The Law of Averages in MLM and Network Marketing

Today, I want to educate you about the law of averages in MLM.  Contrary to what anyone else might tell you, this business is a NUMBERS GAME, initially.  Once you sponsor someone it does become a people business, but you have to work through a large pool of people to find quality people to join your team and work with.  Anyone who tells you otherwise is lying to you!

Even if you are an excellent recruiter, MOST people will tell you NO.

Like any other selling profession, there is a law of averages in our industry.  In other words, if you work through a certain number of people you should expect a certain result.  It might vary slightly from person to person, when you factor in things such as skill-set, mind-set, timing, and quality of the prospects, but I’ve found that generally speaking, the numbers are the same for most people.

Here are some averages I have experienced during my own network marketing career.  Everyone’s averages will be a little bit different, but this seems to be about the norm for most successful distributors I have talked with personally.  I like to be a little bit conservative, so don’t be surprised if your own numbers are a little bit better than this.

  • About one in five people you prospect will agree to see a complete presentation
  • About one in every five people who see a complete presentation will sign up as a distributor
  • About one in every five people you sign up as a distributor will do ANYTHING at all do build their business; the other four will do NOTHING and quit
  • About one in every five distributors who do anything at all will be a rock star
  • You need about five rock stars in most companies to make a solid six figure income

Assuming these numbers are true, and I believe they are, here is what you could expect if you want to build a large and successful network marketing business.

  • Talk to 3,125 people
  • To show 625 presentations
  • To sponsor 125 people
  • To get 25 who do anything at all with the business
  • To get your 5 superstars who are responsible for 90% or more of your income

Putting It in Perspective

This might sound impossible to do, but it’s not, especially if you break it down into bite-sized chunks.  The only thing that really matters is the number of people you talk to each day.

the law of averages in mlmFor instance, if you talk to just two people a day, you could work through these averages in a little over four years.  If you talk to five people a day you could work through these averages in just shy of two years.  If you talk to ten people a day, you could work through these averages in about ten months.  How awesome is that?

The only question you have to ask yourself is “how many conversations with prospects will I have each day?”  Once you pick a number, you need to have the discipline to actually do it.

It’s also important to note that most top earners in our industry have sponsored somewhere around 100 to 200 people personally, yet make most of their income from the efforts of just two to five of those people.

Why People Don’t Join Your Team

There are a variety of reasons why people don’t join your team.  First off, not everyone is cut out to be an entrepreneur.  In fact, most people aren’t.  Most people have no desire to start their own business and be their own boss.  In addition, not everyone is open minded to different ways of making money.  Most people have been taught to get a job from the time they could walk.  So don’t be shocked when people think what you do is crazy.

Other people simply aren’t a good fit for your company or network marketing.  It really has nothing to do with you.  Each person you talk to is different.   Accept it.  Embrace it.  Look for people who are looking.

Don’t take the No’s you get personally.  Just work through the numbers and let the law of averages work itself out.

How to Improve Your Averages

There are really only two ways to improve your averages as I see it.  The first thing you can do is improve your skills.  Become a student of your business and make a decision to become a network marketing professional.  Learn everything you can about the industry so you can offer value.  Remember that people don’t join businesses, they join people.

The second thing you can do is talk to better qualified prospects.  Identify a specific target market and focus most of your marketing and recruiting efforts on people in that target market.

Final Thoughts

There you have it folks.  These are my thoughts on the law of averages in network marketing.  When you work the numbers, everything else falls into place.  You can’t control who gets in and who doesn’t get in and you can’t control who gets in and does the work and who doesn’t, but you can work through the numbers and let nature take its course.

I would love to hear what you think about the law of averages in MLM.  Do you think the numbers I shared are realistic and accurate, or do you think I am way off?  Leave a comment below to let me know what you think.  I look forward to hearing from you.  Have a great day.

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Chuck Holmes


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15 thoughts on “The Law of Averages in MLM and Network Marketing

  1. Mickiyas

    The law of averages is a great concept.

    Most beginners have wrong expectations about MLM. They expect that all the people they talk to will join their business, and give up after the first rejection. But when you know what to expect, you’ll learn how to accept rejection, but most of all, you can figure out how many people you have to talk to each day.

