Why 95% of Network Marketers Fail and Why this is Good News for You

Serena Tan

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Network marketers. Direct selling. MLM. What comes to mind when you hear these phrases? Aggressive, pushy salespeople? A family member or friend you want to avoid because he can't stop talking about his new business and all the wonderful products his family loves?

The network marketing industry has given thousands of individuals a chance to experience what it is like to work for themselves without the high costs traditionally associated with regular brick-and-mortar businesses.

At the same time, it is not without its detractors. Top of the list is an oft-quoted statistic that 95% of network marketers fail and only 5% succeed. Type in “95% failure rate network marketers" in Google and you'll see what I mean. This statistic is often attributed to the US Small Business Administration. However, when I last checked the SBA website's FAQs, what it said was: “Two-thirds of new employer establishments survive at least two years, and 44 percent survive at least four years, according to a recent study. These results were similar for different industries. "

So is this 95% figure a myth to convince you that the odds are stacked against the network marketing newbie from the start?

And if there is some basis for the claim that an overwhelming majority fail at network marketing, what are the possible causes? More importantly, what does this mean for you if you are considering an opportunity with a network marketing company?

Judging from the testimonials of those who have been disillusioned by the industry, there are several possible reasons why an individual may fail:

  1. He's with the wrong company. He's not wild about the products. When people ask him what's great about the products, he can't quite explain it. The compensation plan is not working for him. The monthly quota is not sustainable in his present financial situation and is draining his resources. He finds himself saddled with products he cannot finish consuming or cannot sell. He is not getting the upline support he needs.
  2. The company's Heavy Hitters practise the old-school philosophy of Recruit-Recruit-Recruit, i. e. marketing by numbers. And he just happens to hate selling and prospecting and cold calling. His network is limited. Soon he runs out of leads. No leads means no customers, and no customers means no downlines.
  3. It's all about the money, and only about the money. He thinks network marketing is his quick ticket to a life of leisure in a beach house in the Caribbean, with minimal effort on his part.
  4. He doesn't treat his network marketing business as a real business. It's like a part-time hobby which he fits in around his day job. But he expects real results, and preferably a pay check next month.
  5. He has no long-term vision of what he wants to achieve with his business. No mission statement. No 5- or 10-year plan. No SMART goals.
  6. He lacks persistence (gives up before he sees results).
  7. He is not willing to put in consistent effort over a period of time.

Is there a better way to do business so that you can make it to the top and actually have fun while getting there?

Yes, but only if you change your attitude and get serious about your network marketing business.

First, ask yourself if this is the right vehicle for you. Not everyone enjoys talking to people they don't know. Some of us are natural salespersons; some are not. You need to know yourself and what your strengths and preferences are. You can't change your personality to fit your business because that's the core of who you are; you just have to find a way to work with it.

Now, if you are sure network marketing is for you, or you are at least open to learning how to do it well, the next step is to decide which company to align yourself with. With so many network marketing companies out there, how do you know which one is the right fit for you? This calls for due diligence and plenty of legwork.

Ask yourself these questions before signing up:

  1. Are you in broad agreement with the company's philosophy and vision? Or is this something you couldn't care about either way?
  2. Are the products what you would use for yourself and your family? Are they of high quality and consumable? How expensive are they compared to store-bought equivalents? Are they safe for you and for the environment? What are the ingredients and how concentrated and readily absorbed are they? Do they contain harmful chemicals? How do they rate against their competitors?
  3. Is the company well run? What is its track record in the industry like? Is it a new player or well established? How is its financial health? Have there been lawsuits against the company? Why? What were the outcomes?
  4. Testimonials from users of its products. Are they satisfied? Would they buy the products again? What are they telling others about the company and the products? Are there more complaints or compliments? What about testimonials from experienced as well as novice distributors. How long have they been in the business? Are they making money? Are they getting the support they need to succeed or are they complaining about a lack of training and resources?
  5. Is the compensation plan something you can understand and work? Whether it's a Stairstep Breakaway or a Uni or a Binary or a Forced Matrix, you need to know exactly what you are required to do to get the most out of it. If you can't understand it, ask questions until you do.
  6. How easily can you get access to information about the company? How is the customer service? How are the distributors’ and support staff's product knowledge? Do you feel confident that you will be able to get the support you need if you join? If you have questions about the business, how responsive is your sponsor or the company HQ? What do other distributors say about this?

One thing you absolutely must get right: network marketing is not a way to get rich quick. Don't believe anyone who tells you otherwise. Network marketing is a business like any other, and needs to be treated seriously. This requires a business plan, goal setting, being accountable for results - and lots of plain hard work. The same principles that operate in a traditional business environment apply equally to a network marketing business. Those who succeed in network marketing are those who are committed to doing whatever it takes to get there.

So how can you beat the odds and succeed at network marketing? By doing what most network marketing experts don't know about and are not practising. And here's the good news – the best practices listed here are in fact your ticket to building your own special niche (or Brand of One, as Ken Evoy puts it) and creating for yourself a reputation for being up there with the best!

Best Practices for Serious Network Marketers

Network marketing is a people business, not a sales business. It is about building relationships and winning trust, not about recruiting numbers to boost your downline. It's not even about the products. In the words of network marketing expert, Michael Dlouhy, “People join people. They don't join a company. " Michael is of the view that least 85% of the population HATES being sold to. Now if he is right, then the traditional heavy hitting methods won't work; they will only frighten off and alienate these people, leaving you with just 15% to work with. Why would you start your business with the statistics against you?

Do it the better way: put People First and Profits Second. Be generous with your time and information. Don't worry about how and if it will lead to more sales or more recruits. It will take longer to see results, but your efforts will pay off. When people come to trust you and admire you so much that they want to join your company because of you, you will have succeeded. Think about this. You will have people coming to you without you having to chase or push anyone. These people are keen to find out more about your business because you have helped them in the past. They are attracted to you and the way you have been building a relationship with them.

Now think about it the other way. If your security is in numbers and your focus is only on products or opportunity, where would you stand when your company collapses or another company comes up with a superior product? On the other hand, if people follow you, then if things don't work out with your company, you can always move on to a new one and take your team with you. Now that is true security!

Raise your standards. Seek excellence, not short term financial gain. Want to build a business that lasts? Then invest in personal excellence. Do more. Give more. Be more. Work harder. Work smarter. Over deliver. And do all this with integrity and the interests of others at heart. Make it a point to learn something new every day. Read books, listen to audio CDs, attend tele-seminars by those who have succeeded. Learn about success, self-improvement, positive thinking, networking, sales and marketing, developing people, building relationships. Find a mentor. Be a mentor to someone else. Keep paying it forward. Keep a journal so you can look back on your journey and marvel at all you've achieved. Out of that consistent effort will flow new ways of thinking and seeing and relating, ways that will add to your personal and business success and keep you fresh and excited and positive about your life.

They say the battle is won or lost in the mind. Shape your mind so that your attitudes and actions will be consistent with success. Then, teach your downlines how they can do the same. In time to come, you will find that your downlines will start writing their own success stories by modeling themselves on you and spreading the word about you. That is the true spirit of duplication, having a system that works just as well with one person as with a thousand. That is the true power of network marketing.

Serena Tan is a writer, network marketer and WAHM living in Melbourne, Australia. She loves writing on health and wellness, home based business and personal development. To find out how to overcome the #1 hurdle to building a successful network marketing business, go to http://www.SerenaTan.ws .


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