Today, I want to educate you about the law of averages in MLM. Contrary to what you might have been taught in the past, this business is a NUMBERS GAME, initially. Once you sponsor someone into the business it becomes a people business and relationship business, but you must work through a large pool of people to find quality people to join your team and work with (and build relationships 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 will vary from person to person, when you factor in things such as skill-set, mind-set, timing, the company you are promoting, and quality of the prospects, but I’ve found that generally speaking, the numbers are the same for most people.
The law of averages is the idea that something is sure to happen at some time, because of the number of times it generally happens or is expected to happen. On the law of averages we just can’t go on losing. ~ Collins Dictionary
The Law of Averages in MLM
Here are some averages I have experienced during my own network marketing career. Everyone’s averages will be different, but this seems to be about the norm for most successful distributors I have talked with personally. I strive 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 watch a complete presentation.
- About one in every five people who watch 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 three rock stars in most companies to make a solid six figure income.
Assuming these numbers are true, and I believe they are (individual results will vary), here is what you could expect if you want to build a large and successful network marketing business.
- Talk to 1,875 people
- To show 375 presentations
- To sponsor 75 people
- To get 15 who do anything at all with the business
- To find your 3 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 matters is the number of people you talk to each day.
For instance, if you prospect just two people a day, you could work through these averages in a little over 2.5 years. If you talk with five people per day you could work through these averages in just shy of about 1.25 years. If you talk to ten people a day, you could work through these averages in about six months. How awesome is that?
The only question you must ask yourself is “how many conversations with new prospects will I have each day?” Once you pick a number, you must 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 500 people personally, yet make most of their income from the efforts of just two to three of those people. While 100 to 500 personally sponsored people sounds like a lot initially, if you sponsored just one person per week, you could knock this out in two to ten years. Not bad considering you are doing the business part-time!
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 in MLM work itself out.
How to Improve Your Averages
There are 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 to improve the law of averages in MLM 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. If it were me, I focus my efforts 100% on people with MLM experience and people who are entrepreneurial minded.
Comparing MLM to Baseball
I like baseball. How about you? Here’s something you should know.
When you look across the major leagues, only a select group of players consistently bat above .300. This group of players is paid MILLIONS of dollars each year because they are the best of the best. Yet, they fail 7 out of 10 times. Out of 1,000 at bats, they only get around 300 hits. The fail 70% of the time and still make millions of dollars.
Even more significant, the average player’s batting average in baseball is about .250. That means for every thousand at bats, they get 250 hits and fail 750 times.
When you compare the highest paid players in baseball, with the average players, there isn’t much of a difference. They get just 50 more hits out of the average 1,000 at bats than the average player, but they earn millions more. Wow!
There are some important takeaways from these numbers for network marketers. First off, you don’t need to bat .300 in MLM to make good money. Even if you can learn to sign up just 1 in 10 people you talk with, you can build a fortune. How, by working the numbers and putting the law of averages in MLM in your favor.
Secondly, if you can get just a “little bit better” than the average MLM Rep, which won’t take much, you can quickly differentiate yourself and earn considerably more. How do you that? By improving you skills, your experience, your attitude, mindset, and the quality of prospects you talk with. Food for thought.
Final Thoughts
In conclusion, these are my thoughts on the law of averages in MLM. When you work the numbers, everything else falls into place. You can’t control who gets in and who doesn’t get in the business, 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 the law of averages 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.
The law of averages is not a mathematical principle, whereas the law of large numbers is. … According to the law, the average of the results obtained from a large number of trials should be close to the expected value, and will tend to become closer as more trials are performed. ~ Bartley Law Office
Other Articles You Might Like:
- How to Deal with MLM Attrition
- How to Improve MLM Retention
- My Best Recruiting Tips
- Best Ways to Get Leads
- MLM Deception
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Sincerely,
Chuck Holmes
Network Marketing Professional (21+ years)
Top Recruiter & Top Rep
mrchuckholmes@gmail.com
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.
When you know what to expect, building the business is much easier.
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.
Getting a NO is actually a good thing. It means you are one step closer to a YES.
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.
When you go through the numbers everything works itself out.
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.
Thanks Richard. I really enjoy writing so it’s pretty easy for me.
Please define, “talk to.”
Invite to take a look at the business or products.
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.
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.
“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.
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.
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.