False Expectations in the MLM Industry

Of all of the different industries I have ever owned a business in (and I’ve been in a few), people in the network marketing industry were the least serious and least committed.  I believe that 95% or more of the people in the MLM Industry have false expectations about what it takes to build a successful business (of any kind).

I want to give you an example to put things in perspective.

The Reality of Starting a Traditional Business

When someone starts a traditional business (i.e. a restaurant, grocery store, dry cleaner), they typically invest several hundred thousand dollars (if not more) buying a building, equipment, inventory, getting their required licenses, insurance, etc.

They spend that money BEFORE they even open their business, with no guarantee of success.

Even after investing this much money in their business they don’t expect to make a profit in their first year or two. Most entrepreneurs hope that after three or five years they can recoup their initial investment (or most of it) and start making a decent profit.

They realize that there is no guarantee of success, and even if they do succeed, it will take several years to build a successful business.

They don’t expect to get rich quick.  They know they will have to roll up their sleeves and work harder than they have ever worked before.

More importantly, they quit their job and go full time in their new business, even though they won’t make much money right away.  They burn their bridges and commit to their new business venture as if their life depends on it!

They know there is no guarantee of success.

They know they will have to work hard for a few years with little to show for it.

They know all of these things, yet they still persist.

Now, let’s stop and think about network marketing for a minute.

What Network Marketers Do

People join a network marketing company for $300 or less (in most cases).

They get immediate access to free training and support.  They even get a free mentor.

They don’t need to take out a loan to start their business.  They don’t need a building.  They don’t need an inventory.  They don’t need to hire employees.  Heck, they don’t even have to give up their day job.

They can start their business part-time, while they still have their job security.

Yet, what happens?

Approximately 50% or more of all new reps quit within their first 90 days, and about 75 to 80 percent of all new reps quit by the end of their first year.  I do not have the statistical data from a third party source to verify that number, so I am speaking from personal experience.

The Problem with Network Marketers

Why does this happen?

I think it happens because people in our industry have false expectations about what it takes to succeed in the MLM Industry!

Most network marketers have never owned a business before, nor are they really qualified to be a business owner.  They are clueless about what it takes to build a successful business of any kind. They know very little about sales, marketing and owning a business.

They have a lottery mentality and think that by signing their name to a distributor agreement they can sit back and watch while their upline build their business for them!

They think they can find two serious people, then sit back and do nothing.

They think they can make a check for several thousand dollars, even if they invest less than an hour per month in their business.

This mindset creates lots of problems, including high attrition.

A Funny Story

I had a guy call me the other day.  He works in a manufacturing plant.  He’s been there almost 20 years and makes $20 per hour, which is about $800 per week or about $3,200 per month. He works 40 hours per week.

I asked him how much he would like to make in his new business his first month.  He said $5k.  I asked him how many hours he would be willing to work to get that.  He said 10 hours per week.

After I dropped my phone to the floor and laughed at him (in my mind), I got back on the phone and said “SERIOUSLY?”  You work 160 hours per month in your job to make $3,200, doing something you’ve been doing for 20 years, but you think you can work 40 hours your first month in your new business and make $5k?

Why is it people think they can make so much money, so quickly in our industry, without doing much work?

I just scratch my head and wonder about people’s common sense sometimes.

What Successful Distributors Do

On the other hand, when you study the successful people in the network marketing industry, you will notice some common trends.

They treat their MLM Business like they have one million dollars invested in it.

They work their business consistently, every day and every week.

They make time for their business and do not let life get in the way.

They have a vision for their business and see their success in their mind before it manifests into reality.

They take the time to develop the right skill set and mindset.

They persist, even when times are tough.

They have the “I can,  I will,  I shall” mentality.

They work their business consistently for five to ten years, working part-time, to build up a full-time income.

At the end of the day, achieving success in ANY type of business is hard to do.  Don’t believe me?  Just ask one of your entrepreneurial friends.

If you want to succeed in MLM, and make the big bucks, you need to have realistic expectations and you need to treat your network marketing business like a real business.

Only then will you have a shot at success.

Thinking you can get rich quick or get something for nothing will only lead to frustration and failure.

false expectations in mlmThe Truth

Just remember the following things and you will be good to go:

  • Network marketing is a viable business if you treat it like one
  • Network marketing has all the benefits of a traditional business without most of the headaches or risk
  • No one builds a successful, sustainable business in less then a few years
  • Your business is a business, not the lottery
  • You have to sow before you can reap
  • You need goals and a game plan to succeed
  • It’s going to take you some time to develop the right mindset and right skill-set

Final Thoughts

In review, most people in our industry have false or unrealistic expectations about what it takes to build a successful business of any kind.  Our job as sponsors and mentors is to ensure each new distributor has REALISTIC expectations about what it really takes to succeed.

What are your thoughts on this subject?  Do you think most people in our industry have false expectations?  Leave a comment below and let me know what you think.  I look forward to hearing from you.

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9 thoughts on “False Expectations in the MLM Industry

  1. Diamond Grant

    Too many people think MLM is a get rich quick scheme, and when they aren’t rich quick enough they bail. This isn’t some system you can finesse to get money. You really have to be dedicated and committed in order to achieve the financial freedom that most people want to enjoy. Persistence- even when it’s hard, even when you aren’t earing a lot, even when people on your team are quitting- you have to remain dedicated. I think a lot of people will find that with just a bit more investment of time they will get where they are trying to go.

