Avoiding the Pitfalls & Traps in Network Marketing
MLM Training tools for MLM Consultants business.
Network Marketing Pitfalls
“Discover the Pitfalls & Traps in Network Marketing that You Can Avoid – Saving You TONS of Time, Money & Mistakes!”
• What Network Marketing is Not
• Common Mistakes to Avoid For Newbies
• Common Mistakes to Avoid For Non-newbies
• Other Common Mistakes To Avoid
• People To Avoid At All Costs
Welcome to the exciting follow-up book on Network Marketing. In the first book, we have explored on one of the most important yet least talked about, most overlooked aspect of network marketing or Multi-level Marketing (MLM) – Knowing how to CHOOSE a network marketing company and getting the most out of it.
Now what? Okay. I have chosen the right company. Will it really work for me? The truth would sound more like how can I make the company WORK in my favor?
Remember the staggering truth that 95% of people fail in MLM? I strongly believe that among the 95%, there are sincere, hardworking people who work hard to make the business work for them, but are spending most of their time and money DOING ALL THE WRONG THINGS!
This book once again is not a typical HOW TO guide. There are lots of HOW TO scattered throughout the Internet and many, many more HOW TO available from your upline and from MLM books all around the world. Yet strangely many people miss out the fact that it is EASIER NOT TO do the WRONG THINGS than learning to do the RIGHT THING.
Ironically, common sense is not common.
Avoiding the wrong things saves you the valuable TIME (some people in MLM do the wrong things for YEARS) so you can learn how to do the RIGHT things with the time you saved.
Is this practical stuff or just theory? Must I do the wrong things myself to prove that it is really wrong so I can feel it for REAL? Well, A mother doesn’t need to go on drugs in order to prove to her child that they should AVOID drugs now, don’t they?
Remember that in MLM, just like in real life that we must learn from the mistakes of others. We don’t all the time in the world to make all the mistakes ourselves!
With that thought in mind, let us proceed once again…
What Network Marketing is NOT
• It is NOT an INVESTMENT PROGRAM! Just because you bought a business opportunity, it will forever be a business ‘opportunity’ and not a business if you sit and do nothing. This is not Unit Trust or Mutual funds or a Fixed Deposit Savings Account. The money doesn’t grow by you becoming a distributor. The more you invest doesn’t mean you will necessarily earn more.
• It is NOT a GET RICH QUICK SCHEME! Those who make it big in MLM within a short time are the EXCEPTION to the NORM. Do you have what they have? (The experience, built trusts, contacts, paid the price) Everyone who has made it had all paid the price.
• It is NOT totally a SALES RECRUITMENT PROGRAM. Some like to sell. Some are salespersons, being good in sales will not make you succeed in MLM.
• It is not MUSICAL CHAIRS. It is never about whom gets there first, sponsor a few people then sit down and watch the group build itself while the latecomers miss out on the opportunity forever. Remember that if the downline works harder, they will eventually earn more than their uplines.
• It is not a 9-5 JOB. In a 9-5 job, some people get away without doing any work sometimes (they still get their salary). But it is very obvious in Network Marketing that what you GIVE is what you GET.
• It is not a CLONING MACHINE. I am not down playing the need for uniformity and like-mind direction but remember that EVERYONE is DIFFERENT. Different people have a different personal touch when it comes to recruiting. Their relationships with their prospects vary from groups to groups.
• It is NOT a 100 METER DASH. It is a marathon. Business builders must pace themselves over a period of time. Going ‘all out’ to the point of exhaustion is just bad because it is the quality of the work that counts, not the quantity. Don’t ‘close the back door’ or jump into the deep end without a float.
• It is DEFINITELY not a RELIGION. Please never ever treat your business like it is the ONLY business worth getting into (friend, if you don’t get into MY MLM and if you join others, you are not my friend). They are NOT losers if they don’t join you! Please don’t ever, EVER do this. You will lose a lot of true friends.
