For good reasons, most people are put off by multi-level marketing companies. Most people who join these companies never make any money. However, if you are a solid marketer who knows how to build networks, MLM can actually be a viable way to build some financial freedom. Today, I want to share 10 pitfalls you must avoid if you want to find any success in this business.
Pitfall #1: Not Understanding How Multi-Level Marketing Companies Really Work
From what I've seen at Network Marketing or Multi-Level Marketing events, this is usually not your fault. Too many "successful" marketers brag about how easy making money in the company is if you just follow their system. What they don't tell you is that over 90% of people never earn any real money with their "system." They also don't tell you that often their success comes not from their skills as a marketer, but because they joined the business when it first launched. Thus, they were the benefactor of your hard work, not their own.
No viable business is going to let you build financial freedom only working during your limited spare time. Those of us who have successfully launched businesses know that your company has to be an obsession in the beginning. The same is true if you want to win with MLM. Come ready to work and don't fall for the Hawaii vacation pics they show you at the MLM pep rallies.
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Pitfall #2: Not Choosing A Company With A Quality Product You Actually Want To Sell
Multi-Level Marketing companies that focus only on building a downline while not selling a viable product are considered pyramid schemes by the Securities And Exchange Commission. If you have teamed up with a company that doesn't sell a high volume of an actual product, expect for them to get shut down by the SEC (this happened to a company I was in back in 2004).
That said, even if your MLM does sell a product, make sure it's one you would actually sell to a family member. No business is more impossible to succeed with than one where its owner doesn't believe in what its selling. Never forget that. And never join an MLM with a crap product (or no product).
Pitfall #3: Drinking The Kool-Aid
If you have ever been to an MLM seminar, you have no doubt seen the hype train antics shady sellers use to woo new members into their downlines. Don't believe the hype. Get the facts. If your presenter is not telling you the real truth about the business and its challenges as well as its victories, run!
I actually sat in an MLM pep rally (I mean seminar) where the women running it asked me to sit in the front and cheer at different parts of the presentation to give the illusion of excitement to other attendees. I told them to go jump off a cliff. You should do the same.
Pitfall #4: Bothering Your Friends And Family
Your mom and your sister do not want to be in your downline. I don't care how easy the MLM pep rally presenter told you selling them would be. Leave them alone. Learn how to do marketing and sales properly before you ever join an MLM. Or, at the very least, join an MLM that has a marketing and sales coach on their team who will help you build your business. I actually serve as a marketing coach for one of the MLM's one of my business partner participates in. If that type of infrastructure is already in place, you know you are working with a good team who values results over hype.
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Pitfall #5: Not Understanding How Marketing Actually Works
Many MLM sales reps wrongly believe that good marketing is just telling people about your opportunity. When was the last time you bought something simply because someone told you it existed? You must become an expert at finding the right audience for your products and services, telling them how those products and services will meet a great desire or need they have in their life, and showing them how working with you is going to benefit them more than working with one of your competitors or not working with anyone at all.
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Pitfall #6: Inconsistent Work Ethic
Another tactic of the MLM hype train is to convince you that you can build a 6-figure business only working a few hours a week. No one in real business has ever been able to do this and sustain it. And for those that would argue that you can show me examples of MLM members that were able to do this, I'll show you that the person in question either knows the owner and carried over an existing downline, or got started in the business when it first launched (or both).
Pitfall #7 Recruiting Versus Serving
Too many MLM members focus on recruiting new sales reps to build their business. This is a fundamentally flawed mindset and approach to success. Lasting success in business comes from serving the people who put their trust in you. MLM should be no different. If you want people to join your business or buy your product, you better be an expert and showing them how it's going to benefit them and not just you.
Pitfall #8: Failure To Set Goals
This ties into Pitfall #6. To stay the course with your business, you must have clear, concise, and measurable goals to keep you properly focused. In this process, make your goals something you can control. It's okay to desire 1,000 new members to join your downline. But your goal should be to serve enough people to earn the trust of 1,000 new people, not selling the people in the end. Set goals and then prioritize your actions to achieve them.
Pitfall #9: Not Knowing How To Sell
If you can't sell, your business is dead before it starts. Unfortunately, most newbies think selling is an art rooted in charisma and the gift-of-gab. Nothing could be further from the truth. Sales is a science. It's the science of building trust and rapport while adding disproportionate value to your client. If you don't know the formula to do this, you need to learn it immediately. There are tons of books on the subject and I even have a course I teach on mastering sales for new and veteran entrepreneurs
Pitfall #10: Being Boring
If you sound like every other salesperson your clients have already heard from, you're dead. Worse, even if you are decent at sales, you are probably dead. The world doesn't reward "decent" with financial freedom. It rewards the best. The people who stand out. Does your message and your value proposition stand out from your competitors? It better, or you are dead!
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