    Reply
    1. chuckholmes Post author

      No legitimate business is a get rich quick scheme. Talk with any successful entrepreneur and you will quickly discover they invested YEARS of their life to build a successful business, typically at least 10,000 hours of work. It’s too bad so many folks in our society are looking for a quick and easy way to get rich. Noting worth accomplishing is fast, free or easy.

      Reply
  2. Scott

    Hey Chuck, great article!

    Here are some of my observations…

    Many people who come into NM do so after being recruited in. In other words, they may not have really been looking for a business. They had to have a pitch that made them believe that doing A-B-C actions would have yielded X-Y-Z results.

    I have been told, and told to others, that all you have to do is “share with your friends”, and “teach them to do the same”. This can be done casually or by making a list and reaching out to them (they use the “like recommending a movie or restaurant” example). This in fact seems to be the only true universal training for any NM company – the only thing that is truly duplicatable (duplicable?) for all without incurring extra costs or needing special skill sets.

    What happens when that doesn’t work or duplicate? We have to somehow continue to grow our list.

    When I (and others) shared the product and said you can make money by doing the same – we found out that not everyone jumped on board with our same level of excitement…

    At this point people will drop out – and here’s why: uplines/leaders will say work harder. In my opinion it’s not a matter of working harder. Anyone can put in more effort (if they know that their actions will in fact yield a result). It’s also not just a matter of working smarter – in my opinion being successful in NM comes down to doing things waaaay out of your comfort zone – and then continuing to do those things based on faith that they *may* eventually work. To be successful, we have to eventually do things that may just down right feel completely unnatural for 95% of the people.

    Approaching strangers? Trying to steer *any* conversation towards a situation where you can pitch your opportunity or products can make the average person feel creepy or awkward… It’s very unnatural.

    The minute that the average person comes up to a wall such as this, is when the mind starts to reason that this is not worth it, it won’t work, and they wouldn’t ask/expect anyone else to do this.

    I think people can see the beauty of residual income – and will “give it a shot” and do what their sponsors say – such as “throw a home party” or “just share products with some friends” in a casual, non-pressuring kind of way – that it can be done in your spare time…

    But when that doesn’t work – and people have to resort to things they don’t wanna do, or are told to do things they were never told they had to do initially – they back out.

    It’s at this point that uplines say to be successful, you have to work harder or put in the effort or say things like: “What??? Did you expect full time money from part time effort?”

    Since your article was about setting false expectations, how do you advise working with one’s approach market (either warm or cold) about the truth of this industry?

    We have a very limited window of opportunity with a very limited amount of prospects – it’s difficult to be fully transparent with them. People can end up saying the same things that were told to them to get them in. We certainly don’t wanna say things like “you have to go to your family and friends” or “use the 3 foot rule”, or that “95% of the people in this industry actually lose money”

    I do think that the outer edge of your marketing funnel should be based on numbers… When people come into your funnel, let them know it is network marketing and success in this industry does come down to successful promotion. The easiest way of doing that is to share with your family and friends – people in your sphere of influence, but when they can no longer do that, then you have to find ways to promote. Advertising, shows, flyers…

    This is why identifying your why is so important – it should take you through these low parts of your journey.

    From there we need to hone our skills on how to effectively network and market/promote without feeling creepy (a skill to be learned) and teach our new members how to do the same…

    Reply
    1. chuckholmes Post author

      What a great comment Scott.

      One thing you can do is tell people it will be difficult right upfront. Prepare them for rejection and disappointment.

      I tell all my prospects that accomplishing anything worthwhile is difficult, yet rewarding if you can do it.

      Also, it’s not easy to build a successful business of ANY type.

      This scares some people off, but it always mentally prepares people who do decide to join.

      One of the reasons I focus on just leading with products and retailing is I know that MOST people will not be interested in joining the business opportunity and most people who do join the business opportunity will quit within 90 days.

      I think just trying to sponsor people is a complete waste of time (just my thoughts).

      By retailing, I get people using the products and many of them who enjoy them will eventually upgrade to a wholesale buyer or business builder.

      And that is the type of distributor I want: someone who loves the product and enjoys selling them and sharing them with others.

      My goal is always to create volume, not sponsor.

      I hope that helps.

      Reply
      1. Greg Boudonck

        I have said this in some of your other posts, but just have to say it again. I believe the main reason you have found success in network marketing is because of your honesty. So many others in this business are not honest and it has hurt the MLM industry terribly. If more people were straight up and honest, more people would have an understanding that there are no over night riches in the business, and they would work harder. Thank you for following good morals and using honesty as the best approach.

        Reply
  3. Greg Boudonck

    I believe Chuck, that some of this mindset comes from some of the advertisements that are used. they say things like get rich quick, or make 1,000s in 30 days. This kind of ad scheme sets people down the wrong path. It also gives all MLMs a bad name. If traditional businesses use bad approaches in advertising, similar thought patterns arise and can make all businesses in that category look bad. A prime example of this is pawn shops. There are many reputable pawn shops, but there is a huge mentality that they are all businesses that accept stolen property.

    Reply
    1. chuckholmes Post author

      The reason you see so many advertisements about getting rich quick is because they work. That is what appeals to most people. Imagine seeing an ad that says you will have to work your ass off for the first few years and not make a penny, but if you stick with it for five to ten years you will build a dynasty. No one would respond to that ad, even though it is the truth.

      Reply
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