marketing companies

What is network marketing?

Many of you might be asking yourself a question: what is network marketing? To describe what it is, it is necessary to describe what in includes. First of all, you are building a marketing network to promote some product or service. You will be creating a network marketing strategy, which will define how marketing network is created and what are the activities you will do to build the marketing network.

It is the most profitable to do the network marketing online. Internet allows you to build a larger marketing network that you will be able to use more effectively. The network marketing strategy still needs to be created for the online marketing network. You should study the available network marketing tip or tips before you write your network marketing strategy.

Network marketing tip: where to find.

You should look online to find network marketing tip or tips. It is a good ides to study someone else’s network marketing strategy and see if there are any network marketing tip or tips that can be derived from there. Also look at the companies that already built their marketing network, whether it is an online marketing network or regular marketing network. Each network marketing tip will be useful for you when you are creating your own network marketing strategy.

Marketing network: what’s next?

After you have created your network marketing strategy, you can start building your marketing network by collecting prospective clients’ contact information and informing your marketing network clients about your products or services. Remember each network marketing tip that you found as it will definitely help you.

There are many great articles out there; a lot of great information floating around about network marketing. Well, strike that. There is a lot of information floating around about network marketing, but it is not all that great. It seems to me now that everyone wants to jump on the bandwagon and “sell” the secret of why MLM / Network Marketing Ventures fail, and want to be the one to “sell” you the “real” truth about what it takes to succeed. Obviously, if you use “their” program, then “obviously” you will succeed. So what are you waiting for?

Well, friends, neighbors, fellow entrepreneurs and network marketing gurus, I am here today to blast the “secret” all over kingdom come. I’m writing the one article that will rock the Internet, will shake the MLM business down to its core, and will forever change the face of network marketing. OK, maybe it’s not going to be that earth shattering, but it will be some good information. Unfortunately, I’m about to destroy the latest MLM “selling the secret” rage. Six thousand businesses are about to crash, because I’m going to give it to you free. It won’t cost you one dime.

So what is the secret? Why is it that MLM / Network Marketing Ventures fail? Are you ready? Is your pulse pounding in your temple, your breath caught in the back of your throat? Has time slowed to a crawl and the drum roll sounded as the highly sought after, much coveted secret information is about to be revealed? Sorry to kill the climax, but let’s look at something else first.

I recently read an article by Mr. Devlin Smith – 7 Tips for Network Marketing Success, May, 2005. I thought Mr. Smith’s article had some merit. In it, he identifies six key elements that are crucial to the success of any MLM / Network Marketing Opportunity, with which I agree. These are:

o Company Stability

o Excellent Products / Services

o Excellent Compensation Plan

o Company / Management Integrity

o Momentum and Timing

o Support, Training & Business Systems

I then read a related article by Mr. Michael Sheffield – Why Some MLMs Fail, August, 2003. In his article he identifies the reasons for Network Marketing Company failures. They are:

o Inexperienced management

o Insufficient capital

o Ineffective distributor team

o Inability to recruit distributors

o Incommensurate compensation plan

o Ineffective products

o Lack of uniqueness

But let’s face it. MLM / Network Marketing Opportunities have come a long way. There are many companies that have the six key elements, but 97% of the business owners are still failing. There are many network marketing companies with experienced management and sufficient capital who have effective teams and are able to recruit distributors, who have great compensation plans, effective products and unique opportunities (whew! that was a mouthful) – 97% of the individual MLM / Network Marketing distributors don’t make it. WHY??

OK. NOW here it comes (drum roll please, but don’t hold your breath).

The main reason that people who work at home, who utilize MLM / Network Marketing as their home based business model fail in their home business is this. It’s wrapped up in the titles Multi Level Marketing and Network Marketing.

People don’t know how to market.

Uh-oh. The Cat is out of the bag. Colossal, huge million-dollar secret rocks Internet! Wait! Did you blink and miss it? Let me throw it out there again.

People don’t know how to MARKET. The MARKETING part of MLM and Network Marketing.

People don’t know how to market their business.

People don’t know how to market their product.

There is so much hype out on the Internet today. Everyone advertises that their plan is the easiest, you don’t have to do anything; just sign up and make it rich. You’ve got to ask yourself, “Self, if I can sign up, do nothing, and get rich, why isn’t everyone doing it?” Because you and I both know this is not the case. To me, this mode of business building doesn’t make much sense. If I sign up a bunch of freeloaders who want a home business that’s free and easy, who expect to do nothing and yet make money, what is my business going to look like? It will look like exactly what it is. I’ll have a bunch of bums signed up who will contribute absolutely nothing to their success nor mine, who will blame me that they didn’t succeed. My business is doomed to failure. Well, I don’t need any more of THOSE pancakes, thank you very much.

