SOWPub Small Business Forums - The #1 Problem with MLM ... HEY! Get your finger off that red button ...

George,

You asked such a simple question. It would be so easy to just give you links to the products or a brief description. And it would save me a lot of time, so I’m sorely tempted …

However …

I see a tacit implication in what I wrote and in your question that if you get the right product and write a good ad, you’re off and running with MLM.

And that’s why you need to understand the #2 biggest problem with MLM. It does involve the product, but that’s not the central focus.

In my opinion, there are a number of quite good MLM products. I’ve found several, and I’ve not done an exhaustive search, so chances are, there are many more. And the most important reason to have a good product is that, if you’re like me, it’s pretty tough to get excited about a business selling mediocrity.

And if you aren’t excited in MLM, you got no hope.

An old MLM axiom says you should be a product of your product. It’s true. Because for 90% of everyone out there, if they don’t KNOW their product is special, and they get 1 or 2 or 3 or 4 criticisms or doubts of it, they’re history.

But when you know first-hand that your product gets results, when you totally believe in it, then rejection isn’t devastating. Instead of running and hiding and doubting or quitting, you figure, “OK. I’m right, they’re wrong. I’ll keep going until I find someone else who sees that.”

Best of all … when you have conviction on your product, AND you have an endless # of leads responding to your advertising, many just placing an order without even talking to you, and THEN some yahoo calls up to yank your chain, you simply say, “No time for this, bud. Next!”

I’ve read books by top sales professionals who look with disdain at what they call, “Order-takers,” people who answer the phone and get no resistance from the callers. I guess this makes me a total non-professional, but pencil me in for THAT group, please. When I was first successful, I used to love sitting at the phone all day taking credit card numbers for $100 product orders from people pre-sold by my marketing. My volume built, my downline built, my pool for advertising dollars built, my income skyrocketed.

Did I feel “non-professional?”

No, not too.

But there are many other crucial elements besides the product. I see dozens and dozens of MLM opportunities, but it’s very hard for them to meet my criteria. Because after 8 successful years in this business, having built downlines with 4 companies (and having sold two of them), I know that most people in the MLM industry do not think like I do.

Most have a pretty standard way of duplicating other companies’ so-called marketing strategy. But my strategy requires a unique set of circumstances.

So it’s very, very difficult to find a match.

All this to make the point that there’s a lot more to it than I’m writing here, so nobody gets the impression that if an opportunity satisfies this criteria, you’ve got the thing licked.

On the other hand, if you don’t satisfy this criteria, IMO, you don’t have a prayer.

Which brings us to the #2 Biggest problem of MLM. It’s kind of a corollary to #1.

#1: MLMers can’t sell.
#2: MLM companies can’t market.

And in order for you to be successful in MLM, you must solve both those problems.

My strategies have always combined a solution. But you need to think of them both from the start, or you’ll probably miss something, and it won’t work.

More on MLM companies.

The materials they give you are mostly awful. There’s usually some good stuff buried in there, but not much of it. You need to beef it up and completely reformat it for use.

The tools they give you, if they were specifically designed for anything, were usually designed as aids to face-to-face presentations or handouts for meetings. (And most of them aren’t very good, even for their original purpose.)

But we do business by mail & direct advertising. Most old-time MLMers will tell you that won’t work. MLM is a person-to-person business, they say, and that means seminars, business lunches, meetings, etc.

As I said, they don’t think like I do. OK for them. Not so good for me.

And you wonder how is it that that a few people are wildly successful at MLM using the materials companies put out? Because either they CAN sell, or they’ve lucked into someone in their downline who can sell. And a great salesperson overcomes bad marketing tools.

How? By doing what I do … they design their own and make it available to their downline.

But the average person of average intelligence with average time and average income – and with an average sponsor – has no chance.

And that’s why it’s tough for me to find a company & product I want to work with … because the front-end load on me is enormous. People write and fax and email and call with new companies all the time. “Hey, this is great. Just give it to your downline and let them run with it.”

