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Is Network Marketing Failure At 92% Plus Acceptable?

Jun 24, 2008
When I first heard that 92-97% of people fail at network marketing I was shocked. How could it be that an opportunity that seemed so straight-forward could result in so much fallout? Certainly when I got in I decided I was there for two to four years minimum before I would decide to quit. And when I knew the statistic that 95% of people who remain in an opportunity for more than ten years would be wealthy beyond their wildest dreams then I felt I had to hang in there. To quit would be stupid.

And if the figures are correct why quit? Well there can be a number of reasons - some common and some less obvious.

Recently on considering the sobering failure statistic again I remembered I had heard that 95% of small businesses fail within two years. But checking this I found it hard to substantiate. It may be that it is an urban myth. There are references out there. But there are also a good number that dispute this figure. More recent US statistics suggest it may be much lower. Maybe only about 34%. Then again the framing of the statements suggests the data could be looking at all existing businesses.

If it was really at 95% then failure in mlm at 95% would not be incongruous. It is just another form of business.

Still why do people fail at home business network marketing?

1. Poor Businesses
If the underlying opportunity fails then those involved with it will suffer a loss of their livelihood. And with the large number of start up mlms failure is a distinct possibility. You need a business with a good track record and sound business footing. People like to get on board a new opportunity early to benefit from being at te top of the system. Like any new venture there are risks with this. With no track record you have no assurance for the future. Even a track record does not mean a company will continue without problems or challenges that could send it under. But it gives more reassurance than nothing. And the founders should have learned some good strategies to get as far as they have.

2. New Competition
New businesses starting in the same area can produce competition which can lead to a reduction in possible opportunity. The leaders of a multilevel marketing business should always be aware of threats and weaknesses and should be adjusting to allow for this. But they can get caught unawares.

3. Cheaper Product Available in Retail Stores
If the same or near equivalent product appears on the retail market, especially in supermarkets, then the viability of running a competing business is in jeopardy. A good company should be channeling its product through the one outlet. Or, if it is available in retail there should be a significant cost advantage buying it through the network. However supermarket chains are unlikely to allow this.

4. Failure of Support
If there is inadequate training and lack of a good team support structure then it will be difficult for a newbie to succeed. Any mlm must have a very simple method of operation that can be readily duplicated. And there needs to be good support and expert trainers to get a newbie onto their feet.

5. Unrealistic Expectations
This applies to the new business owners as much as to any customers the company. If the expected returns are set at attainable levels and there is early generation of income people are more likely to continue. But, especially with the advent of the internet, a long lead time to financial success will cause questions to surface in a new recruit's mind. And if they are strong enough and there are not good answers forthcoming they will quit.

6. Too High An Investment
If the start-up costs are high and the method of attaining new recruits involves significant up front costs a good number of people will find that financially they cannot cope for long.

7. Failure To Understand Personality Differences
This seems to be a major reason so many people quit. With the huge range of personality types out there - ranging from four to eight depending on the system used - it can be difficult to cater to the variety of representatives there will be on the team as well as variations in customer personality. Too often it is easier to communicate in a style that fits our personality type as that is what resonates with us. And often it is the reasoning that moved us into the business. If it did us, why should it not be for other people? What we should be looking for, though, is the personality style of our prospects. And with new team members the personality style of our newbie reps.

If we allow for this we are more likely to have success. In fact, if your consider a basic four types set up and an even distribution of types, then we could increase our prospect range by 300% - going from 25 to 100% of a possible market!.

So what is the answer?

a. Business
Well we need a good business, financially sound, with a good track record, products or services that are in wide demand and are not available cheaper in normal retail outlets. We need excellent training and support and a mindset that we will be in this for the long term. Therefore our business also needs to be one that will be around for many years due to the nature of the its current products or services and its development of future products or services. Start up and ongoing costs should be reasonable. And the compensation plan should allow for ready monetization of the process. It should be possible to rise to the top levels of the company at any time in its life history - ground floor or many years later. The system for acquiring representatives and customers should be easily duplicated.

b. Personalities
As far as personalities in your team go, a good understanding of the synergies that are available in utilizing a number of people with a range of personalities in your team could lead to a real business explosion. Different personality types can reach a wider range of people. More importantly it gives balance to the whole team thrust and multiplies its effectiveness. Different skill sets can undertake different functions within the team. The different processing styles allow for better observations of opportunities and responses to them. And communication which understands and relates to the different types will produce better outcomes and satisfaction.

With this approach and method of operation there should be far fewer failures. And if there were less the multiplication of our opportunity would produce huge results - exponential growth built from a much bigger base. Every extra unit at each level produces unbelievably large increases in the leverage of network marketing. If Einstein called compound interest the eight wonder of the world, then exponential team growth based on better retention in your home based business would be the ninth.
About the Author
Mark Denekamp is an Expert Internet Network Marketer. "How to get your phone ringing off the hook with people calling YOU to join your business. Never buy a single lead."
==> http://www.markatlarge.blogspot.com
==> http://www.markdenekamp.com
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