Welcome to Day 2 of my MLM Boot Camp.
There is a popular saying that 97% of all network marketers fail. I personally don’t believe those statistics.
I think these numbers are skewed because people join our industry for a variety of different reasons. Some people join to be part of a social club and meet new friends. Others simply want a discount on their products. Some folks join because they want to make enough money to get their products for free each month.
Some people want to supplement their income with an extra few hundred dollars per month. Only a small percentage of the people who join our industry (less than 1%) want to to do this full-time!
The 97% failure rate includes all of the people mentioned above. As I see it, calling everyone who doesn’t make money in our industry a failure is fundamentally flawed, especially if most people didn’t join to make the big money.
If you were to honestly evaluate the failure rate of people who work their network marketing business 10 to 20-hours per week, every week, for two to three years, the failure rate is actually quite small. Of course, I don’t have the statistics to give you the exact percentage.
What I do know from personal experience is that less than 1% of the people I’ve worked with actually treat it like a real business, and work their business consistently each week. If I had to guess, less than 1% of the people who do join our industry treat their business even as seriously as they would a part-time job!
If you’re struggling in network marketing you need to be honest with yourself. How serious are you about your business? Honestly? Do you have a written business and marketing plan? Do you have a work schedule? Is your calendar booked with appointments? Are you doing the activities you know you should be doing, every single day: retailing and recruiting?
Ultimately, you must decide if YOU are going to treat this like a hobby, or treat it like a real business. Until you make the decision to act AS IF you have ONE MILLION DOLLARS in your business, you will never make the big bucks in network marketing. Fact.
Why People Fail in Network Marketing
In the paragraphs below, I will cover some of the common reasons people struggle in our industry. I hope you will evaluate yourself in each area. Keep in mind this is just my opinion and we can agree to disagree.
Reason # 1: No Skills
Every profession requires a basic set of skills if you want to succeed. Accountants, lawyers, doctors, salespeople, and engineers all require specialized knowledge. Even if you want to work at McDonald’s or Wal-mart, you would be required to go through their training program and develop some basic skills. This industry is no different.
The basic skills in network marketing are prospecting, inviting, selling, closing, launching new reps, and promoting events. Very few people JOIN our industry with these skills already in place. It will take most people working their business part-time 12 to 36-months to truly master these skills. Yes, you can earn while you learn, but you will never make the big money until you really know what you are doing.
Sadly, very few people stick around long enough to master these basic skills. Instead, they try the business for one to three months and then say it didn’t work. On the other hand, I’ve never met one top earner or successful rep who hadn’t put in the time and mastered these basic network marketing skills.
Reason # 2: No Leads
Leads are the lifeblood of EVERY business. Without leads, you won’t be in business very long. More importantly, you need qualified leads for your network marketing business.
Although there are many different ways to get leads, the best way to get leads is to generate your own leads. If you have a constant flow of 2-10 new leads coming into your business daily, you will position yourself for long-term success in your business.
Most people have no clue what to do after they work through their warm market! You really have two options. You can chase people, beg, pressure and try to sell them on your opportunity, or you can take the time to learn how to get people to contact you first.
Show me someone who can generate leads 24/7 on demand and I will show you someone who will succeed in any business. Some of my favorite ways to generate leads include blogging, podcasting, video marketing, mailing postcards, drop cards, and doing live and online events.
Reason # 3: Unrealistic Expectations
It’s sad that I have to include this on my list, but it’s true.
People are funny. They will work in a job for 10-50 years and be completely broke, yet they join our industry and expect to make big bucks their first month, even if they only work their business a few hours. I just don’t get it.
This lottery mentality destroys tons of new distributors, normally within their first 30 to 90-days.
Sponsors need to “keep it real” with their new people and tell them whether or not their goals are realistic, based upon the time-frame of the goals and the person’s actions and skill-set. They need to let their prospects know that all businesses take time to make a profit.
Most businesses in the real world take two to three years just to get profitable, and five to ten years to become successful and stable.
As a sponsor or upline, we must ensure your new distributors have realistic expectations. Having a big goal is fine, IF someone is willing to work hard over a sustained period of time to get it. However, if they expect big results right away, they are only fooling themselves.
Reason # 4: No Mentor
All successful entrepreneurs have a mentor, normally several. If you want to succeed in your network marketing business, you need a mentor.
You must work with someone who can teach you how to be successful, using proven techniques. This person doesn’t necessarily need to be your sponsor, but you do need to find a mentor (preferably in your plugged in upline) who is successful and knows what they are doing. You also want someone you can get along with, who is accessible, and is WILLING to help you.
Most people join this industry and try to reinvent the wheel and do everything on their own. This is a HUGE mistake as I see it. Remember, network marketing is about DUPLICATION. If it ain’t broke, don’t change it.
I believe that the person you partner up with is even more important than the company you choose. If you don’t have a mentor in your current company, you can find mentors through books, online videos, and blogs. Some of my favorite mentors are:
These folks have helped me immensely and I have never met ANY of them in real life.