Common Mistakes to Avoid For Newbies
Trying to understand everything
If you are new in your business and you sit down for days (some even take weeks before they make their first phone call) trying out the product, reading all the company brochures, understanding every single calculation about the compensation plan, memorizing all the names of the management in the company (I think we get the idea)…
This is a VERY SLOW way to get started in your business.
Your business is like riding a bike
(1) You don’t learn to ride by reading the best manual on riding
(2) You don’t learn until the moment you start peddling
(3) You learn by falling down
(4) You also learn how not to fall down after falling down the first time
Reading every single book in the industry
Most MLMs recommend a reading list and they are very helpful for new people especially if the information is factual and informative about the industry. Reading is also a very good habit to develop. But one of the major mistakes of new people is thinking that the more books they read, the more money they are going to make! Those books are mostly self-help books or network marketing self-improvement.
Most newbies spend too much time reading books for a number of reasons
(1) Overwhelmed by ignorance. Once again, trying to understand everything before going out there
(2) Overwhelmed by fear. The paralysis causes them to retreat to their books without meeting people
(3) Overwhelmed by frustration. They assume that after reading their first book, if they don’t achieve enough success, they get disheartened and feel the need for self-help more! They try another book. If they fail again, they will blame themselves again. Always remember: Books are subjective. It may work for the author but differently for another.
Doing the business alone during the first 30 days
Network marketing doesn’t care of if you are a CEO, entrepreneur, manager, housewife, college kid or a beggar. If you are new to the business you start from ZERO.
If you think you can earn a six figure income in 2 to 5 years time without following a system then you are grasping at thin air. There are people in traditional business who do make it within a few years but everybody learns from SOMEBODY and network marketing is no exception.
Here is an example.
There is this one guy who is an experienced businessman. He started in network marketing and wanted to do it his own way. He rented an office, hired a few staff, created a sales team and sent them out after spending a few hundred thousand dollars on capital alone. After 3 months, his business had nothing to show.
What happened? One of the main reasons of his failure was the fact that network marketing is not designed to run this way. His staff or sales team will not be able to duplicate the process.
There are uplines mentors to guide you and they don’t cost you any money to ask for help. I would go to them like a sick man would go to a doctor instead of an architect.
Quitting your job
Network Marketing is a business like any other business. Don’t get psyched into thinking that by burning my bridges and giving all I’ve got for the next 6 months without any financial support.
There is this saying that goes, if the only tool I have is a hammer, all my problems will look like nails. In network marketing, ANY form of financial pressure might kill your prospects because you will keep seeing them like money bags before and even after they ‘get in’.
Some seasoned networkers only ‘consider’ quitting their job when their income in their business matches at least double their current income.
Selling the business – I have a business opportunity for you
What you are doing now will be duplicated downline. Most people would agree that 80-90% of the population are not trained sales people.
Most people who CAN’T SELL, SELL things that DOESN’T SOLVE other people’s PROBLEMS, to people who DON’T LIKE BEING SOLD, who perceive you as a SLEAZY SALESMAN trying to get into their pockets.
This means that most newbie make the mistake of trying to sell the opportunity to others (who don’t like to be recruited or sold to). People are looking for solutions to their problems – therefore pitching the opportunity usually comes across to prospects as a way for the business builders to get their hands into the pockets. This usually leads to:
Begging people to join
New distributors get so hard up on recruiting people that they wind up coming across as high-class beggars in suits. They pitch and sell and pitch and sell that prospects get afraid of them. Some even chase down their prospects.
Always remember that the ball is in your court. They are the one who needs the opportunity and you are HELPING them to realize this. Don’t try to convince them. Instead, when you start helping people out of a genuine concern, dealing with their problems, they will be attracted to you and they in turn will ask you for opportunities.
Explaining the business over the phone
The purpose of a phone call is to INVITE the prospect. If phone calls can close all the deals, no one will need to hold opportunity meetings anymore or rent buildings. People will just sit at home and call people to become millionaires.
