Marketing an MLM (multi-level marketing) can be particularly hard – harder than most businesses. It comes down to a key mistake that most people in MLMs make, and we’ve seen it over and over again. The good news is that all it takes to fix is a small change in focus.
Before we jump into the meat and potatoes of what to fix and how to fix it, let’s quickly explain what an MLM program actually is, because you can’t fix something that you don’t understand (if you already know this stuff like the back of your hand, and can’t stand to read another explanation, skip down a few paragraphs).
MLMs are companies (like Amway) that get their customers to do the selling for them. Let’s say that I’m selling a product for an MLM. I can sell you the product, but I can also sell you the opportunity – I can get you so excited about the product that you want to go out and sell it too, and if I can get you to do that, I’ll earn commissions on everything that you sell. Anyone that I recruit is part of my “down-line”, and I get rewarded for the successes of my down-line.
This is a kind of circular; you get people excited about the opportunity by telling them that they can, in turn, recruit people into their own down-lines, and make money while they sleep and other people are out selling the product.
So far, this might just warrant a raised eyebrow, but most MLMs will charge some sort of “sign-up fee” or “initial inventory fee”, or something that basically means you’re paying them for the “opportunity” to sell their product. Starting to sound fishy? Starting to sound like a pyramid scheme, even? Usually, that’s more or less what it is.
There’s an easy rule of thumb for telling between a legitimate MLM and a pyramid scheme, and that is by asking where most of the company’s money comes from. Do they make most of their money by selling products? In that case, it’s a legitimate MLM, and more power to them. If they make most of their money by selling the opportunity, though, then it’s a pyramid scheme. No power to them!
The Marketing Mistake
The thing is that even with legitimate MLMs, people tend to get very excited about selling the opportunity – they reason that if they can get just three friends to sell for them, and then each of those friends gets just three friends, and then each of those friends gets just three friends, and so on… just three levels down, they’ve got a hypothetical sales-force of thirty-nine people out there earning them commissions.
Not a bad dream, right?
There are two problems with this, though, and they both come down to the basic mistake of trying to sell the opportunity before you do a good job of selling the product.
The first problem is that you can’t sell the opportunity if you can’t sell the product. Much as we’d like to believe that we will find and recruit some sales superstars to sell the product for us, the truth is that sales superstars can sell anything, and they have plenty of offers to choose from. The only way you’re going to get them excited is by showing them your own sales record, and demonstrating with cold hard facts that there is money to be made here.
The second problem is that you generally won’t be able to recruit a down-line that is better at selling than you are. If you can figure out how to be successful selling the product, then you’ll be able to train your down-line to do the same, and there’s a lot of money to be made by all. If you can’t sell the product yourself, though, then odds are that neither will they.
The Moral of the Story
Think of selling the product as a baseline income, with selling the opportunity being a multiplier. Let’s say that it can even multiply that baseline by a pretty big number. No matter how big that multiplier is, though, if you’re multiplying it by zero, you still get zero.
The lesson to be learned from this mistake is that if you want to be successful with an MLM, you’ve got to start by selling the product, and only move on to selling the opportunity once you’re doing well with that product.
So how can you sell the product?
Same way you sell everything else. It’s a product, like any other, so go back to the marketing basics, and study your chain of conversion. Who is the target market? What is the real value being offered to them? Are your 4Ps of marketing all on target?
If you answer these questions, develop a solid marketing strategy, and then execute it to deliver maximum value to your prospective customers, then you’ll make money selling the product. And if you can make money selling the product, you can make even more money selling the opportunity.
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