Reason # 5: No Daily Mode of Operations
We are all creatures of habit. We all have daily routines for our lives. We wake up at a certain time, eat the same breakfast most days, drive to work the same way each day, get off work at the same time, watch the same television shows each night, etc.
To succeed in our industry you need to create new habits. You need a work schedule and game-plan for each day, so you know exactly what you are going to do each day to grow your business.
One of the biggest reasons people tell you they can’t join or build the business is because they don’t have enough time. I’ve found that IF the business is important to them, they will make time for their business. If not, they will make an excuse.
You need the self-discipline to set aside one to two hours per day to build your network marketing business and you must have a “to do” list when you work. You must focus on the money producing activities during that time and you must work your business every day, at least six days per week. (See an example daily mode of operations).
Reason # 6: Not Working the Numbers
This business is a numbers game. It is a business of exposures. You can’t talk to a few people, get rejected, and then say the business doesn’t work.
The people who succeed in our industry are the ones who make the most exposures. PERIOD. The only difference between the person on stage at your company’s event, and you, is that they made a ton more exposures and got a lot more rejection than you did.
If you aren’t talking to new prospects each day, you won’t make it. This is one of the most common reasons people fail in MLM.
Until you’ve approached at least 1,000 people about the business and/or products, you haven’t even given yourself a fair shot at success.
Reason # 7: The Wrong Mindset
One of the biggest struggles most people in our industry have to overcome is the wrong mindset about their business.
Most people who enter our industry have been employees their entire life. There is nothing wrong with being an employee. The world needs great employees. However, to succeed in business, you need to learn how to think like an entrepreneur.
Thinking like an employee when you are building a business will actually hold you back. Most people with an employee mindset only know how to trade hours for dollars. When they work their business 10-hours and don’t get paid for 10-hours worth of work, they get frustrated and quit. Or, they call it a scam.
Your business is not a job. It’s a business. Big difference. As an entrepreneur you are building an asset with an equity value. You are building residual income, not linear income. It’s going to take time to make this happen, probably several years.
Another mindset challenge a lot of people deal with is low self-esteem, worthiness issues, and low confidence. That described me when I first joined the industry in 2002. You must work on your mindset and attitude, and focus on your personal development.
To be successful, you must change. You must improve your attitude, mindset, people skills, leadership skills, and countless other things. THIS WILL TAKE TIME.
Fortunately, you can earn as you learn. We all enter the business with a different level of experience, mindset, attitude, and skills. It’s the people who master the skills and mindset the fastest that typically do the best.
As Jim Rohn says “work harder on yourself than you do in your job.”
Reason # 8: No Focus
It’s hard to peel two potatoes at once and be successful. Most people spread themselves way too thin, by trying to do too many things at once.
I’ve been there and done that. I still own several businesses. It’s hard to keep up with all of them at times.
When it comes to MLM, most network marketers try five or ten different marketing or advertising strategies at once. Or, they switch companies every 60 to 90-days when they aren’t getting the results they desire. Or, they try to build multiple companies at once.
Focus, consistency, and discipline are the key to success in life and network marketing!
You need to pick one strategy to grow your business and then take all out MASSIVE ACTION until you have it mastered. Pick one business and focus on it exclusively. Very few people can successfully build more than one business at a time.
And remember, what you focus on is what you get.
Reason # 9: Not Being Coachable
It hurts me to write this one because I violated this rule for many, many years.
Remember, network marketing is about DUPLICATION. It’s not about reinventing the wheel. It’s about having a lot of people doing a few simple things CONSISTENTLY, for a sustained period of time.
One of the biggest reasons most people fail in our industry is that they are not coachable. I see this daily in my own team.
They don’t want to do what their plugged in upline recommends, even though it has been proven to work. Instead, they want to reinvent the wheel and do it their way.
99.99999999% of the time this leads to disappointment, failure, and frustration. Why? Because you don’t know what you don’t know. You might be an expert mechanic, mom, lawyer, doctor, accountant, husband, or clerk, but network marketing is a different beast. What works in your day job, in most cases does not convert to network marketing success.
This is a team sport. Do not try to reinvent the wheel or do it your way until you have earned at least $100k with your company. Until then, do what works. Follow your plugged in upline’s guidance and DO what they TEACH you.
Reason # 10: Working with the Wrong MLM Company
Although the company you choose isn’t the most important thing, some companies are MUCH better than others. Some companies have strict policies about how you can promote their business opportunity online and offline.
Other companies have crappy compensation plans. Some even have a non-compete clause that keeps you from doing multiple projects.
You need to find the right company at the right time. You should do research on your potential network marketing company like you would if you were investing $100k in a franchise.
You must know what you are getting yourself into. Ideally, you want a company with a product or service you are extremely passionate about. It also helps to team up with a company that is still under radar and is not a household name yet. Ideally, you want a network marketing company that is around 5-years old, but still in the pre-momentum phase.
You should also know that most top earners have been with SEVERAL companies BEFORE they eventually found their forever home. So if you don’t do well in your first company, don’t give up. There is probably something out there that is perfect for you. You just have to find it.
