Network Marketing is such a lucrative business model with incredible advantages over the familiar traditional advertising marketing model.
But it is also an industry that is not treated with the respect it deserves by its opposing traditional business thinkers.
Even for those who crossover and grasp its glory, more often than not they miss the nuances and subtleties of its operation in practice and dismiss the value of industry experience.
In my 14 years of experience, I’ve educated thousands of entrepreneurs about the network marketing business model — What it is, how it works, why its important, and how to leverage it to build wealth and success.
And one of the many mistakes I’ve witnessed people fall for is this:
It’s so easy for businesses minded entrepreneurs to fall in love with the Network Marketing business model. But it is just as easy to take it for granted and think that they can wing their way through it.
Same observation goes for the Ownership team.
Ownership that has extensive mlm experience will create an entirely different company and experience for the distributors than ownership who has none.
Just because someone has been successful in sales doesn’t mean they will succeed in network marketing.
Just because someone has been successful owning a traditional business doesn’t mean they understand what it takes to launch and build a successful MLM company.
There are so many decisions to make on determining the direction the company takes.
There are so many chances and choices on whether to go left or right and say yes or no.
Owners who have extensive experience, both in the field and the corporate side of MLM, will be better partners than owners who don’t. PERIOD.
From one standpoint, I think that statement would be fairly straight forward, obvious, intuitive, however, so many times, so many of us get excited about a company, a product, a compensation plan or another aspect of a company and we forget how important experience in the field and on the corporate side of multi level marketing is.
Here’s one place it shows up….
Business owners focus a lot on numbers as the saying goes:
“The numbers tell us the whole story”. I think that’s a powerful statement. Wherever your attention is, that thing grows. So if your focus is on your bottom line numbers, then you can grow those numbers.
In sales, and for sales managers and the sales people, focusing on numbers is the fastest way to grow sales.
But when you’re running a network marketing company, there is more to consider. Focusing solely on numbers that feed company profits is wrongheaded and wrong hearted.
From a corporate standpoint, the numbers determine a lot. The numbers can tell the corporation whether they stay on course or adjust, launch another product or wait, run a promotion or hold off…
The numbers can tell an owner to retract or expand, where to invest capital and where to direct incentives. So many things can be determined by the numbers.
But YOU are not a number.
You are a human with goals, and plans, and feelings, and contacts that you will or won’t want to introduce to your company.
You have a reputation among your peers, you’ve spent years building trust and relationships and all of it can go away in an instant, if the company owners make decisions only based on numbers.
As much as we want to keep business emotionless the reality is network marketing is as much a heart game as it is a head game.
So many times owners with little or no experience in MLM lack both the experience and awareness to make the best decisions for the field.
When owners have their interest focused solely on increasing the company’s bottom-line numbers, the field suffers.
It’s so easy to make decisions that are good for company numbers, only to unintentionally make things harder for the reps in the field, now or later down the line, as the implications of these decisions begin their chain reaction of cause and effect.
In evaluating one company, my wife and I sat across the table from the owners for 8 long hours. It was excruciatingly long.
Within the first 90 minutes of asking them questions, in our hearts we already knew our answer.
But we wanted to honor the time the owners had allocated to spend with us, and give the company a fair shake, especially since they had flown us in to meet with them.
While the owners attempted to impress us with their product and pitch, we peppered them with questions about the ownership background, decision-making protocols, and company numbers.
Their answers only confirmed the answer we had in our hearts.
As one of the owners proudly shared about a 5x company revenue increase from the previous year, Dr Yess and I had uncovered the more relevant pieces of the story as it pertains to our future and your future.
While the company 5x’ed its revenue, the leadership’s incomes hadn’t increased 5x. The company had lost the momentum it had 2 years ago and had been losing leaders left and right ever since. Their events were 1/3 the size they were 12 months prior. They were losing momentum, belief, and their leaders incomes were going down.
The company revenues were 5x greater, But they didn’t have 5x the amount of leaders or 5x the amount of promotions.
The company numbers showed they’re doing well. And from a company revenue standpoint they were. Their strategy was to circulate their network by pumping down a new product every quarter. With four new product launches that year they had milked the cow dry.
And their numbers said milk the cow again.
Owners who have extensive experience succeeding and failing in network marketing, both in the field and in corporate, take a holistic, comprehensive approach when it comes to the numbers question.
Because of this, they understand the ramifications of their decisions on the sales force. They take distributor physiology into account and consider the feelings their decisions may invoke in the field and the reactions they may backfire. Sometimes, it requires the tough sacrifice to take a hit in corporate numbers in order to grow back the momentum in the field. It’s always a tough call.
But smart, expert, and experienced owners always finds a way to stoke the fire in the hearts of their distributors even if it the cost is high.
Owners who have experience in the field and in corporate will know first hand how their decisions will impact the field and the corporations bottom line and in every way those impacts will be made manifest….
Stay tuned for part 2 of this blog and the 2 most important questions to ask about the owners experience in network marketing before pulling the trigger.
Till our next pep talk,
co-authored with Maral “Dr Yess” Yessayan, PHD
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