Now most people know better than that. They know there has to be SOME work involved, but even then, they get immersed in a program or opportunity, still not knowing exactly what it takes to be successful. The one thing you NEVER find is someone saying, “Look dude, they only way you’re ever going to make it is if you know how to market your product, service, or business.” It’s the one key that is ALWAYS missing. I don’t care how great the program is, how unique the opportunity, great pay, great product – in the grand scheme of things, it just doesn’t matter. If you cannot get that opportunity out to the masses for them to see or use, you’re going to fail. You can go search the Internet right now and find a number of “great” systems and software that will supposedly help build your distributor network. But none of them work AT ALL unless someone else SEES it.

To me it is reminiscent of all the diet marketing you see on television. Whatever the pill, drink, meal, shake, etc., the marketing always includes the phrase, “with proper diet and exercise.” With their phenomenal product, AND diet and exercise, you’ll lose weight, VIOLA! But then I say to myself, “Self, if I just had the proper diet and exercise, I would lose weight and wouldn’t need their awesome product. In fact, I NEED your product, because I DON’T diet and exercise.” It’s the same way in MLM / network marketing circles. People don’t know how to market, so they need programs and software and schemes that will do the job for them. Accordingly, there is an entire ancillary network marketing industry that’s making millions of dollars selling the shovels required to mine the gold. Selling you all the marketing tools you need to be successful.

What a deal. What’s really interesting, is that if you ask around, you will find that most people spend more money on the plans, software and programs, TRYING to entice distributors, then they spend on using or marketing their product / service / business. It’s like this massive rat race, everybody’s wheels spinning, running in circles, spending enormous quantities of cash in every direction, except in the one direction that can really make the difference. So at the end of the day, when all is said and done, the money was spent, no marketing was performed, Joe Home-Biz is broke, and he’s now one of the 97% who only made it three months before his business caved in. Hey, but that’s OK, because at 100,000 people looking for a home business every month, there will be a long line of network marketers lining up for the newest program, who still don’t know what it takes to be successful.

So what’s the answer, you ask? Why, Thanks! I was hoping you’d ask that question, because now it’s my time to shine!! I’m neither a network marketing guru nor an expert. I’m actually a Safety Professional, so if you need help with OSHA regulations, I’m the guy. But I’ve also been through the school of hard knocks within the MLM / Network Marketing Industry, and so will make a few observations. (If you’ve read down this far, you might as will drink your coffee and finish this article!)

There’s not a business out there that doesn’t market. Even McDonald’s, the world’s most successful fast-food franchise, markets their products. How many times have you ever seen a McDonald’s franchise owner set up a meeting at a hotel, or tell all their friends and family to eat at only their restaurant, literally begging them to join their business? It doesn’t happen! So why should network marketing be any different?

Well, here are my observations:

1. The best distributor is the one who faithfully uses the product or service they provide to others – they really believe in it. That’s the best marketing around. Not to mention it is a bit hypocritical otherwise. I’ve seen many times where individuals join a program, but never use the product or service they expect to sell everyone else on. So my observation is that it is better to focus on selling the product or service, and then introducing those who really believe in the product or service to the opportunity. This would also help to maintain distributor retention rates versus having someone join the opportunity and then needing to convince them that the product or service is excellent. Me personally, if I don’t believe in it, I absolutely won’t tell anyone else about it.

2. Anyone going into business needs to plan on marketing the product or service, to include a monthly budget. If you fail to plan, then plan to fail. Enough money needs to be budgeted on a monthly basis to fund purchasing the product or service for personal use (your minimum PV, etc.), and to facilitate some type of marketing campaign. This is a small paragraph, but probably the most important aspect regarding success in network marketing. In fact I would say that this is the root cause for such a high failure rate in the industry. This is the reason people don’t make it, the reason people can’t stay in long enough for the network marketing exponential multiplication to take effect. See, the BIG DOGS in network marketing know that if they just stay in long enough and keep marketing, eventually the business will take off and they’ll make money.