Final Thoughts
In conclusion, these are the 10 most common reasons people fail in network marketing, as I see it. Obviously, there are many other reasons too.
I learned a long time ago that knowledge is power. Just knowing these common reasons for failure can give you a major advantage over people who don’t know about them. Make sure you study this list and evaluate yourself in each area. Identify areas you can improve upon and develop an action plan to move forward.
In tomorrow’s message, I will give you the top 10 things you need to do to succeed in network marketing. Have a great day!
Chuck Holmes
20+ Year Network Marketing Professional
Top Earner & Top Recruiter
Email: mrchuckholmes@gmail.com
P.S. Learn how to grow a successful network marketing business. Secret tips, training, and practical ideas. Free training delivered by email.
This is great content Chuck! I am in need of working on my people skills. I am trying to develop a system that my team can follow to get results. I see that I have to guide people along the way. Everyone is not like me trying to figure it out. Thank you for your knowledge.
Sadly, most people who join our industry are not go-getters. Yes, you will need to do intensive hand holding for most new reps. It’s just is what it is. That being said, you are ultimately looking for more people like yourself.
Thanks Chuck. These are great lessons. I was in a company that I was passionate about once or twice upon a time. When I immersed myself into the work, I got results. I am a people person and have worked with and seen many personalities especially in sales. This is not a convincing business its a sorting business. The work became fun and that is very crucial and yes it was tough at times but, my passion became a burning conviction, an urgency that is not a fleeting moment when we no how to handle rejection. When i sold products door-to-door I looked forward for my first NO. Once I got past that tailgate reluctance and went for it that NO turns into a yes. Rejection is part of it, depending on how many people I’ve talked to in a day, the ACTION and putting in the time pays off. I am thrilled about this company and have always been into health and wellness and I see the vision, a bigger picture. Regenalife is positioned for critical mass and momentum and the timing is now and could not be a better time to join.
I have made money in MLM before and have seen where corporate integrity was shady in certain companies. Thanks for this training and the comments are great.
Chris DiNunno
Glad you enjoyed the training. It helps to have a company and product line you are passionate about. I also agree with your point that we are in the sorting business, not the convincing business. Trying to convince people is an absolute waste of time, money, and effort.
Great advice. I do believe that people are stuck in the employee mindset and don’t think outside for the box. I was one of those people that tried several marketing strategies at once and quit when I received few responses. It is hard to build a business but you just have to believe
Anything worth accomplishing is difficult, especially in the beginning when you are new and inexperienced. Network marketing is like any other industry in that it takes time, hard work, and money to launch and grow a business, normally several years. Plus, you must invest the time and money to develop and fine tune your skills, if you want to succeed.
When I was reading your comments about people joining you in business who are not in sales or marketing or that do not have an entrepreneurial spirit, I was nodding my head. When I first started out, I remember rather sheepishly, convincing people to start their business who I really shouldn’t have. They didn’t have the vaguest idea how to even talk to people. It was awkward and I felt terrible. I was happy to do all of their presentations for them, but after awhile, they fizzled out. I couldn’t do everything for them, although sometimes I tried.
Being in sales and marketing put me in an arena where I was constantly meeting new people. I was also a member of a few sales organizations. I highly recommend joining one. Many of them will help you learn to give a professional “1 Minute Commercial” of what you do or just help you in general learn how to present yourself. Many of them require lead sharing amongst it members. These are usually great organizations that lead to personal growth that leads to being more successful.
I think it’s best to lead with the products, get a customer, and then gradually upgrade them into a happy distributor.
In my opinion this sort of information is crucial to success. It’s important to know what to do, but it’s equally important to know what NOT to do.
I couldn’t agree more!
Hi Chuck,
I think most people fail because they are told to approach people with a business opportunity. This one thing is the end of most network marketers. Approaching someone with a business opportunity is pretty much the same thing as public speaking. Most people would rather die than to have to do public speaking. Learn to advertise to attract prospects to you!
Which brings me to the second reason most network marketers quit. They are not profitable. Between advertising costs, auto ship of products and paying for books, tapes and other motivational materials, they simply can not make any money.
If you sponsor someone and would like them to stay in your organization, I would suggest that you help them to get into profit as soon as possible! Because no one quits a business that they are making money from!!
In most “traditional businesses” it takes one to two years JUST to make a profit, and sometimes longer.
Expecting to be profitable in your first year of MLM is pretty unrealistic.
Yes, you can make small profits by having some retail customers, but the truth is, you have to feed your baby. And your business in your baby.
Any money you do make, if you make any at all, should be reinvested back in your business.
People who buy a McDonald’s aren’t making a profit after 90 days, so I’m not sure why MLMers expect to be.
You’ve given me a lot to think about. I am slightly overwhelmed by ‘marketing systems’ and am looking forward to reading more about them in future boot camp lessons. Everything I’ve done in terms of marketing, I have done myself, so finding a mentor is a little intimidating. I am learning a lot through your site, though!
Glad my site is helping. Learning marketing is one of the greatest skills you can develop.