Why Network Marketing

In April of 1979, I viewed my first network marketing presentation and fell in love with the concept. At that time, I was a corporate manager for a Fortune 100 company. I had graduated from college with a business degree and set out to climb the corporate ladder to success. However, those circles drawn on a white board opened my eyes to the future of business.

Thirty two years later, I am convinced that network marketing is the wave of the future in business. It is a powerful marketing model that is sweeping through the world and will have a greater impact than franchising. Bold statements? The balance of this article will provide the proof.

Fortune magazine called direct selling (of which network marketing is the largest segment) “the best kept secret in the business world.” It has experienced 91% growth in the last 10 years with annual sales in excess of $40 billion in the U.S. and $150 billion worldwide. Financial experts say that it’s a “recession proof” industry. Billionaire Warren Buffet, after purchasing a network marketing company, called it the best investment he’d ever made. Tom Peters, author of In Search of Excellence, calls it the first truly revolutionary shift in marketing in the last 50 years. Rich Dad, Poor Dad author, Robert Kiyosaki was so impressed with the industry, he called it the Business of the 21st Century and wrote a book by that title.

Even billionaires and Fortune 500 companies are jumping on board the network marketing bandwagon. Richard Branson, founder of Virgin Records, launched his own network marketing company in the U.K. Warren Buffett has purchased two network marketing companies. Donald Trump has been associated with a couple of network marketing businesses. Time Warner, Lillian Vernon, City Group, Hallmark Cards, Nestle, Jockey, Readers Digest, and Remington have either purchased or launched their own entries into this high growth industry.

Why the interest in network marketing? The main reason is that it fits the current marketing trends. If you haven’t figured it out by now, the baby boomers (those born between 1946 and 1964) are in control. Seventy six million strong in the U.S. and over a billion worldwide, the boomers have dictated what is hot, from baby food and diapers to fast food to minivans and SUVs. Now the boomers are looking for products that will help them look and feel younger and ways to secure their financial future and enjoy more time freedom. Network marketing offers the answers.

Tired of the corporate rat race, boomers are starting home businesses in record numbers. CNN reported that a new home based business is started in the United States every eleven seconds. The home business boom is the next big trend and network marketing is one of the hottest home businesses available. It offers low start-up investment and monthly overhead. Entrepreneurs can start part-time, while still employed, and build the business to replace their job income. Age, gender, and race aren’t barriers in network marketing. In fact, well over half of the success stories are women.

The biggest reasons that the boomers are flocking to network marketing are time leverage, residual income, and tax benefits. Network marketing is one of the few businesses that does not require employees and yet enables the owner to leverage his or her time by building a network of independent business people. This network, which purchases and sells products or services, generates a residual income for the owner. Unlike the income earned at a job, which stops when the work stops, residual income continues on long after the work is completed. As exciting as leverage and residual income are, boomers love the tax benefits of network marketing. Tax expert Sanford Botkin says that a network marketing home business can result in tax savings of $3,000 to $9,000 per year.

The final reason why so many people of all ages are interested in network marketing is the internet. Success requires a business owner to build a large network of people who buy and sell products/services and recruit others who will do the same. The internet now enables network marketers to build national and international businesses from the comfort of their home. No more early morning alarms and high stress commutes. All the work can be done from a bedroom with a computer and telephone.

Network marketing is the first true equal opportunity, as there are success stories from every age and ethnic group, gender, personality type, education level, and walk of life. However, this is not a get rich quick scheme where supposedly everyone will succeed. This is a business that requires financial and time commitment and the willingness to work hard until success arrives. The great part is that network marketing, similar to franchising, is a turn-key business. Others have forged the trail and all a person has to do is use the proven systems and follow the path. Don’t expect to make millions the first year or the second, but do expect to make enough to give you time and financial freedom.

The first key to success is to find a company, out of the over 3,000 available, that operates with high integrity and offers a product/service that brings out passion and excitement. The second key is to find the right compensation plan. There are six basic types – Stairstep, Matrix, Unilevel, Binary, Hybrid, and 2 Up. Each has positives and negatives, so study the plans and find the one that fits best. The third key is to study those who have already been successful and duplicate what they have done. Last, never, never, never, never, quit. The success you seek may be just around the next corner.

Network marketing is over 60 years old, so it’s not a new concept. However, it is a concept whose time has come. In the movie The Graduate, a young Dustin Hoffman was told that the future was in plastics. I’m here to tell you that the future is in network marketing and that future is now.

