IS NETWORK MARKETING DYING?
By John Counsel, CEO of The Profit Clinic
Have you noticed how most companies are posting losses, network numbers
are shrinking, sales are declining and many MLM companies are closing
there doors? What does it all mean? Is there a future for you in network
marketing?
The last two quarters of 2000 saw virtually all of network marketing
companies - and not just newer ones, even the old warhorses of the
industry - posting lower sales, lower distributor numbers and lower
profits than the previous year. That trend has continued with company
closures, many due to regulatory prosecutions and civil lawsuits, as
well as a growing number of investigations by government agencies in
several countries.
No matter how positive your view of network marketing may be (and I’ll
get lots of abusive letters from the “faithful” in response to this
article) even Blind Kenny can see that all is not well in network marketing.
There’s a malaise that’s now becoming more obvious to more and more people,
and I get phone calls, faxes and e-mails regularly from editors,
commentators, industry leaders and rank-and-file distributors asking if
I’m noticing it too.
Yes. I’ve noticed it. And, if you’ve followed my articles in this and
other publications, you’re also probably aware that I and industry
visionaries like Dale Calvert have been forecasting it for the past
couple of years.
THE PROBLEM
Abraham Lincoln said “You can fool all of the people some of the time, and
some of the people all of the time. But you can’t fool all of the people
all of the time.”
That applies just as much to network marketing as to politics. And this
system of business - the most enlightened, ethical, egalitarian and
edifying of all business systems (but ONLY when it’s operated by people
who are equally enlightened, ethical, egalitarian and edifying) - has seen
an exponential surge in the number of counterfeit MLM opportunities over
the past few years, especially on-line.
In 1997 I wrote about the three major trends that would impact on network
marketing into the twenty-first century. The most serious of these was
the trend toward appeasement - a tendency by company managements and network
leaders to pander to the fears and foibles of their members and prospects
by changing their systems to ensure that those people...
*Don’t have to work - it will all be done for them
*Don’t have to sponsor - their downlines will be built automatically
through “spillover” “tap-root” recruiting and downline clubs
*Don’t have to sell - because nobody wants to be a ‘salesperson’
*Don’t have to attend meetings
*Don’t have to do anything!
It’s a reasonably short jump in logic to conclude that, if you appeal to
laziness, greed and gullibility, you’re going to end up with a network
that’s predominantly lazy, greedy and gullible!
And they’ll be off after the NEXT do-nothing-and-get-rich-quick
“opportunity” that comes along as soon as they realize that the present
one isn’t making them any money -and won’t!
If you sponsor people on the basis that you’ll do all the work for them
(“Mother Theresa” Syndrome), you simply train them to do nothing but wait
for you to do it for them. So don’t be upset if they do exactly what
you’ve trained them to do... nothing!
THE SECRET OF SUCCESS
I’m sure people in my own network are sick of hearing me say it, but the
Secret of Success is deceptively simple: do only the right things, for
only the right reasons. That way, you simply cannot make mistakes.
The obvious dilemma for most people is equally simple: they have no idea
of the right things to do, and even less idea of the right reasons for
doing them.
Duplication is constantly held up as the key to success in network marketing.
And it’s absolutely correct (notice that it’s the KEY to success, not
the SECRET of success).
But the question I offer in response to that is this: if duplication is
the key to success, why do 90% or more of network marketers not make any
money?
It’s estimated that as many as 75% of distributors with any company don’t
even use the company’s products themselves.
Why?
The obvious answer is that they can’t afford to buy them, because they don’t
have the money to do so. So they sit idly on the books, until the company
purges them from its database. (Which may be never, in order to make the
company’s network numbers look better.)
But what’s the real reason for this unacceptable level of failure if
duplication is the solution?
Could it be that they’re duplicating the wrong things? Or duplicating the
right things - but for the wrong reasons?
Given the number of people who join my own downline team and insist on
repeating the very things that didn’t work for them in other companies,
I’m tempted to say “yes!” They seem to think that transferring them into
a new opportunity will make them magically work at last. The sad truth is
that a dud is a dud is a dud, no matter how much you WANT it to work.
In small business, 90% of owners fail within 10 years through ignorance:
they just don’t know what they need to know to survive.
Or, if they learn the right things and the right reasons for doing them,
they don’t actually DO them.
Network marketing is no different. The same percentage fails for the
same reason.
And it’s no different in network marketing companies themselves. Apart from
the unscrupulous rogues who set up scams to deliberately rip people off -
and it’s happening more, not less, - the majority of MLM companies fail
because of management ignorance and distributor greed and ego.
Most “Heavy Hitters” haven’t really HIT! . In years!
A REVOLUTION IS NEEDED.
We need a revolution in network marketing. We’ve gone about as far as we
can go with present standards and insights. Those people waiting for the
“corporatization” of network marketing by Fortune 500 companies will be
waiting a long time, because commercial interests hijacked Richard Poe’s
real “Wave 4” concept, revealed in an interview shortly after publication
of his excellent, highly successful “Wave 3” book in the mid-1990s.
Poe stated, in response to the interviewer’s question about what “Wave 4”
might involve, that it would be about a revolution in MLM compensation
plans, one where part-time distributors- would finally be able to make money
from fairer reward systems.
That idea was very quickly dropped - because the vast bulk of the publisher’s
books were sold to a handful of older-style MLM companies’ networks (with
the companies’ imprimatur), and those companies were not, under any
circumstances, interested in changing their existing compensation plans
in favor of the part-timers.
So commercial imperatives overrode the truth once more.
(How do I know? Because I was involved in the creation of marketing strategies
for the book in question. When I saw the reality of the situation, I withdrew.)
We’re seeing the beginnings of this next wave right now. A small, but
increasingly significant, number of MLM companies are adopting compensation
plans that offer both the part- time distributor and the full-time professional
a better, fairer deal.
Sure, some “gurus” have pooh-poohed these plans recently. But you should
take the remarks of these people with a very large grain of salt. They have
substantial vested interests in maintaining the status quo, either because of
lucrative consulting contracts with companies running old-style compensation
systems geared to reward heavy hitters (and companies!) Or because they have
huge downlines that they need to keep from learning the truth, or they may
lose them.
It’s time to put the business back into this business system. It’s time to return
to our roots and begin doing the right things for the right reasons.
With a recession looming, it’s the perfect time to gear up, because network
marketing has traditionally prospered in tough times. The recent good years
haven’t helped our cause, because people haven’t been too concerned about
their financial security (or your downline would be a LOT bigger than it is
right now!).
That’s already changing.
Just make sure that the compensation plan you’re working is geared to reward
the part-time people you sponsor fairly and well - or you could see them moving
to those that do.
The revolution is already here. The sleeping tiger simply hasn’t fully roused
and roared yet.
It will. And soon.
John Counsel is the founder and CEO of The Profit Clinic; one of the world’s
leading on-line and off-line support centers for network marketers and small
business owners.
----------------------------------------------
Resource Box:
To read the remaining of this article,Download
free 'The Only Shot You Got For Success' of
creating MLM Cashflow in the New Millineum.
How to sponsor more new distributors into your
downline in the next 30 days than you have the
previous 12 months!
Subscribe to:
successonly@wealthysecrets.net
------------------------------------------------
Linear Mode
