The MLM Revolving Door Syndrome

Today, I want to talk about the MLM Revolving Door Syndrome.  Talk to any successful person in the network marketing industry and they will tell you about the revolving door in their business.  If they put 10 people new in their business this month, most will drop out within the first 90 days, and typically all but one or two of them will drop out by the end of the year.

These successful reps have to keep REPLACING reps who quit, just to maintain their business.

People quit MLM for a WIDE variety of reasons such as:

  • Unrealistic expectations
  • Not making money
  • Not willing to work
  • Wrong industry for them to do
  • Job or broke mindset
  • Poor training
  • Lack of discipline

In most cases, there isn’t much you can do to keep people from quitting your business.

However, there are a FEW things you can do to improve your retention, somewhat.  You can build depth, provide weekly training calls, try to sponsor quality people, and work closely with each of your team members.  You can help your team get off to a fast start and make a profit in their first month.  None of these things are a guarantee that people will stick around, but it might help a bit.

All of these things will help with the MLM Revolving Door Syndrome, but they won’t eliminate it.

That being said, there is ONE thing you can do that will really make a difference with retention in your business.

I’ve talked about it time and time again on this website and I think it holds true.

I think the BEST thing you can do in your business is focus on finding customers and product users.  Rather than selling the dream of building a large residual income, lead with the PRODUCTS.

Find people who are passionate about the products who will reorder every single month, whether they ever build a business or NOT!

That is one of the best things you can do as I see it.

Personally, I would rather have 100 happy customers on my team than 100 distributors who are looking to make money fast!  I know that most of the reps will fizzle out, but the customers will stick around.

Finding customers just makes sense to me.  All businesses need customers.

What’s great about finding customers is it is much easier and much smarter to do.

Talk to any 100 people about a MLM Business Opportunity and most of them will head for the hills with their tail tucked between their legs.  Talk to those same folks about a product line that can HELP them solve a problem and you will get a much higher conversion rate.

Just something to think about.

I still think that MLM is a good business model.  Yes, there is a Revolving Door in our industry, but there is a Revolving Door in MOST businesses.  Nearly 9 in 10 businesses fail in every industry.

Most realtors fails.  Most sales people fail.  Most insurance agents fail.  Most diets fail.  Most marriages fail.  Most people die broke.

I could go on and on, but failure is very common in life.  Just because something has a high failure rate doesn’t mean it’s bad.

I spent a short time working as a life insurance agent. If you think that MLM has a Revolving Door, you should have seen this place.  The General Manager would bring in 20 to 50 new agents each month. Within a month or two, only 1-3 of these folks would still be left! Everyone else had quit and went off looking for a JOB.

Yet, no one calls that a scam!

Just food for thought.

What are your thoughts about the MLM Revolving Door Syndrome?  Leave a comment below to let me know what you think.  I look forward to hearing from you.

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14 thoughts on “The MLM Revolving Door Syndrome

  1. Greg Boudonck

    As I read these comments, I don’t think many are getting the primary point Chuck was making. The best way to slow the retention down is to have customers. As these retail customers use the products for some time, and become regular buyers, show them how they can get their products for a reduced or free price by becoming a distributor. These people will normally stick because they are focused on the product they use, not making money. They love the product, so in the name of savings, they will stay signed up just for the reduced price.

    Reply
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  3. Liz

    Something I’ve noticed is that people who don’t succeed at their first MLM often jump ship, as you said, in the first 90 days but then jump right into another MLM using the same marketing strategies and business model and become frustrated when they still don’t see the profit they hoped. Sure, sometimes it’s a bad compensation plan or perhaps the company mistreats distributors but more often its probably lack of training and solid mentors.

    Reply
  4. Diamond Grant

    The major reason I have seen people quit is one you mentioned which is not making money fast enough. Too many people want a get rich quick scheme, and when they aren’t rich in the time table they expected they move onto the next venture. I try to spot these individuals and keep them as far away as possible. There are few things as frustrating as investing time and energy training someone who jumps ship so quickly.

    Reply
    1. chuckholmes Post author

      The same holds true in most businesses. People give up on their blogs WAY to soon. I’ve seen people quit in as little as 90 days, yet it typically takes several YEARS to build a successful blog.

      Reply
      1. S.J.

        That is so true and depending on the market you are in and who your target audience is it can be even more challenging to get a website and blog up and running and turning a profit. There is a lot that goes into but being impatient can be the biggest threat to finding success online.

        Reply
  5. S.J.

    I find it interesting how many jobs and opportunities out there in business, sales, and marketing have a tendency to lead to the revolving door scenario. It is helpful to know ahead of time what to expect and what to plan for- it makes it easier to work through these problems when they arise. Thank you for sharing.

    Reply
  6. Faye

    Interesting post. All of your points about the revolving door mentality (for many) in MLM ring true with me, but the last paragraph really gave me pause. I, too, worked for an insurance company at one point in my life, and the agents did seem to work on a revolving basis with a very short shelf life. Yet, as you say, no one called that a scam: it was just considered par for the course. So what do you think the difference is? Is it just that the insurance agents had a brick-and-mortar office, whereas MLM usually does not?

    Reply
    1. chuckholmes Post author

      The truth is, ALL sales jobs have a high revolving door. Yet, few people ever mention that. Selling is not for everyone. Neither is owning a business of their own. I just don’t like that so many people call our industry a scam, when many other industries operate the same way, yet no one knocks those industries. That’s all.

      Reply
  7. Samira Doggler

    Yes, you are absolutely right that people quickly quit MLM and the reasons you mentioned are also correct. I think the most important part is that people should be empowered with complete training and knowledge about network marketing. They must be able to know how to contact people? How to answer their queries? How to deal with objections? This will help them in carrying out their tasks more effectively and with ease.

    Reply

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