Once your intention is very clear that you are just inviting, you will not confuse people by talking about the opportunity, product or plan. Imagine, the other person on the other side will have a chance to say no to you even after you have explained everything for an hour or so and that is one thing you don’t want to have.
Telling prospects that this is not MLM or network marketing
Most newbies are so afraid or embarrassed when the prospects ask this these dreadful questions:
(1) Is this MLM?
(2) Is this one of those networking thing?
(3) Is this one of those pyramid selling?
(4) Are you trying to recruit me into those Direct Selling things?
Most will go, “Err… Um, no its not. Yeah it’s MLM but we’re not really selling… hello? Hello??”
Ever get those sinking feelings?
Never ever lie to your prospects. It reflects badly on you and people are not stupid. Either tell them up front it IS an MLM or Networking business (we should be proud that we are in a multi-million dollar industry) or turn the question around by asking, “What do you mean is it MLM, how do you feel about MLM?” Then let him or her tell it as it is. Make the appointment afterwards.
Remember: if you are shady about what you are doing, your prospects will think they will have to do the same as you if they join you.
Tricking my friends to an opportunity meeting
Another big mistake: asking your friends or prospects out for a drink then driving them to an opportunity meeting without informing them that it is an opportunity meeting.
You gain nothing by hiding things from your prospects. Be open and proud of what you are doing! You sponsor people using CONFIDENCE, not trickery.
Telling everyone what their income is
I wouldn’t answer this question at all. Why would anyone go around telling others how much money they are making in their JOB? Would you find it insulting if someone asks you what your income is in your business?
If people realize the audacity about asking one’s salary in work or business, shouldn’t the same apply in network marketing as well?
Most networkers usually go around trying to prove their worth to others so they hope by parading how much (or how little) they are making, they hope to ‘gain’ others. A successful networker radiates leadership and confidence so most people won’t ask them how much they are making. Its all about posture.
Not being yourself
This is the worst kind of disease among distributors.
Imagine if you are looking for your good buddy whom you have known since high school. Every time you see him, all you talk is jive, or nonsense. All of a sudden, you go, “Dude, I’ve got this business opportunity that will CHANGE YOUR LIFE!” Your friend will think you are on drugs or something.
BE YOURSELF! Don’t try being someone you are not.
Never calling upline
Business duplicates. If you don’t call your upline, do you think your downlines will call you? Do you think it is easier to call ONE upline or having to chase after 10 downlines? 10 might become 100 and you will have a hell of a headache if you do develop the habit to call your upline.
Uplines would be happy to receive your calls because it means business is growing for them and for you as well.
Don’t get too hard up when a prospect says NO to your business. It is easier said than done but we must realize that MLM is just like any business – mixing emotions with it is a recipe for disaster.
When a prospect says NO, we must not take it personally because most of the time they are saying no to the opportunity and not YOU. They might not believe in themselves or they might be having things on their mind at this point of time. They might say YES in the future so don’t dissolve friendships just because they don’t join you.
The worst thing can happen is that you start feeling sorry for yourself and brood or complain about the business. If you let the NOs sap your excitement, it creates a domino effect which will kill your business for good.
Using the product before selling it
One of the favorite excuses of lazy distributors is, “I haven’t tried the product yet therefore I can’t start my business yet!”
It is good to use your own product so you can have good testimonials or are convinced yourself. However, have you ever seen a man sell shoes to a lady? If you are selling a good product, its quality will speak for itself, especially when there is a demand (like ladies shoes. Do you think the lady will ask the sales man if he has tried the ‘product’ before?)
Common Mistakes to Avoid For Non-Newbies
Passing negative downline
NEVER EVER PASS NEGATIVE DOWNLINE!
UNDER NO CIRCUMSTANCES!
LEADERS MUST NEVER MAKE THIS MISTAKE!