Direct Selling News: Top 100 Direct Sales Companies

Direct Selling News
6/20/11

When we published the DSN Global 100 ranking last year, it was the first time in the history of the industry that a comprehensive list of the top 100 revenue-generating direct selling companies was researched and presented.

When we committed to the project, we committed to do the research necessary to produce a ranking that would reflect the advantages of the direct selling industry. As the trade journal for the direct selling and network marketing executive, we know you hold us to high standards. So with that in mind, we delved into our research, compiling data from financial sources, professional researchers, personal interviews and corporate websites.

Our research is really not an opt-in/opt-out opportunity. Information on publicly held companies serves to form the backbone of credibility to a list that contains so many private companies. When privately held companies submit their information, we enhance the value of strategic objectives to showcase a much more transparent industry; when they do not, we extrapolate the data to the best of our ability and publish it with the appropriate journalistic qualifiers.

For this year’s ranking, we contacted every company that appeared on our 2009 list. We were excited to learn that last year’s offering had made an impact, and more companies willingly participated this time around. In fact, only a few companies declined to share financial data. We also researched dozens of companies that did not appear on last year’s list—ones that had come onto our radar screen over the past 12 months. That is why we feel confident that the 2010 DSN Global 100 provides a comprehensive and accurate representation of the industry.

However, we do acknowledge that challenges persist in compiling such a list, and we remain steadfast in our commitment to continue expanding our research so that each year provides even greater data and greater insight. For us—and ultimately, for you—there is a far greater reason that we do this than simply ranking one company above another.

To read the rest of the article, go to http://www.directsellingnews.com/index.php/site/entries_archive_display/the_top_direct_selling_companies_in_the_world

Isn't This One of Those Pyramid Deals?

Here's another of the most common objections you will hear in network marketing. The first step in answering this one is to clarify what they mean by asking: what do you mean by a pyramid deal?

Their answer will dictate the next step:

If the indicate that they think the business is an illegal pyramid scheme, then you can lead them to you state attorney generals site for their definition of an illegal pyramid and then compare that to your business. The main differences are that a legal network marketing business has a product that people would buy if they weren't in the business. Also, all commissions and bonuses should be based on sales of those products.

If they indicate that it's like Amway or some other NM company, then ask them what they know about that company.

If they answer that it's one of those deals where the people at the top make all the money, you could respond by saying, oh you mean our government or corporate America. This will flush out their experiences or what they've heard.

Once you've answered their objection, confirm that they are satisfied and then share with them the benefits of your business - what's in it for them.

I Don't Have Enough Money

This is another common objection in the network marketing industry and for most network marketers, it means death to their business. However, just like we saw in the last post on not enough time, the not enough money can be easily overcome. What I've found is that if people want or need something bad enough, they will find the money. If the water heater went out, they wouldn't say, I don't have enough month and take cold showers. NO, they would borrow the money or sell some stuff to get the money. It's the same with your business, if you handle it correctly.

The first step is to avoid this objection by building value and you do this by asking questions to uncover pain and passion areas in their lives. Ask questions about their family, occupation, recreation, and money to find those pain and passion areas and then deliver your business as a solution. If you do a good job with this, you will not hear the no money objection very often.

If you do encounter this objection, I first like to qualify their comment by asking as questions, "Are you telling me that you absolutely don't have the money, can't borrow it, can't sell some things to get it, or are you saying that you just haven't seen enough value in this to pay the money? If they answer with the former, then you work to help them find the money, ask them what they would do if the hot water tank went out today or if their child needed emergency surgery, what they would do. If they answer with the second one, you have to go back to the pain and passion areas and find out what those are worth to them and build up that value.

So, there you go. Avoid the objection by asking questions and when you get the objection, help them see the value your business has in their life and you will see a higher percentage of the "no money" people join your business.

I Don't Have Enough Time

This is one of the most commonly heard objections to building a network marketing business and in the minds of those who are saying it, it's the truth. However, the reality is that if they don't do something different, they will just get busier and busier and behinder and behinder.

For the first 10 to 12 years I was in network marketing, I treated it more like a hobby than a business. In 1995 I decided to get serious and make some money. At that time I was working 60 hours a week, my wife was working 60 hours a week, we were both traveling quite a bit, and we had 5 children at home. I've not encountered too many people busier than we were and we could have legitimately used the not enough time excuse, but we didn't. Instead, we devoted between 10 and 15 hours a week to our business and in 10 months we had replaced my wife's income and she quit her job. In 22 months we had replaced my income and I was able to quit my job and haven't had one since!

