The Five Phases of Your MLM Business

I believe that there are five phases for every distributor’s MLM Business.  These are different phases that ALL distributors go through while building their business.  Each phase will last a different amount of time for each person.

Once you understand these different phases, you will have a better understanding of what to expect in your own business and you will also be able to give your new team members realistic expectations.

Phase One: The Warm-Up Phase

This phase begins when prospects are first exposed to network marketing.  It doesn’t matter if they have prior experience in the industry or not.  In most cases, this phase starts when someone is introduced to network marketing.  During this phase, the following things should happen:

  • The prospect orders the products as a customer first to see if they like them
  • The prospect researches information about the company, products, and sponsor online
  • The prospect visits the company’s home office to meet the leadership team
  • The prospect talks with several successful people in the company to learn more
  • The prospect researches the network marketing industry

This phase can last anywhere from one hour to several months, depending upon the person. I tell everyone to be smart and at least spend a few days doing their homework so they can be informed and make an intelligent decision about the business.

Some folks are excited during this phase.  Other folks are neutral.  Not everyone who goes through this phase becomes a distributor.

During this phase, it’s your job to provide concrete information, to answer questions and lead your prospect through the research and follow-up process.  You should share business tools and company information so your prospect can conduct their research process.

Phase Two: The First Month

This phase begins when the prospect commits to becoming a distributor and officially joins the company.  This phase lasts the first 30 days in the business.  Some of the things that should happen during this phase include:

  • Distributor places their first order
  • Distributor receives initial training call/session from upline
  • Get plugged in to conference calls and local meetings
  • Determine goals and commitment level
  • Create name list and schedule appointments
  • One on one coaching and feedback
  • Determine how much time they will invest in the business

As you probably already know, this is a very “sensitive” and “fragile” phase for most distributors.  Typically, they have a high level of initial enthusiasm, but they are clueless about what to do and how to build a successful network marketing business.

As a sponsor, your job is to teach and help your new distributor.  You are their coach.  You need to give them realistic expectations, create an action plan for them to follow and help the distributor get started right. You should work closely with them during this phase, and work in their sphere of influence to get a few people sponsored and help them find some new customers.

Most distributors will be “lost” if you don’t work with them closely, especially if they are brand new to the network marketing industry.  Once you sponsor someone, your job as a sponsor is just beginning.  If you don’t do your job right during this phase, there is a good chance the person will quit by the end of their first month.

Phase Three: The First 90 Days

This phase starts on day 31 and ends on day 90.  This is quite perhaps the most susceptible time in a network marketing business (other than the first 30 days).  Of all the people who do quit your MLM Team, most will do so during the first 90 days.

I’ve found that anyone can stay excited about anything for about 30 to 90 days.  After that, the initial enthusiasm disappears.  If the prospect isn’t making much money in their business by this point, there is a good chance they will fizzle out and quit.

Some of the things that should happen during this phase includes:

  • Attend a big company event
  • Meet everyone in upline by phone or in person
  • Develop a product story
  • Develop good product knowledge
  • Have three to ten people personally sponsored and five to ten customers
  • Upline working in depth under the person
  • Initial training complete
  • Person plugged in to system and fairly self-sufficient

You want to ensure the person has written goals, has a growing team, and that they are plugged into your success system.

Once again, you will work closely with your new team member during this phase, by holding their hand and helping them one-on-one.  By the end of this phase, they should have a solid understanding of what they are doing in the business.  Read more about the 60 to 90 day rule in network marketing.

Phase Four: The First Year

Phase Four covers the first year in the business. This phase starts at the end of the first 90 days and lasts another nine months.  If your distributor survived the previous phases, you’re off to a good start.  In most cases, this phase will determine whether someone becomes a serious distributor, stays a wholesale product buyer, or just works as a part-time distributor.

Your job as a sponsor during this phase is to transfer most of your knowledge to your team member, so they have the information they need to build the business on their own.  It doesn’t mean that they will go out and do it, but at least they know how to.  They should be pretty self-sufficient by the end of year one and only need help from you once in a while.

During this phase, you want to get your distributor to the annual company convention, make sure they follow your success system, and that they have a daily action plan they can follow to grow their business.

I’ve found that “most” people who make it past their first year with a company stick around for a long time.

Phase Five: Long-Term Commitment

Not too many folks on your team will make it to this point (probably about 10-15%) but the ones that do are your leaders and future leaders.  Ultimately, your goal during the first year is to build a good relationship with each new team member, a true friendship.

the five phases of your network marketing businessAfter year one, your primary focus is on building LEADERSHIP.  Your distributor should already be trained on the business side of things.  Your job is to help them with personal development and improving their skills, mindset and attitude.

Once people make it to this phase, they won’t need you much anymore (in most cases anyway). They will be the contributors in your team who are responsible for most of the growth.

Many of the folks who make it to this phase will simply be long-term product users.  A select few will be long-term builders.

Final Thoughts

There you have it folks.  These are the five phases of any network marketing business as I see it. Your job as a sponsor and upline is to make sure that your team members make the transition from phase to phase successfully.  Follow the advice in this post and you should be well on your way.

What are your thoughts?  What do you think about these phases?  Leave a comment below to let me know what you think.  I look forward to hearing from you.

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7 thoughts on “The Five Phases of Your MLM Business

  1. Diamond Grant

    Charles, you said that most people who make it through their first year tend to stay for a long time and I agree. It’s just about helping them to get through that initial first year that sometimes proves to be problematic. I like to let my team know that I am there for them as a source of knowledge and support and I try my best to make myself as readily available to them as I can so they can rely on me for guidance.

    Reply
  2. Tristan H.

    This is a logical, easy-to-follow breakdown of the MLM business phases. All the phases are almost equally important, so it’s difficult to choose the most significant one. However, I think Phase 2 is perhaps most important because it’s a very crucial time for both the prospective distributor and sponsor. The prospect is really getting into the thick of things and deciding how much time and energy they are going to dedicate to the company,while the sponsor mentors, trains, orients, and pays close attention to the prospect to keep them from losing excitement and quitting. Tough work for both sides!

    Reply
    1. Greg Boudonck

      I actually think the most crucial stage is #3-the first 90 days. It is my opinion that the first 30 is still fun and enjoyable. It is after those 30 that a person starts seeing some negatives. It is whether the sponsor can show where the positives far outweigh the negatives where we will find if the prospect will stay diligent.

      If a sponsor will always be nearby to help the prospect, along with the rest of his/her up line, the odds of them lasting are good. It is always important that the prospect understands that they can contact their sponsor at anytime. This will help them through those depressed times.

      Reply
        1. Greg Boudonck

          You are so right. It takes a very long time to build a completely successful business of any kind. I just believe that if you can get a prospect through those first 90 days, they will gain momentum and start to grow the business.

          It can take years to truly have any success in a business. While you may be making profits sooner, so much of those profits should be put back into the business to help long-term growth. This is where many falter.

          Even if we are showing success, that is not the time to lay back…it is actually the time to work harder.

          Reply

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