    Thanks for the priceless info.

  2. Diamond Grant

    A “no” is less about you and more about them. I now take “no’s” as a compliment, because I am happy that the other person is being upfront and honest with me about their lack of interest versus others who say yes and then waste a lot of time and ultimately drop out. Take a no as getting you closer to a person who is going to be a good fit, rather than a denial of you.

  3. Mickiyas

    The law of average is a great concept. Most beginers have wrong expectation about MLM. They expect that all the people they talk to will join thier business, and give up after the first rejection. But when you know what to expect, you will accept rejection, but most of all, you can figure out how many people you should talk to each day.

    Thanks for the priceless info.

  4. Richard Brokenshire

    Hi Chuck,

    You’re welcome for the iTunes reviews! My pleasure. I wanted to say congratulations!! I’ve been following you and your blog for a couple of years now. I’ve also been watching your Alexa number dropping. Well done!!

    One day you’ll have to teach me how to write 54 blog posts in a month.

      1. Howard

        In that case, the one in twenty indicates there was no interviewing and qualifying being done. It indicates a throw mud on the wall and see what sticks approach. Most people using that approach usually quit before they get to 20. Your successful networkers today opt for the more intelligent approach of taking the time to perform a quality interview to sift and sort through the people they meet to find the ones they trust and respect and want to become friends with.

        1. chuckholmes Post author

          I believe you have to go through people to find people you can do a quality interview with. That’s all. I think working through the numbers is sifting and sorting. You have to throw mud on the wall to quality people, set appointments and do presentations. Not everyone is going to be a quality prospect. Your job is to find them by working the numbers. Just my two cents.

          1. Howard

            “Throwing mud on the wall,” to me at least, is showing your sales and marketing plan to anybody that is breathing and seeing if there is an interest. Most all the networking leaders that I know reject this approach as a waste of time. Also, it give the industry a black eye because many of the targets of this tactic are offended by it and some have become very vocal critics.

            On the other hand, meeting people and having a friendly conversation with them can lead to one deciding if future meetings can lead to a friendship. In this way one can decide if their new acquaintance is trustworthy and responsible. For example, if you schedule a meeting with them and they fail to keep it and don’t have the courtesy to cancel it, they have proven themselves to be unreliable and unworthy of trust. You have just saved yourself time and further disappointment. They are NOT somebody you want to become “friends” with.

            One should work the numbers with those that you pre-qualify as genuinely looking for a business opportunity, NOT a job. Those that are interested should go through an education “process” to teach them about “the Company,” its products, and its business plan. This should be a slow and underwhelming process of several weeks before they are allowed to “sign up.” Their trust and belief in their new venture is strengthened; slowly but surely. They are free to change their mind at any time. None of this waiting costs them any money. If at any time either party decides to end the process, there should not be any hurt feelings. All that has been lost is a little time and they may become a valued customer.

            Some of us still opt for leading with our products (as above) and later suggesting that our satisfied customer become our partner. After all, some of the highest performing industry leaders started out as satisfied customers. Obviously, this is a slow way to build a large business, but it is also the way to build a more secure business. There is much less turnover.

          2. chuckholmes Post author

            I define throwing mud on the wall as talking to anyone and everyone, in order to pre-qualify people that you can eventually show the plan too. Even when you have regular conversations with people, and make a friendship, most people are not going to be interested in the business opportunity. I’d rather work through a large pool of people quickly, in order to find people who raise their hand and want to learn more about what I do, than spend a lot of time with any one person who probably won’t join anyway. Just my two cents.

          3. Greg Boudonck

            Wow, this has turned into quite the debate. I wanted to step in on this conversation and say to Howard that I don’t believe Chuck is necessarily throwing mud against the wall. He is talking about just telling people about the products and opportunity and allowing them to speak. In most cases, the person will either their self qualify or disqualify. Essentially, this is the process of qualifying. You cannot look at a person and qualify them, you have to talk with them.

            Also you mentioned not being friends with someone in this regard. Howard, you are putting “friendship” as a prerequisite to someone saying yes to the business. I have many friends who are not, nor will ever join the business, and that is fine. It is actually that notion that gives network marketing a black eye.

            Just my 2 cents.

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