I don’t care if you had a really bad day or your downline is your best friend since junior high. When people join a business, they don’t join an opportunity, they join YOU! It means they believe in you and see you as some kind of leader. If you pass negative down, they will lose their confidence in you and your business will be destroyed when they do the same to THEIR downline.
When you have negative or challenges, BRING IT UPLINE. Never down.
Spending more than you can sustain
If you are a leader with a large group of downline in different states around the country, you could exhaust yourself doing meetings and rallies everywhere. You may be making 5 figures, but always be careful.
Once, there is this leader who had people in another state asking him to do a rally in their town. He rented this hotel for a few thousand dollars. His people promised that they will bring more than 50 new prospects. But when the actual day came, only 5 turned up and only 1 signed up. The trip was a total disaster and cost him a bomb!
Another big mistake is spending all the money you earned on new cars and houses. But what happens if your network is not stable? There may be many leaders under your team but you will never know what happens the next day. Leaders can join other companies, they might get sick or even die! Then how are you going to pay for your new house, car or that new yacht you bought? Never spend too much. Always save for a rainy day.
Reinventing the Wheel
Many seasoned networkers make the mistake of reinventing the wheel. If your company has been established for many years or has even tapped the international market, it is crucial you follow their system as it is in line with the company’s direction and is a time-tested business building system.
Don’t reinvent the wheel. If you do, your downline may not duplicate and it will spell trouble!
Network marketing has been around for decades. Even newly startups can benefit from the experience of other companies.
Would You Leave Your Baby at home alone?
Of course not. The funny thing is, new downlines are like newborn babies! Hard to imagine, huh? I am not trying to insult anyone here, but there is a high dropout rate for newcomers and it is scary. Why does this happen?
A newborn baby if not taken care of will be a target of germs (negative energy, rejection, feeling emotionally down in the business), kidnapping (head-hunted by other companies without armed with the right information), and will cry a lot (they will whine to the upline when problems come). I have seen corporate businessmen whine like little children when they didn’t get their commission on time or the admin never replied their e-mails or even when their friends said something negative.
Downlines require your attention especially in the first few months where they are most vulnerable.
I won’t give up versus the definition of insanity
If I have a downline who is not making money and not GROWING, you know what I’d do? I’d ask him to consider other opportunities and refund his money from the company (if possible).
It is very important NOT TO GIVE UP. But on the other hand, what are they doing about it? The definition of insanity is DOING THE SAME THING OVER AND OVER AGAIN EXPECTING DIFFERENT RESULTS!
There are downline who just refuse to make a change in their lives to get to their goals. They change too slowly and keep doing the same things over and over again. If I didn’t have a conscience, I can keep on telling him, “Don’t worry, you are doing good. Don’t pressure yourself. You are getting there, don’t give up and keep on keeping on…”in an effort to keep the numbers up in my organization, or I could tell him the truth and say, “Look, you’re not making money here, either you shape up or shape out. We have no room in our team for people not willing to change.” Having numbers means squat if your people are not making money and are not growing.
If I scratch your back, will you scratch mine?
What if your colleague or associate who is in another MLM asks you to join them? There are times when people get so desperate for business, they go to other opportunity meetings of other companies in an attempt to recruit new blood. This is a good way to expand your network, but… most people will pitch their opportunity to you and will only oblige you mostly in an attempt to gain your friendship and recruit you instead.
The worst thing that can happen is spending a lot of money on joining fees of other companies and not getting a single one of them in yours.
You may scratch someone else’s back, but they will not necessarily scratch yours. Don’t play tug-of-war.
Placing people under people in an effort to motivate
Some people make promises to other people in order to get them to join. They might say something along the lines of, “If you join under my team, I will build one leg or one group for you!” or they will even place people that they personally recruit under their lazy downline in an effort to motivate them!
This kind of action not only breeds laziness and dependency, it even slows down their progress! Their other downlines under their group will also expect them to place people under them duplicating a hollow organization.