3. If you really want to be successful in a MLM / Network Marketing Venture, then you need to get with a COMPANY that understands the importance of merging direct marketing techniques with the network marketing business. Old school network marketing is dead, and those who understand that fact will be the ones who have massive success in the future. Successful network marketing companies fully embrace direct marketing techniques. These would include:

o Internet Marketing

o Television Commercials

o Radio Infomercials

o Ads in Newspaper and Magazines

o Email Marketing

o Ezine Marketing

o Direct Mail

o and others…

Network Marketing can be a successful business venture if you plan ahead and really understand what you are getting into. You must be able to invest in your business (and future), and be willing to stay in for the few years that it is going to take your business to grow. But most importantly, when considering which business you’d like to promote, always check with the “management” of the company and see if they have a solid for marketing your business that includes off-line and online techniques. Remember, no one is going to be more concerned about your business than you. So look hard, understand the requirements, and GO FOR IT!

Now you know the really “real” reason that Network Marketing / MLM ventures fail. To be forewarned is to be armed in advance. And don’t forget, you heard it here first!

“I’ve heard of that fellow who came to my mother-in-law’s aunt’s cousin’s daughter’s house three times in one week in 1987 with a box of detergent that he wanted to palm off… but he couldn’t because that lady was really smart! Wasn’t that the guy you call a ‘network marketer’ now? I think he was an MLM guy those days. Amway or something. Right?”

Right… and bless your ignorance buddy. If I told you that you would need a room 20 feet by 20 feet wide with 20 tonnes of air-conditioning just to keep a computer in it, would you question my sanity? But in 1987, you did need a room like that. So if the world of computers has come a long way, so has the world of network marketing.

And if computers helped define social progress in the 20th century, network marketing will define it in the 21st. That’s how critical this is, and that’s how important your understanding of this curtain raiser article will be.

So let’s take it from the top. Five myths to shatter as we start exploring this subject:

1. MLM / Network Marketing is all about copiously making money

2. Network Marketing guys are basically sales guys or distributors for some company

3. If there was substance to Network Marketing products they would sell in the regular market

4. Network Marketing guys operate with a selfish motive and con as many people as they can

5. Network Marketing is a minority cult

MLM / Network Marketing is all about copiously making money

Contrary to popular belief, Network Marketing is not about making money. 97% network marketers don’t make much. Just like 97% students writing the CPA exam fail. And 97% real estate agents go bust. But the 3% who succeed cause everyone to believe there’s good money in these professions. With real estate, there is an entry filter… you need money to start. With professional courses (CPA, Doctor etc) you need a solid study base. But for network marketers, there is no pre-requisite… so more people get in, go bust and give the industry a bad name. The 3% who succeed here do so because they work hard on themselves… and that’s the next point.

Network Marketing guys are basically sales guys or distributors for some company

Network Marketing guys have nothing to sell or distribute. They have to lead. Lead others to a different way of thinking, which is not taught in schools and society. They have to work hard on themselves to become exemplary for others to accept their leadership. And they lead you eventually to your preferred future. To what you really dream you want out of your life. Experienced Network Marketing guys do this by asking you fundamental questions. And if you can ask questions too, you can start on the road to success. (See article here for more.)

If there was substance to Network Marketing products, they would sell in the regular market

Most Network Marketing companies that last 5 years in the marketplace have good products. This is simple to understand. Network Marketing guys buy their products directly from the company. If the products were no good, they would not buy and the company would go bust. In 5 years a company has too large a network to keep supplying crap. And it is just more sensible for them to supply direct to consumer than to route it through (and waste their money on) wholesalers, retailers, advertising celebrities and the whole nine yards. Moreover, word of mouth is guaranteed in a Network Marketing set up. Small wonder the 21st century economy is moving towards Network Marketing, propelled by e-commerce, like never before.

Network Marketing guys operate with a selfish motive and con as many people as they can

As for motives, the truth is diagonally opposite to this myth. Network Marketers grow only if they help other people grow. Since most people (maybe 97% again) are not open minded enough to follow another ordinary mortal’s instructions about growing, Network Marketers have to keep searching for willing students. I understand how difficult this can be to comprehend, so I propose a simple challenge to you. Just do whatever your sponsor / coach asks you to for 90 days… you will automatically dispel this myth forever and emerge a much larger person.

Network Marketing is a minority cult

Finally, Network Marketing is a minority all right, but certainly not a cult. A cult is where everyone does what they are told to. In Network Marketing everyone does what they please… and therefore the majority fail (!) It is a minority because the majority of society will not choose to learn to be successful. Formal education will earn you a living but self-education will earn you a fortune. The sad truth is, most people will stop at earning a living.

