MLM Tips | 8 Reasons People Fail in Network Marketing & The Solution
If you’ve been in the Network Marketing Industry for any length of time, you’ve probably seen many people come and go and claim to have ‘failed’.
Many of the people who get involved in MLM are honest, hard-working, sincere people… and yet they just can’t seem to make any money in network marketing.
The top 8 Reasons people Fail in MLM (Network Marketing)
1) Joining the wrong company for the wrong reasons
Often times in the network marketing industry, people join a company for emotional reasons. This is a sure-fire way to set yourself up to fail in MLM.
Here are some examples of emotional reasons that people join an MLM company:
- They’re told it’s a ‘ground floor’ opportunity
- They’re promised ‘spillover’ from their sponsor if they join right away
- They’re excited that the company they’re joining has endorsements from celebrities or ‘superstars’
- They’re joining as a favor to a friend or family member and don’t have a vested interest
- They like the low entry fee and are promised ‘easy money’
2) Compensation Plan Has No Room for a Marketing Budget
In order to master the skill of marketing and be successful in your “network marketing” business (especially on the internet), there’s a cost involved. There will need to be an investment in tools for marketing, advertising, etc in order to set yourself up for success.
Unfortunately, many companies in the network marketing industry have compensation plans that don’t pay enough on the front end to afford the distributors room for a marketing budget.
There are a couple of solutions for this that I recommend.
- Find a company that pays a high front end commission. Basically, you’ll be doing the same amount of work regardless of what company you’re in, so partnerinng with a company that pays enough on the front end is a wise decision.
- If you’re happy with your company but need a way to create more money on the front end, a funded proposal is a great way to go. For example, I use MLSP and the Empower Network as my funded proposals…. they both have a very low barrier to entry (MLSP is $9.97 to get started and Empower Network is $25), so they attract lots of people and help me fund the marketing for my primary company.
3) Scarcity Mindset
I see it over and over again… I’ve actually written articles just on this principle alone… the scarcity mindset.
Many people actually think that they can simply join a network marketing company and have success without investing in the marketing, tools, training, and advertising that’s needed to succeed in “MLM”.
As my friend Rob Fore likes to say,
“You have to stop being cheap and invest in yourself if you want to succeed.”
It’s soooo true.
So simply give up the scarcity mindset and remember it takes money to make money and the best investment you can ever make is in yourself (it’s also the only type of investment with guaranteed returns).
4) Lack of Recruiting Skills, Marketing Knowledge & Tools
In order to truly succeed in the network marketing industry, you MUST master the art of sales, marketing, and promotion (unless you’re just planning on talking to your friends and family and then calling it quits).
You must get rid of your scarcity mindset and start investing in yourself to gain the required skills. And again, a simple (and very affordable) way to do this is to use a system like MLSP or the Empower Network where you can invest a monthly fee and get all of the training, skills and marketing knowledge required.
5) No Cash Flow
Again, we need to have a marketing budget to work with in order to succeed, and the best way to create quick and steady cash flow is to create and market funded proposals.
Funded proposals allow us to get paid even when people don’t end up joining our team… and it’s always good to have multiple streams of income.
Here’s the other great thing about funded proposals… if we can teach our team members how to use a system like MLSP or the Empower Network as soon as they join our business, we can easily help them get a check in their hands within the first 30 days. This will GREATLY increase the likelyhood that they will stick around long enough to become good at what they do and start to experience success in their MLM business. And once they experience success, they’ll never quit. 🙂
6) High Attrition Rates
The attrition rates in the network marketing industry are very high… the average in the industry is 80-90%.
This means that 80-90% of the members and customers that people bring into their MLM businesses fall away as fast as they’re signing them up. This makes it REALLY hard to get ahead in network marketing and is a big part of the reason that so many people ‘fail’ in MLM.
The biggest cause of attrition is when people are signing up for a product or service that they would not buy in the open market at the same price that they’re getting it from a network marketing company. The only reason they’re willing to pay a higher price is due to the promise of getting paid to represent the product… so as soon as they DON’T get paid, they cancel their autoship.
The key here is to find a company that has little to no attrition (they do exist)… and/or to use a funded proposal like we talked about so that you can continue to get paid through your funded proposal system even as people drop like flies out of your primary MLM business.
7) Lack of Leads
Many people start out in their new network marketing opportunity by talking to their friends and family… their warm market. The problem here is that, eventually, everybody will run out of people they know that they can offer their opportunity to.
And, when you run out of leads, you no longer have an active business…
So the key here is to use a system that will help you generate leads… large numbers of them, and preferably on autopilot.
8 ) Crappy System or NO System
It is crucial, if you’re attempting to build a network marketing business online, to have a good system.
I use and recommend using an attraction marketing system. The reason for this is that the leads that are generated are people who were attracted enough to YOU to opt-in to your capture page or website… so when you call them to connect with them, they’re HAPPY to hear from you and already want what you have to offer. This is much different than calling cold leads off of a lead list that you purchase somewhere, or calling your local realtors out of the phone book.
Here’s the deal… people don’t duplicate, systems do.
You may be great on the phone, but your new team member may not be. Everybody has different strengths and different things that they would enjoy doing on a daily basis to build a business. Therefore, it’s essential to present a menu of options rather than a way of doing the business. This way, people can choose the best (and most enjoyable) option for them which will greatly increase their likelyhood of success.
Summary – The Solution
MLSP is a powerful attraction marketing tool and funded proposal system that you can use for automatic lead generation. MLSP also pays you on 19 different affiliate streams of income to help you fund your marketing and make money regardless of whether your prospects end up joining you in your primary company.
Ready to join MLSP? Click here.
Empower Network is an incredible sales funnel/funded proposal that pays 100% commissions on powerful products (marketing tools) that will help you and your team generate substantial marketing money while providing top-notch marketing training. The Empower Network also allows it’s affiliates to use the products (a viral blogging platform, etc) to market whatever they want… it’s a great platform for you and your team to use to promote and build your primary company (while making upfront 100% commissions on the Empower Network products).
Ready to join the Empower Network? Click here.
With these 2 systems in place, there’s no longer an excuse for people to fail in network marketing. Using either (or both) of these systems provides the solution that Network Marketers have been looking for.
Please let me know if you have any questions about MLSP, the Empower Network, or the 8 reasons people fail in Network Marketing… and please leave your comments and feedback below.
To Your Success,
Amy Starr Allen