Yeah, right. What a joke. When I take on a new product, I have to 1) think it’s a good (preferably great) product, (2) formulate a marketing strategy so that people who believe in me and trust in me, many of whom I’ve known for years, have a reasonable chance to make a good business out of it. And that means re-designing all their marketing tools to fit our specs for advertising and direct mail.

So I fly to company headquarters and spend a couple days interviewing the principals on tape. Then I transcribe everything onto disk and spend 2 or 3 or 4 weeks developing marketing documents to fit our strategy. This has always included a cassette tape which I would research, script and record. In our biggest success, I actually continued research and wrote a book (“The Strangest Nutritional Secret,” ISBN 0-9662441-0-9). So you get some idea of the time commitment for a “start-up.”

I’ve done this 3 times. I’m in the process of doing it a 4th time. It’s an enormous amount of work. But everytime I’ve done it, it’s been successful.

Once in those years, I had a marketing piece presented to me written by a gentleman who is an expert at direct mail. I couldn’t believe my luck. I just stuck that piece in the mail with a cover letter, and the orders came in. And I could give it to others to do the same thing.

But that was because I lucked into the downline of someone who really knew what they were doing. So he tossed out the company-provided materials and wrote his own.

Another part of my strategy has been to put together a group of average people who, amongst them, would put up enough money to finance an advertising campaign.

Lots of people get into MLM and spend their lives trying to recruit “heavy hitters.” Total waste of time. I just want people who will initially fund advertising and then re-invest commission checks into advertising to build a business. And they’ve got to be willing to get on the phone and talk to their downline and explain how we do business and give them the chance to participate, too.

No meetings. No travel. No rallies.

The strategy has worked well. Four times.

I didn’t invent it, by the way. It was invented by Mike Longshore, may he rest in peace. Mike was one of my first product customers, from a classified ad. He called one day in 1993, begging me to take his money to finance a full-page ad. I thought he was nuts. Shrewd guy I was, I refused him for several months.

I thought it over. I’d never written a full-page ad. But since I knew I had the money to run it if I had it, I worked on it. Then I called Mike and he sent a check.

And he gave me the idea to put together an “advertising syndicate” for the ads I wrote. And once I made it known that people could participate in ads and build an MLM business, I had more takers than I could handle.

But then, I have to fulfill my part of the bargain. I must do something to get them leads, converting into customers.

But what if I run into a wall? What if the leads dry up? Sometimes that happens. Mailing lists work, and then they stop working. Solution? Work with the best brokers who know the best lists. Ads work and then they stop. Solution? Constantly test new ads.

When you’re doing MLM by advertising, especially direct mail, you’re in a very cash-intensive medium. Up-front cash. But most MLM comp plans are very back-end loaded. So the compensation plan must be geared to get you good up-front cash for orders. And that eliminates probably 80% of them, maybe more.

You can still make it work by stacking distributors down several levels and get signed agreements from each that the checks you generate for them will go to advertising for 1 year or some specific time period.

You should only work with people you’re comfortable with. Just because someone has money doesn’t mean you want them in your advertising group. Ask yourself, “What will this guy do when times are tough?” Because at some point, they will be. Some of my advertisers have been with me for years, through all 4 MLMs I’ve been involved in. They know how the game works and don’t get stressed out and call and harangue me if an ad doesn’t work.

Because some ads won’t work.

But when an idea works, when a campaign works, and your tools work, there’s an excitement and enthusiasm and euphoria I’ve only seen in sports when I was younger. It’s truly like winning the big game, winning the championship. Don’t get me wrong – the money is important. Very important. But the satisfaction of strategizing, putting together a group, executing your plan, winning and being a champion is something you can NEVER put a price tag on.

There’s more, of course, but I can’t make a career out of this answer.

Oh, yeah, the products. You can find them at:

http://www.body-electric.com/

http://www.supralife.com/

http://yoda.net/amaz/ajohn.html

http://www.nutritionforlife.com/

I'm no longer involved with any of these companies. If you or anyone else want information on our latest venture, use the email link at the top of this message.

Richard Dennis