However, as Network Marketing starts to sweep in massive social change in the 21st century, a majority of people WILL be positively influenced by this industry. Conventional distribution (Unilever, P&G, AIG, Pfizer etc) will be replaced by consumer networks, where Amway, Ameriplan, ACN and many others have a headstart. So congratulate yourself if you are a network marketer… you stand at the brink of very exciting times!

Yes, I ran from network marketing every time I was approached. I thought is was all a scam. My background is in advertising and my thoughts were it is not a good product if they don’t hit the shelves and market the heck out of it. Or maybe it is a good product but they are marking the price way up in order to have the compensation plan that network marketing build it’s business plan on. If I were to join the business how could I feel good about selling a product that is overpriced for my benefit? Last year I received an email from a friend of mine that she had left her successful career of 20 years and after some down time was wanting to do something that would allow her the flexibility to work when she wanted and be truly on her own schedule. She said she was getting started with a network marketing company. My jaw dropped to the floor. This was someone I respected and had a special connection with because she was also in the advertising/marketing business that I was in prior to choosing to stay home with my kids. I was always impressed that she was able to maintain such a demanding job, even working from home, and balancing her home life. I knew what that would take and I just didn’t have the drive for it. When I opened the email she had sent to what seemed to be her entire contact list saying I have joined such and such company and I think you should look at it to, I did. Next I immediately typed in network marketing scam on Google and started looking at all of the reasons she should not be doing this. There are articles on why to do it and why not to do it. There is so much information out there but at the top of the list for most common pros and cons I found are this:

#1 Reason not to do Network Marketing: Only 3% of network marketers actually make the big bucks.

#1 Reason to do Network Marketing: Flexibility in network marketing allows for more income, more time and more opportunity.

That alone was reason for me to close the email and forget about it. Nope, not for me. Only 3% of people make the big bucks coupled with my belief of product mark up I’m out. About a month later I get another email inviting me to come taste the product and hear about the opportunity and then she would leave me alone about it. My reply, NO. I go to the “shopping parties” and buy the stuff like jewelry or dishes to be nice and I do like the stuff but I am not going to be made to feel like I need to start this business because you gave me a little wine and cheese as I listened to your pitch. Another invite, another no. Finally someone else that had recently started doing the business with her dropped off some of the product for me to try and a DVD of what it is all about when she attended my son’s birthday party. You know what I thought…Are you kidding me! Why is she doing it, her husband has a successful career as a periodontist? Why, because they really researched what the product was about and truly believed it was beneficial. OK, I will taste it thanks, here is your goody bag from the party Bye Bye. I tasted it. I liked it. I watched the DVD and was intrigued by what they had. I researched the product and what the benefits were. About a week later I told her I would become a consumer of the product because I do like it, my husband likes it and my kids like it. Don’t count on me to be a distributor/builder whatever. We began using it consistently in mid April. I liked it and did feel like it was a good decision for my family. A few months later I started researching the Internet on how to even have a network marketing business.

I think in the beginning I was looking again for all of the reasons I should not do this business even though I liked the product. I do not want to be that girl that people think “Oh no, here she comes, she is going to try to sell us”. I also don’t want to sell my opportunity to someone that can’t handle the initial investment just for the hopes that they might be successful. This business is no winning lottery ticket. The odds are stacked against you though like the lottery if you look at the numbers. I don’t want to ever feel like I have taken advantage of someone by getting them to join under me for my benefit only. I don’t want to ruin a friendship or relationship with someone that decides to do this business and doesn’t succeed. These were my ground rules if I was going to do this.

