Today, I want to talk to you about the MLM Revolving Door Syndrome. This is an issue that plagues our industry. Very few leaders ever talk about it with their team members because it makes people uncomfortable. I hope to fix that.
Talk to any successful person in the network marketing industry and they have a revolving door in their business. It doesn’t matter what company they work with. If 10 people join their business this month, 6 to 8 of those people 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. It’s true, this is a business of attrition.
Why People Quit MLM
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
- Employee mindset
- Inability to focus
- Poor training
- Lack of discipline
- No financial “skin” in the game
- Uncoachable
- Laziness
While the high attrition rate might scare some folks off, it’s important to realize that MOST people quit everything they do. Most people give up on their marriages, their diets, their dreams, etc. Most people who buy a gym membership never even GO to the gym once. We are a society of quitters.
How to Minimize the MLM Revolving Door Syndrome
In most cases, there isn’t much you can do to keep people from quitting your business. If someone is determined to quit, they will.
My former mentor once told me this:
If you’re looking for a reason to quit, you will find one. If you’re looking for a reason to stay, you will find one. You find what you are looking for. Choose wisely.
That being said, there are a FEW things you can do to minimize the MLM Revolving Door Syndrome in your team.
You can build depth, provide weekly training calls, sponsor quality people, and work closely with each of your team members. You can help your team members 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 will help reduce some attrition.
Build Depth
By taprooting your new rep, and starting to build a team under them, you now give them something to lose. Since fear of loss is the greatest motivator, this is quite perhaps the smartest thing you can do to minimize or stop the MLM Revolving Door Syndrome.
Your # 1 goal when sponsoring a new rep is to help them get someone signed up. Once that person joins, you go and work with them directly and help them do the same thing. You repeat this process over and over in depth UNTIL you find a quality person who is hungry, coachable and willing to work. The deeper you drive each leg, the better retention you will have in your business.
Get Started Right
It’s vital that you help your new rep get started right. It’s 100x better to start right than start over. This means you put them through some type of standardized “getting started training.” You want them to launch their business rather than start their business.
Help them make their name’s list. Schedule a launch meeting or private business reception with them and teach them how to invite their prospects.
Quick Success
Ideally, you want to help your new rep, or any other team member, make a sale or sponsor someone right out the gate. Not only does this build up their belief, but it also helps them earn a quick check. It’s true, you only have about 7-10 days for your new rep to lose their excitement and mentally check out. The quicker they experience some type of “win” in the business, the better.
Get Folks on Auto-Ship
By getting your folks signed up on auto-ship, they will start using your company’s products. Assuming your company’s products are good, and priced fairly, many people will keep ordering the products, even if they stop doing the business.
Chances are there that an intelligent and diligent network marketer can triumph even with the worst program and with bad compensation plans. But an unskilled and scatterbrain marketer can’t gain success in his endeavor even if he has the best program in his sack! ~ StreetDirectory.com
The Most Important Thing
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 network marketing 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 company’s 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. In fact, this is the future of network marketing!
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 quickly, but the customers will stick around much longer (typically). 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, because they are (1) not entrepreneurial or (2) they have preconceived notions about our industry. However, if you talk to those same folks about a product line or service that can HELP them solve a problem they are having, you will get a much higher conversion rate. Just something to think about.
Is MLM Still a Good Business Model?
Despite the high attrition, I still believe that network marketing is a great business model. Yes, there is the MLM Revolving Door Syndrome, but there is a revolving door in MOST businesses. According to many online statistics, nearly 9 out of 10 businesses fail in every industry.
Most realtors fails. Most salespeople fail. Most insurance agents fail. Most diets fail. Most marriages fail. Most mom and pop businesses fail. Most businesses have high employee turnover. Most people die broke.
Drive through your own home town and look at all the vacant buildings and closed down businesses. How many businesses that are there today were there five years ago? Chances are, most of the businesses you see today will also be gone in the next five years.
I could go on and on here, but failure is very common in life. Just because something has a high failure rate doesn’t mean it’s bad.
My Experience Selling Life Insurance
I spent a short time working as a life insurance agent. If you think that network marketing 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 one or two of these folks would still be left! Everyone else had quit and went off looking for a JOB. Yet, no one calls the life insurance industry a scam!
One Last Thing
Here’s something that can save you a lot of time and frustration. Expect people to quit. Hope that everyone will stay, and build it big, but expect that everyone you sponsor will do nothing and quit. That way you don’t get disappointed.
Also, don’t believe ANYTHING anyone on your team tells you they are going to do with their business. Instead, watch the feet, not the lips. Watch what people do. After all, talk is cheap and actions speak much louder than words.
The beauty of our industry is you can still build a big income, EVEN IF most people quit. Your job is to work the numbers, work with the willing, and find a few key people who “get it”. You only need a few who “get it” to build a large six figure income.
That is the key to success in our great industry. Now you know!
Final Thoughts
What are your thoughts about the MLM Revolving Door Syndrome? Do you agree or disagree with what I wrote? What has your experience been like in your own network marketing business? Leave a comment below to let me know what you think. I look forward to hearing from you.
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.
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.
When people on your team have customers, they will make money and then have no reason to quit.
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.
Once you take the time to develop your skills you can succeed in any company.
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.
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.
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.
Pretty much every sales job and sales profession I know of has a revolving door. Sales is not easy and it’s not for everyone.
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.
Most sales jobs have a revolving door. Just ask any sales manager.
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?
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.
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.
Yes, training new reps is vitally important. However, I would argue that most reps in our industry do get enough training. What they really lack is knowing their why and the motivation to do what they know they should be doing, even when they don’t feel like doing it.
People are quick to blame their failure on anyone and everyone but themselves.