About 20 years ago, when I was just starting to make some money in the business. I attended a seminar put on by an author who had written a book on MLM. In a private conversation, he told me that the products were really irrelevant; it was the compensation plan that drove growth.
He said we could all buy the products each month and throw them in the river. As long as everyone purchased the minimum each month, we’d all make money. Being young and gullible, and figuring he was the expert, I took his advice to heart.
At that time, I was working with a program that allowed you to buy gift certificates in lieu of a monthly product purchase. Since the monthly volume I needed to qualify was $100, I bought a gift certificate for that amount each month.
This was when I still smoked, back when you could do so in public places without getting shot or arrested. So each month, at my biggest opportunity meeting, I would light a cigarette with a gift certificate and let the audience watch it burn up. What a showstopper!
I would explain that I had paid $100 for the gift certificate and tell them how much my check was that month (which was about $10,000). I went on to say that as long as I bought $100 worth of stuff—even if I burned up a gift certificate or bought products and threw them away—I would get a check! I thought this logic was unassailable. It was.
Except for two slight problems.
Number one, it was illegal. As you now know, any deal where people buy simply to qualify for a check is considered a pyramid—illegal in most countries around the world.
And number two is the fact that it completely diminishes the value of products. People view products simply as a means to get a bonus check, so they don’t use them or develop any affinity for them. They miss the emotional connection so critical to long-term success.
It is this emotional connection to your company’s products that motivates people to grow and also keeps them from jumping to the next hot deal that comes along.
But I didn’t know all this back then. So I burned my gift certificates and preached the power of the profit incentive. And, of course, my frontline leaders duplicated me. Hell, even some of the nonsmokers took up the habit so they too could burn certificates at their opportunity meetings!
Everything worked great for about five or six levels down, because these people were all making, or about to make, more than their $100 monthly expense. The problems began on the lower levels, where people were not yet in profit…
The end of the month came and went, but these people never placed an order. When the bonus checks came out, their surprised and frustrated sponsor would call them up, demanding to know why they hadn’t ordered anything.
“Because I don’t have anyone under me yet” was the reply.
Well, of course, the next month those sponsors might not order, because the people under them might not be ordering, because they didn’t have volume under them. Attrition started at the bottom and began to work its way up, level by level. This organization, which had taken me more than a year of hard work to build, looked like it was going to self-destruct in a couple of months.
It took a lot of frantic scrambling to stop the bleeding. I got back to personally using the products and conducted product workshops and other activities to show the value of the products.
The products matter. A lot.
They must be the driving catalyst for the your business. People today are more distracted and hectic than any time in history. They have shorter attention spans and want instant gratification. They have a lot of things competing for both their time and money.
The best way to keep them focused is when they have a tangible product experience in a way that enhances their life. This creates rock-solid belief, which fosters enthusiasm, which build loyalty, which then builds volume.
An interesting side note…
I came to learn that the “expert” on MLM, by whom I had been influenced, was actually just a parasite that preys on people in the business. He used his books and seminars to raid people from other organizations. He was actually in 20 or 30 companies at a time. He would roll all his people into a new company, taking himself to the top of the pay plan within a few months.
Meanwhile, all the other distributors in this new company would be wondering how he had accomplished this growth so fast. So they’d buy his books and tapes and go to his seminars, hoping to learn his secret. They would follow the methods taught in the materials, only to find that they didn’t work. They were theories. The trainer himself never actually used these methods to build a group. He built his groups only by raiding the organizations of others.
About the time the people in this new company discovered that his methods didn’t work, our trainer was ready to move on to the next company. So off he would go to another new deal, taking some of the people from the old one with him. And bringing his larger group to this new deal would shoot him up to the top of the pay plan once again…and he would duplicate the entire process all over again.
Believe it or not, there are actually so many start-up companies always popping up and closing down that he’s done this for over 20 years. He’s made millions selling training materials and seminars to unsuspecting souls.
That works for him because he’s “mining the miners.’ It won’t work for you. To build a long-term business, make sure it’s grounded in product use. Build that culture and you’ll build a strong business.
For more on what kind of products work best in Network Marketing, read the chapter on how to select the right company in my book, How to Build a Multi-Level Money Machine.
I’m doing a Science of Duplication workshop this weekend in Sofia, Bulgaria. Looking forward to meeting some of you there. Everyone else, have a great week!