Why People fail at Network Marketing

It seems that a lot of people that have been involved with a network marketing business and have at one point failed. In fact, it is said that 99 percent of all distributors don’t make any money. Do you ever why that is the case? That only the top 1 percent ever make money? There are various reasons why people may quit. But I want to give some plausible reasons why people fail at Network Marketing. Continue reading to find if any of these apply to you.

Lack of sales skills and lack of building relationships

Most people that come into a network company usually do so because of one key reason. The promises of how much money they can make. The problem is that most people who join the company are people who have never done a day of sales and don’t have any experience in the sales profession, I was one of those people. As a result of a lack of sales experience, when most distributors run into resistance, they end up giving up, not understanding that the sales profession is a game of attrition. The reason that the sales game is a game of attrition can be rooted in customer perspective.

  • People naturally don’t like salesmen possibly because of the stereotype of the sleazy car salesman
  • Customer’s don’t like to feel wanted just for their money
  • It takes around 5-7 times to convince people a product

People naturally don’t like salesman

 

 

People naturally do not like salesmen because of any underhanded tactics that they may use to pressure them into buying. Some have even lost money because of a bad experience with a salesman. If they had a bad experience before with being scammed by salesman, the odds are that experience ruined it for any other salespeople who are truly looking to make the lives of others better

Customer don’t like to feel wanted just for their money

People want to know you are sincere in solving their problems and not just to look at them like they are dollar signs. They prefer doing business with someone they know and trust because they know they are not going to be deceived. With someone they don’t know, they would want to build trust which will take time. In fact, the feeling of being used feels horrible more than anything. The problem with distributors in Network Marketing is that they are not to interested in building relationships with potential customers or clients. Instead, they are only after the money.

It takes 5-7 times to convince people

Most people will not buy a product until the fifth or seventh time. This can be for multitude of reasons such as not being completely convinced of the value proposition especially when the product they are purchasing to may have an expensive price tag. After all, the customer has to spend money and needs to make a more informed purchase decision.

Another thing to consider when starting a business, especially with those involving large sums of money, is that money is an emotional subject for most people because it is connected to their time to earn it. As a result, it is very difficult to part with. Most people who are in an MLM business would love people to part with their money because they make money. To make a point about money being difficult to par with because of its connection to time, if someone earn $120,000 a year and they are paying $50,000 for a downpayment on a house, that downpayment is worth 5 months of their time. Whereas if they earned $1,200,000 a year, that house is only worth about 2 weeks of their time.  Its not the loss of money that people are concerned with, its loss of time. A product has to be proven worthy of value to that persons life in relation to the time that they pay for it.

They don’t have excellent training

Unfortunately, starting a business especially in a “legitimate” MLM is still a business and needs to be ran like one. After all, you don’t see McDonald’s not giving their employee any special training do you? Within some MLM’s, there are some people that are good at training new recruits, then there are others that are not good at this.

Those who have a mentor that is not quite good at training people tend to get lost. On top of that, they follow the bad habits of the people that bring them in. The end result being that the recruit ends up frustrated with lack of direction as well as results and end up filtering out of a failed business opportunity. This takes some toll on their self-esteem as they start to feel that they are not cut out for owning their own business.

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Don’t know how to train people

As a transition into my next point, because they don’t have awesome training, they don’t know how to train new recruits or distributors in the business. I have written about this in a previous post and it bears mentioning that most people expect things to go well because of all the enthusiasm that a company manufactures. A lot of people that work so heavily on the recruiting aspect of it do so because of how much money they can make of these recruits efforts. It is very seldom that you find a distributor that is willing to train the recruits in the aspects of the business. In fact, a lot of the time, they believe that the system will take care of itself and run on autopilot. The recruits then mimic what they learn from the mentor and also end up not training the people that they bring on. What you ultimately end up with is a large amount of supposed salespeople but no sales at all.

Delayed gratification vs Instant gratification

This is not so much something that applies strictly to network marketing but just applies to business in general. A lot of people who are excited about a new business venture tend to think that the money is going to start flowing in fast. The MLM industry is no exception. After all, paychecks start to flow into peoples bank account as soon as they are clocked in to their job. Even a new hire can expect to get paid after 2 weeks on the job.

With any business, no matter what model, making money is going to take a lot of work. Some may see profits as fast as 6 months and others may not see profit for 5 years. The point is that most people don’t have reasonable expectations of time and end up being unreasonable with their goals. This trait is a habit of those who were trained to think like an employee. If you are a current employee, you have to understand that having a business requires you to have a different set of values. You have to change in terms of how you think.

Business Model Flaws

The business model looks very similar to that of a pyramid scheme. However, a very thin line distinguishes them from technically being considered illegal. While there are some legitimate companies that offer products that are of value (i.e. Beachbody with P90X, Insanity), most seem to have a product that masqueraded as something that has no value to the end customer but end up being a hiding point for the true nature of the scheme. The point is that people are just in the wrong business altogether. The way you know if the company is potentially a scam is if the product that is being sold is selling at a similar price through other avenues. If prices are more expensive, odds are you did not buy the product at a wholesale price, but rather retail.

Do you have any other reasons why people fail at network marketing? Did you ever fail at it? Do you think it is just the industry having a design flaw in and of itself? Let me know in the comments below.

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