I just read that the average American watches five hours of television a day. That's 35 hours and week! And they can't find any time to work a part-time business that could result in total freedom???

Here is how I handle the time objection. When they say they don't have enough time, I say: "You don't have enough time? Tell me about that." I listen and ask questions about their work, such as "Do you commute to work? How long does that take?" "Do you take a lunch break? How long is that?" "Do you watch TV in the evenings or on weekends? How long?" Typically I can find 10 to 15 hours in their schedule. Then I just ask them if they are serious about having a life of freedom - financial and time freedom - a life they can truly enjoy? If they say yes, then we get to work building into their schedule time for their business and then I hold them accountable to that schedule on a weekly basis.

No time is generally an excuse. If we care about people, we can't let them sabotage their life with this excuse, but ultimately they have to make that decision.

Building a Team

I've been in the network marketing industry since 1979 and during the first 10 to 12 years I thought the key to building a big business was to sponsor a lot of people. I discovered that by doing that you can make some short term money, but without solid duplication, you can't create true residual income. Solid duplication requires building a team with leaders and followers.

Leaders are those who have a big "why" for their business and are willing to do what is necessary to build their business and achieve their why. They buy all the products, attend all the events, sponsor a good number of people, and are very coachable.

Followers are those who like the products, but haven't quit figured out their why for building a business, so they will be loyal product users, attend most of the events, and will even sponsor a few people hear and there.

Your business requires both leaders and followers. About 5% of those you sponsor will end up being your leaders and the other 95% will become followers or will quit. However, you can build a very large business and a significant full time income with the 5% and a percentage of the 95%.

So, the key is to find those people who are already natural leaders and guide them along and dig into your network to find those leaders in the rough who you can mold and polish into leaders. In order to do that, you must become a leader. You must become the person people want to follow. Even if you haven't achieved much success with your company, you can still be a leader. You just have to be a few steps ahead of the pack and say, "come on, follow me" and then take them in the right direction, leading by example. If you are prospecting and sponsoring, so will they. If you are working with your leaders, so will they. If you are jumping up the ranks, so will they. You lead and the leaders will follow your lead.

So, do you want to build a solid residual income? Build a team - leaders and followers.

Principles for MLM Success

Network marketing is amazing. In my over thirty-five years of working, it’s the only form of business I’ve found that offers a level playing field. In other words, anyone can become successful in network marketing. The great part is that others have already blazed the trail, so it’s just a matter of looking at what they did and doing the same thing. Over the last ten years, I’ve had the distinct honor to interview many top income earners and in this article I will share some of their principles for success.

1. Coachable – MLM is a business of duplication. Those who have already been successful will share their secrets to success and all you need to do is listen and do what they tell you to do. Unfortunately, I was not very coachable in the beginning. I was successful in traditional business and figured I could do the same things and be successful in network marketing. Boy, was I wrong and because I didn’t listen to my upline leaders, I didn’t make any money. They’ve been there, done that, got the t-shirt, and the pay-check to prove it, so be coachable and duplicate their success.

2. Dreams, Goals, and Objectives – Studies have shown that very few people have written dreams and goals, yet those who do, achieve high levels of success. Identify your dreams first – if time and money were not inhibitors, what would your life look like? Describe your dream house in great detail? Likewise, your dream car, vacations, wardrobe, lifestyle, and so on.

From those dreams, goals can be developed. A dream is the big picture and goals are the steps that will get you to the dreams. For example, let’s say your dream car is a Mercedes SL65 with a cost of $225,000 and a monthly payment of around $3,800. What are the steps necessary to achieve that dream? An increase in your income might be necessary – so the goal would be to increase your monthly income to let’s say $10,000.

Next, you break that goal down into bite-size objectives (the things necessary to increase your monthly income to $10,000). Each day you should review your dreams, goals, and objectives in order to determine your daily activities.

