If you haven’t read Day 1 yet, please go back and do so before you read this post. If you’ve already done that, let’s get started with today’s training, day 2.
You’ve probably heard that 97% of all network marketers fail in our industry. I personally don’t believe those statistics. I think they are skewed because people join our industry for a variety of different reasons. Some people want a social club to belong to. Others simply want a discount on their products. Other folks simply want to make enough to get their products for free each month. Some folks want to earn a few hundred dollars per month and only a select few want to make the big bucks.
Calling everyone who doesn’t make BIG money a failure is fundamentally flawed, especially if most people aren’t trying to make a lot of money.
Please know that people join/quit and/or fail businesses for MANY different reasons. I’ve found that the top 10 common reasons people fail in network marketing include:
Reason # 1: Poor Cash Flow – The # 1 secret to success for any type of business is good cash-flow management. If you always have more money going out than money coming in, your business is doomed for failure. Having revenue is important. Managing that revenue, minimizing your expenses, and determining when and how you pay your expenses is more important. To succeed in this industry, you need to get a grip on your cash-flow. And you must be able to help others make a profit within their first 30-90 days, or they will most likely quit. That’s one of the most important reasons you need to get lots of retail customers! That means that you need to minimize your expenses and you need to get some customers for your business as quickly as possible!
Reason # 2: No Leads – Leads are the lifeblood of EVERY business. More importantly, you need qualified leads for your business. Although there are many different ways to get leads, the best way to get leads is to generate your own leads. If you have a constant flow of 3-10 or more leads coming into your business every day, you will position yourself for success in your business. Most people have no clue what to do after they work through their warm market! You really have two options. You can chase people, beg, pressure and try to sell them on your opportunity, or you can take the time to learn how to get people to contact you first. I’m going to teach you what to do later on in the Boot Camp.
Reason # 3: Unrealistic Expectations – It’s sad that I have to include this on my list, but it’s true. People are funny. They will work in a job for 10-20 years and be completely broke, yet they join our industry and expect to make big bucks their first month. This lottery mentality destroys tons of new distributors. Sponsors need to “keep it real” with their people and tell them what they will really need to do to succeed. They need to let their prospect know this business takes time to make money, and what type of effort will be required to make that happen.
Reason # 4: No Mentor – All successful entrepreneurs that I know of have a mentor. You will be no different, if you want to succeed in your business. You need to work with someone who can teach you how to be successful, using proven techniques. This person doesn’t necessarily need to be your sponsor, but you do need to find a mentor (preferably in your upline) who is successful and knows what they are doing. Most people join this industry, and then get left behind or forgotten about by their sponsor. I believe the person you partner up with is more important than the company you choose. If you don’t have a mentor in your current company, you can find mentors through books, online videos, and blogs.
Some of my favorite mentors are:
- Don Failla
- Dan Kennedy
- Jordan Adler
- Mark Yarnell
- Mike Dillard
Reason # 5: No Daily Mode of Operations – Everyone is busy. I get that. One of the biggest reasons people tell you no they can’t join the business is because they don’t have enough time. Let’s face it, most people have day jobs, a family, and outside of the home commitments. After a long day at work, dinner with the family, helping their kids with homework, and watching some television, there isn’t much time left over to build a business. The truth is people make time for things that are important to them. You need the discipline to set aside one to two hours per day to build your network marketing business and you need to have a “to do” list when you work. You must focus on the money producing activities during that time and you must work your business every day, no excuses. See an example daily mode of operations.
Reason # 6: Targeting the Wrong People – If everyone is a prospect, no one is a prospect. Sure, anyone could join the business, but most won’t. Think like a Texas realtor listing a million dollar home. Would they try to sell it to someone who wanted to rent? Would they try to sell it to someone who was unemployed? Would they try to sell it to someone who couldn’t qualify for financing? I hope not. In this industry you have two target markets. One target market is for your products and the other target market is for your business opportunity. When it comes to your products you want to focus on people who have the desire to buy what you are selling, have the money to do so, and are already buying similar products. When it comes to your business opportunity you want to focus on other network marketers, entrepreneurs, professionals, sales people, and people with a big, burning desire to change their lives.
Reason # 7: Not Enough Income Streams – To succeed in network marketing, you need at least three good income streams, preferably three to five. I say that because it typically takes a several years to earn a large income with a traditional network marketing company. If you don’t have a way to get paid today, and make money from all the people who tell you NO to your business opportunity (and products), you will be out of business in no time. Ideally, you need a leads business, a tools business and training business, in addition to your MLM Company. I like to call this a You, Inc. business. I don’t believe you should promote more than one MLM Company at a time, but I do believe it makes sense to have additional products and services you can promote to people who don’t want to join your team.
Reason # 8: No Focus – Most network marketers try five or ten different marketing or advertising strategies at once. Or, they switch companies every 60 to 90 days when they aren’t getting the results they desire. Rather than focus on one marketing activity (and mastering it) they end up trying a bunch of different things while achieving horrible results. Focus and discipline are the key to success in life! You need to pick one strategy to grow your business and then take MASSIVE ACTION until you have it mastered.
Reason # 9: Following the Wrong System – You might not agree with me on this one, but I do not really believe in systems and duplication, even though these are two of the most popular words in our industry. To be quite frank with you, I believe that all of us are different, with different talents, abilities, and strengths. What works for one person might not work for someone else. Forcing everyone to use your system is foolish!
Some people like working their warm market, others don’t. Some people love home parties, others don’t. Some people like blogging, others don’t. Some people like events, others don’t. I personally believe there are many different ways to build a business.
I believe it is your job as a sponsor to find the best way that works for you AND to help each person on your team find a way to build the business that works for them. No matter how YOU build the business, your best people are going to do their own way anyway. Look at the top earners in any company and the one thing they all have in common is that they all built the business differently from each other.
Yes, you should have a system for your new people to follow. But don’t get mad if they want to do their own thing! Teach each person to leverage their own talents in a way that works for them.
When it comes to duplication, know upfront that most of the people you sponsor will do very little, if anything to build their business, regardless of what type of system you use. In most cases, no more than 10% to 20% of your team will even actively build the business. That’s why I believe duplication is a myth.
Reason # 10: Working with the Wrong MLM Company – Although the company you choose isn’t the most important thing, some companies are MUCH better than others. Some companies have strict policies about how you can promote their business opportunity online and offline. And others have crappy compensation plans. Some have a non-compete clause that keep you from doing multiple projects. You need to find the right company, with the right policies and right compensation plan. You should do research on your potential company like you would if you were investing $100k in a franchise. You have to know what you are getting yourself into. Ideally, you want a company with a product or service you are passionate about. It also helps to team up with an established company that has been around five or more years.
You should also know that most top earners have been with SEVERAL companies BEFORE they found their forever home. So if you don’t do good in your first business, don’t give up. There is probably something out there that is perfect for you.
In conclusion, these are the 10 most common reasons people fail in network marketing. Obviously, there are many other reasons too. I learned a long time ago that knowledge is power. Just knowing these common reasons for failure can give you a major advantage over people who don’t know about them. Make sure you study this list and evaluate yourself in each area. Identify which areas you can improve upon.
In tomorrow’s message, I will give you the top 10 things you need to do to succeed in network marketing. Have a great day!