, you can lift far more weight than you would be able to without that lever. But first you must build the lever. In the early stages of your business, as your lever is being built, it is not long enough to lift a heavy weight. But later, as you make the lever longer and stronger, it can lift a massive weight with very little effort.

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