3. Work – Network marketing has probably produced more millionaires than any other industry and although each of those people built their businesses with different companies and using different methods, they all did one thing – WORK. MLM is not a get rich quick scheme. It’s a get rich through hard work business. One of the main differences I see in those who fail and those who succeed is the level of work. Most of those who fail treated their MLM business like a hobby – working whenever they had some spare time. However, the top income earners work their business every day. Let’s say that after a thorough evaluation of your schedule, that you can only devote ten hours a week to your business. Take a daily planner and block out those available time slots and commit to working your business. Now, work is not filing, checking e-mail, or surfing the web. Work in MLM is prospecting, presenting, follow-up, registering new associates, training, and support. In the beginning, you should spend 90% of your time in prospecting, presenting, follow-up, and signing up new people. As your network builds, you can devote more time to training and support, but never, never, never stop prospecting or your business will die.

4. Consistently Persistent – Most network marketers give up to early. They expect to make $10,000 their first month and when they don’t, they quit. Just like any business, it takes time to build an MLM business. You are going to have to contact a lot of people, give many presentations, and endure a great deal of rejection. However, it is the person who is consistently persistent, that will succeed. If you are duplicating a successful system, then the only thing separating you from success is time. When things are looking dark, keep going. Make one more call. Talk with one more person. Follow-up one more time. If you are with the right company, you should never give up.

5. Make a Million Friends – The advice that made the biggest impact on my success in network marketing was to go out with the idea of making a million friends, instead of a million dollars. You can only be successful in network marketing if you help others become successful. So, every day go out to find some new friends, who you can help become successful in your business. Forget about your wants and needs and serve. This is called servant leadership – you lead by serving those you lead. The more friends you make and serve, the greater your success in network marketing.

These are just a few of the principles of success. I’m sure that your sponsor and upline leaders have their own list, so make sure you ask them for their principles for success. Now, the final key is that it’s one thing to have this knowledge and it’s a whole different thing to actually do what you’ve learned. Be a doer and watch your business and income skyrocket.

Power Prospecting

If you talk with the top income earners in network marketing, they will all say that prospecting is the key to success. It’s just like prospecting for diamonds, the more successful you are, the higher your income. Diamonds are very valuable and you don’t have to find very many of them to become wealthy. In network marketing, it’s the same – all you have to do is find a few diamonds. So, how do you find them? That’s what we’re going to discuss in this article.

First, let’s examine what a network marketing diamond looks like. Quite often, they will surprise you. My friend, Collette was a single mom with five children. She had no education beyond high school, was working as a part-time secretary, and had a mountain of debt. On the outside, Collette didn’t seem like a diamond, but she had a big reason to succeed. So, the first quality of a diamond is a big purpose or “why”. If the “why” is big enough, everything else will fall into place. Today, Collette is the top income earner in the network marketing company she represents. Beyond the big “why”, diamonds are also open to coaching, they schedule daily time for their business, they’re positive and upbeat, and they feel blessed and are grateful to have found the right business.

Now, let’s discuss how you can find those diamonds. As in the epic story, Acres of Diamonds, you may have diamonds right in your back yard. They could be your parents, children, other relatives, friends, co-workers, pastor, accountant, attorney, hair stylist, and so on. These are the people who make up your warm market (people you know and who know you). Typically, when you join a network marketing company, you are instructed to make a list of everyone you know and begin contacting them about your business. Unfortunately, this usually turns out to be disastrous, as the new networker is not prepared to handle the questions and objections. However, the warm market is a good place to find diamonds, so here is a time-proven, rejection-proof method for prospecting in your warm market.

Instead of calling the people you know and telling them all about your company, spend the time finding out about their life. Use F.O.R.M. – that’s Family, Occupation, Recreation, and Money. In your conversation, ask them questions about time with the family, how their job or business is going, what vacations they have planned, and how they are preparing for their financial future. As you ask the questions, listen for areas that are causing stress – working too many hours, not enough time with the family, possible lay-off, no time or money for vacations, no savings or extra money for investments, etc. Make notes of those areas and when you have two or three stress areas, then it’s time to present the concept of your business, with a question like: “You have several areas that seem to be causing stress (mention each one briefly) and I’m wondering if you would be open to a possible solution?” If the person responds favorably, then present information about your business and how it will be a solution to their areas of stress.

Beyond your warm market, there is a whole world full of diamonds. All you have to do is sift through the dirt to find them. Even better, would be if they found you. This is called attraction marketing. You set yourself up as an authority and high quality prospects come to you. One of the best training programs on attraction marketing is called Magnetic Sponsoring by Mike Dillard. It will teach you how set yourself up to attract quality prospects. Visit http://RWN.magneticsponsoringonline.com to order Mike’s book and participate in his program.