In order to be in the top 3% of the network marketers that make the big bucks you must have a duplicatable system. You must also put in a lot of time and effort. If you start researching how to be successful in network marketing you will come across numerous programs that promise you the answer to creating leads, funnel systems, funded proposals and value. The first thing internet marketers, affiliate systems and lead funnel systems will tell you is to not throw out there what company you are with. Create an attraction to get them to register with you for leads. Then after they register with you tell them about the system you are using to build leads and get them to purchase this system. This gives you “up front cash” for you sell them your product on the “back end”. This creates an attraction that has them hunting you rather then the other way around. Personally, that is not the way I feel comfortable working my biz. It does work for people and there is a proven success in it for some. I do solidly believe in attraction marketing but there is more than one way to do this. Again, I wanted to grow my business on my own terms so while I agree with not pushing my company on every Facebook update, Twitter or conversation I am in I am also not going to hide it or keep it a secret. These systems themselves are an MLM. Do they work? Yes, for some people. Again, 3% of the people that join them will make the big bucks and others have some success. This is where I sat back and thought would it be nice to make $5,000, $10,000+ a month that these systems say they can teach you? Would it be nice to have 30 leads a day an automatic pilot? Yes. Is that the way I want to run my business…Join this system, now buy these affiliate products, now drop the opportunity you are with and join mine and duplicate. Any network marketer will tell you the key to success is duplication. Getting people to agree to all of these steps, purchases, systems and products in addition to your original opportunity is hard to duplicate and get everyone else that you recruit to do the same? I did research the 2 of the best known systems out there. I could not comfortably stand behind either system for my personal business strategy although they do have some training that I did learn some great tips on that I share for free on my blog. It is not the way I want to run my business and I think those pie in the sky numbers are building on a hope that only few will achieve. I am not a pro Internet marketer, there is a lot I don’t know about the Internet marketing business, and it is not the business I wanted to go into. The business I did make up my mind to go into is network marketing and it can be enhanced with the Internet, as can any business. I was going to do this on my own terms. I would avoid all of the don’t wants I mentioned above but no matter what in order to grow my business it was clear whatever I did, everyone that joined me also had to be able to do. If they join working with me I have now taken a responsibility in their success. This business will be about what I can do for them. Their success is up to me.

Now, there are people that have purchased the product from me and done the auto ship because, like me, they like the product. They are up front with me that they only want to be consumers and that is great! I tell them if they change their mind let me know and I will help otherwise, enjoy the product and thank you. I also tell them that if at any point they would like to work the business just enough to have their monthly product paid for, no problem, let me know and I will help. If someone signs up and really wants to work the business I talk about what their goals are. Again, “their success is up to me” so I need to know what they consider success. Do they consider making an extra $500 a month a success (A little note from my real estate background. Did you know most of the home foreclosures would be stopped if these people had another $500 in their monthly budget to spend.), $1500 a month a success, $20,000+ a month a success? The 3% number I quoted above means success as a Top Achiever or Rank. However, maybe success to them is just a little bit of additional income. Whatever it is, a plan needs to be established to achieve it. There is an investment. Everyone will achieve breaking even at different rates and earning that added income at different rates. “Their success is up to me” and I will give them the honest answers of how to achieve it with a duplicatable system and help them but they will have to put in the work. Network marketing is a business and it will take work.

Are you wondering what changed my mind about network marketing in the first place? I worked briefly with the Red Bull account when I was still in the thick of my advertising career and saw the way they went into markets by mainly using word of mouth and focusing their marketing efforts on that. They were not a Network Marketing company but the concept they had when starting out was to get people talking about it. Frustrating when you work in advertising because you want Big Budgets. Big Budgets means commission and pay to you. Instead they just wanted to spend a little on the marketing budget by getting the radio DJs to talk about Red Bull and then be present out at the Radio Events to have people taste the product. They knew that people talking to other people about their product would create a buzz. It would also pay off to be in front of people as they tasted Red Bull so they could personally be there to answer the questions of the consumers directly. Thinking about this all of a sudden it sort of snapped to me that in network marketing essentially the sales people are the marketing budget. All products have mark-ups. As with anything that you or I purchase at out local Target (I love Target) the product is priced not for what it cost to make. There is a pricing strategy for every product that allows for profitability. This strategy involves a list price, an invoice price, a product price. All of this has to factor in company profits to pay employees, marketing budgets, profit loss from theft and on and on. All of a sudden my theory that the products where needlessly marked up to pay the compensation plan became that all products are priced to pay some sort of compensation plan. Network marketing products are the same. The price I would pay for the products I sell is the same price I would pay if they were in the store.

Well, with all of that said still for awhile I was embarrassed to admit I might actually like network marketing. I started meeting other network marketers in the company I work with and you know what I realized… There were all kinds of people in this business. I have met people that run successful companies and in addition have joined network marketing because they like the concept and see the potential. Some of the people I met started because they had no other option due to the economy and unemployment. Others are moms like me that love staying home with their kids but miss having something of their own to build or just the relationships that come with working. One gentlemen I met is a successful Executive and he wanted to start a home business for the tax advantages so he and his wife chose to go into network marketing because of the low cost to start the business. I asked him if he was ever embarrassed of what people might think. The answer, No. He didn’t even say anything else but had this look on his face like I asked him in a foreign language and finished off by squirting milk out of my nose. In other words confused by my question and puzzled. It had never crossed his mind. “OK, thanks…oh, my friend is flagging me down, bye, nice meeting you” as I walked off and thought why is it I embarrassed?