What’s Wrong With Network Marketing and How Do You Fix It?

Warm Market Woes

Right after joining a nutritional supplement MLM, I dutifully decided to approach my family and friends, my so-called “warm market.” My girl friend’s mother was visiting us from Las Vegas. She was working for a health club in sales. She’s one of their top earners. An ace. I thought for sure she’d be interested. After all, the supplements were pharmaceutical grade, the best in the business, and health was her main interest. But when I approached her, as soon as I mentioned “network marketing” she didn’t want to hear about it. My warm market was suddenly very, very cold. It turns out that she had been involved in several network marketing companies in the past. She poured her heart and soul into them and got very little in return. There was no way she was going to go chasing after prospects ever again.

As it turned out, others in my warm market had similar experiences with MLM’s. All of them bad, and nobody wanted anything to do with another MLM.   Interestingly, it wasn’t about motivation or effort. Many of the people I approached were successfully self-employed, or were top earners in their companies. There was nothing lacking. They all had talent, intelligence and drive.

What’s the problem?

The problem was that all of us network marketers were prospecting people who were not interested.  By prospecting our warm markets, we were spending our time talking to people who were happy enough with their current jobs and health products.  They were not seeking any change.  For them, it was just like when someone comes up to you on the street or comes to your front door and tries to sell you something.  You feel invaded and mistrustful.  Why? Because you didn’t ask to be prospected. You weren’t shopping for whatever they were selling.

When What You’re Doing Isn’t Working, Try Anything Different

Needless to say, I was as uncomfortable with my warm market as they were with me.  So, I decided to leave them alone and try purchasing leads instead.

With purchased leads, I soon discovered that there were similar problems, but this time I was paying for those problems ($2.50 or more per lead).  Usually the ads that pull in these leads are generic.  They usually headline something like “Looking for a Home Business?”  So, even if the prospects are looking for a home business, they’re not necessarily interested in your kind of business or your particular product. They’re slightly better targeted than your warm market, but not much. What’s worse is that the companies who sell you the leads typically sell the same leads to many other network marketers.  So, you often get a very cold response when you call the lead who has probably already been approached a few times.  “What are you calling me for?  I just talked to someone about this.  Leave me alone! Click.”

What’s the Solution?

There are several directions you can go in to put the odds in your favor.

  • 1. Fine Tune Your Phone Skills.
    You can find the best source of leads available and use it. Then focus your attention on developing good listening and consultation skills on the phone. You’ll get a higher percentage of leads deciding to join your network. In this regard, the best training by far is Tim Sales’ “Brilliant Communicator” and “Brilliant Inviter” CD sets. Tim Sales has developed the most remarkable listening skills. When you hear his recorded sales calls, you won’t be at all surprised that he built a $22 million network with his approach.
  • 2. Use internet marketing to pull in leads.
    For this option, you need to learn how to advertise on the internet. There’s an array of techniques, some involve blogging, some involve social media (e.g. Twitter and Facebook) and others are just straightforward advertising using tools that Google provides. There are trainings (discussed below) that show you how to do internet marketing. It can be used to generate highly targeted and qualified leads. Those who get through your funnel,
    will be the ones interested in your opportunity, so your percentage of closings will be higher.
  • 3. Conventional advertising.
    Not a lot of network marketers admit to this, but you can advertise in the traditional media, such as radio, television, magazines and newspapers. I haven’t explored this route so I can’t offer any suggestions.

How to Master Internet Marketing

Here are 3 training systems that I’ve used. They’re each targeted toward slightly different audiences.

  • 1. Renegade Professional
    A collection of training videos that you can watch with a monthly subscription. It is quite comprehensive. Over 200 videos cover every aspect of internet marketing. It is especially good for folks who are new to the internet and especially Web 2.0. You can read my comprehensive review of Renegade Professional here.
  • 2. Mike Dillard’s eBooks
    These can be bought separately as: Magnetic Sponsoring, Building on a Budget, Traffic Formula 2, PPC Domination, and Black Belt Recruiting. (Note that these are affiliate links.) Dillard’s material is geared more for people who have more experience with computers, the internet and Web 2.0. Because they assume more knowledge, an experienced person can move through them very quickly.
  • 3. Perry Marshall’s Adwords book and trainings (not an affiliate link)
    Perry Marshall wrote a wonderful book: “The Ultimate Guide to Google Adwords: How to Access 100 Million People in 10 Minutes.” If you are willing to pay for advertising, as you were paying for leads, this can be an extremely quick and cost-effective way to get targeted leads. You have to be careful though. When you’re paying every time somebody clicks on your ad, the cost can ad up very quickly. Use this only if you’re going to follow his instructions to the letter.

The Tradeoffs: Internet Marketing vs. Purchased Leads

Mastering internet marketing requires that you enter a whole new world. It’s work and it takes time. Whether it takes a lot of money or a little money depends on the path you take. It can be done very cheaply. It can be done quickly if you’re willing to take the money you were spending on leads and use it in advertising, with Google Adwords for example. If you’re willing to invest more time, you can save this expense.

A question that many people ask is this. “Is it really less work than if I just keep prospecting the way I’ve been doing it?” My answer is that for internet marketing, you have to put in a lot of work up-front to get your advertising infrastructure set up and working. Once it’s running, you’re golden.  Best of all, you won’t need to spend so much time on the phone because the leads in your funnel will be highly qualified and if you set things up right, they’ll be calling you. So, you’re making an investment in yourself by learning a technology that saves you time on the phone in the long run.

If you continue using purchased leads, and you have a 1 to 2 percent conversion rate, you’ll continue to call 50 to 100 people for every one you close (unless you use Tim Sales’ approach which will give you a much higher conversion rate). That’s a lot of calls and a lot of money (100*$2.50=$250). Every new customer is costing you about $125. This is actually an optimistic figure because good leads rarely cost only $2.50 each. What’s worse is that it’s very difficult to find downlines who are willing to sign up for this much work and this much rejection. So, it’s hard to duplicate yourself, which means it’s hard attain the leverage that MLM promises.

On the other hand, if you master internet marketing, you can teach that skill to your downlines. You may even generate enough leads to share with your downlines. So duplication becomes less of a problem.

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