Another great way to find diamonds is through purchased leads. There are a number of companies that do the advertising for you and some even do the prequalification. You are working with people who are already interested in operating a home business, so all you have to do is present your company. Most of the lead companies provide you with scripts and some even offer phone training. The company I have used for many years is Cutting Edge Media, http://www.cuttingedgemedia.com.

A number of top network marketers built their large networks through advertising. They place small classified ads in the newspaper, business magazines, and on the internet. The add shares a few of the benefits of a network marketing business – fire your boss, time and financial freedom, travel, great tax benefits – and then directs the respondent to either call and listen to a recorded message or visit a web site. The message and site will continue to create curiosity, so that the prospect will move on to the next step – a phone call with you.

There are many, many methods for prospecting. Take the time to talk with top income earners in your company about how they prospect. Read books, listen to tapes/CDs, attend teleconferences, and web conferences. Become a sponge for information about prospecting. Decide which methods are going to fit you and your life best and put them to work every day. Work consistently and persistently and soon, you will have a network full of diamonds.

How to Choose the Right Network Marketing Company

When I was first introduced to network marketing in 1979 there were far fewer companies than there are today.  Back then, people didn’t go searching for the right network marketing business, but today it’s quite common.  In fact, I believe that in order to achieve a high level of success in network marketing, you must be with the right company.  Since there are well over 3,000 companies and more popping up every week, the task of finding the right one is often daunting.

Back in the seventies and eighties, it was difficult to research the network marketing industry, but today, primarily because of the internet, it’s quite easy to gather the information that you need in order to make an educated decision.  In the past most people got into network marketing because a friend, family member, or co-worker introduced the company.  Unfortunately, in most cases, this was not the right company and so it resulted in failure or at best moderate success.  Today, you are not forced to go with whatever company is introduced.  Now, you can do your own research and find the company that is going to be best for you.

Choosing the right company doesn’t guarantee your success, however it does increase your odds.  Ultimately your success in network marketing is determined by what you do.  Network marketing is all about building a network of people all buying/using products/services.  Your job is quite simple: provide information about your business to people, answer questions and objections, follow-up, sponsor, train, and support.  Those who have reached the highest levels of success are those who have done more than those who have failed.

Working in the right company will increase your excitement and enthusiasm, which will make all of the necessary tasks much easier and more enjoyable.  Having chosen the right company will increase the odds that the company will be around for many years to come – providing you and your family with financial security.

So, how do you choose the right company? Here are the key factors to consider:

1.      Company – Carefully research the company. How long have they been in business as a network marketing company? If they are a new company (under 2 years old) then carefully examine the financial backing and experience of the management team. They should have a solid mix of people who have been involved in managing successful traditional and/or network marketing companies. It's also best if the management team includes people who have been successful distributors. Research the internet to see if the company has any lawsuits or large numbers of people complaining. A solid company is the foundation for your network marketing success. If the company is solid, you can move on to number two.

2.      Product/Service – First, is this a product or service you can get passionate about? If not, then you might want to find another company. Second, is this a product or service that is in high demand and will be for many years to come? Third, is this a consumable product or service, where people must re-order every month? Fourth, is the product or service unique in some way?

3.      Compensation Plan – Is the plan easy to understand and explain? Does it reward the new person who sponsors a couple people or do you have to sponsor hundreds to make a decent income? Check to see if there are individual and group volume or purchase requirements, so you can weigh that monthly investment into your decision. Find the average amount of time it takes to reach that level. Find out if the commissions are paid monthly, weekly, or daily. Weekly is actually best, as it puts less strain on the company and yet provides quick and consistent pay. The plan should enable a person who has never been involved in network marketing to recoup their initial investment and cover their monthly investment within the first 3 or 4 months. It should also be lucrative enough to attract the big hitters and should enable people to develop a long-term residual income that they will receive whether they work in the business or not.

4.      Marketing – Does the company offer full-color marketing pieces, DVD presentations, and customizable associate web sites? Is there training available that teaches you how to market your business? Make sure that the company has developed a solid internet based ordering system (so your customers can order via a web site). Also, the web site should allow you to sponsor new associates.

5.      Training – Does the company offer a reasonably priced (under $50) associate training kit? Is there training available on the web? Are there conventions and conferences available in cities near you? Are their weekly webinars and teleconferences.

These are the five main factors you should consider when choosing a company. When companies meet your criteria, then you have to use your gut instinct to make a final decision. Does this company feel right? Do I have a sense of peace? If so, then you are ready to join and begin a successful career in network marketing.