Even if you are in a binary or a matrix, certain expectations should be communicated clearly to downline that spillover will only occur if they meet certain conditions and not let them wait for their uplines for spill over (see my first book on the section marketing plans).
GOOD SALARY WITH BONUS
NO EXPERIENCE NECESSARY!
If you see this ad, what would you be thinking this is all about?
If I see these kinds of ads in the newspaper or online, I would be deceived into thinking someone is offering me a JOB. The expectations would be unclear and the person invited would not have a clear intention when he arrives for the ‘interview’ which will turn out to a ‘show-the-plan’.
Another problem with advertising:
Unless you have a low cost, high moving retail product that can generate quick cash for distributors, do not advertise. Most new people burn themselves out of their businesses with advertising expenses. So it is very important to train your new downline with low cost methods or your attrition rate would be rather alarming.
Not keeping the business simple
Seasoned networkers might be in MLM for a long time and may even memorize the compensation plan much better than the company themselves!
You may understand the plan but a new prospect might get too confused if you give them information overload!
Normally, for a new distributor, things must be kept so simple for them that they will believe that anybody can do this business! If you bog them down with so many details, they will sit down and think too much.
Too much analysis will lead to paralysis of the mind.
Remember: A downline’s effectiveness is only half of yours. If what you are doing can not be easily duplicated, it does worse down the downline.
Trying to turn ducks into eagles
What do ducks do? They quack.
What do eagles do? They soar.
What happens when you try to make a duck soar? They fall flat on the ground and they quack louder!
Sad to say, not all downline are like eagles. We wish they are but many people spend too much time with ducks and try to turn them into eagles. They quack too much and everyone becomes ducks in the end (like quaking about the problems in the company, spreading negative all around).
Personally, I would rather have eagles in my team so all of us can soar together.
No half way (plane taking off)
There is no such thing earning a mediocre income in network marketing or MLM.
If someone says, I would be happy to earn a few hundred bucks a month, they will most likely give half hearted effort. They don’t achieve enough momentum to get to ANY tangible income. You either go all the way, or no way at all.
Allow me to illustrate.
If a plane takes off, it needs a certain momentum to take off. Lets say if we need about 150 miles per hour to take off, you must exceed that speed or else we are not flying anywhere. It won’t take off at 140, 145 or even 149!
Just like in network marketing, only by producing top-notch effort, will outstanding results (often better than their expectation) occur.
No such thing as total retirement
Contrary to popular belief, there is no such thing as total retirement in network marketing.
If you stop building at the deepest levels of your organization, they might start dying off one by one. The attrition will follow its way up until even your leaders might quit themselves (out of frustration or loss of income) and you will be the only one left.
Even people who have built groups of thousands can lose them overnight if they are not careful. Unstable companies or change of management can happen but with sound leadership, your people will follow you no matter which company you go to. Just make sure you take care of your leaders and especially all you new people. You can’t just leave the fate of your babies to your other slightly older babies.
Your MLM business is your business and your responsibility to get your group moving.
Other Common Mistakes to Avoid
You MUST work closely with your upline. ‘But, I don’t want to bother them. They are so busy with their huge team. They are making huge income. I am not worthy to speak to them’ – WRONG! Don’t be afraid to call your upline! Don’t worship them. They are there to HELP YOU. The fact that they are earning money from your group gives you the RIGHT to request their help!
• Your Upline is NOT your BOSS.
• Good, sincere uplines are always there to help you and guide you (unless they are untrained and really bossy) but the norm is that generally there will be someone who wants you to succeed.
• We are in business for OURSELVES but NOT BY OURSELVES. If your upline calls you, motivates, encourages and helps you, YOU ARE ONE LUCKY PUPPY!
• Uplines are not OUT TO GET YOU, so don’t avoid them – if you do it is YOUR LOSS.
Another key point to remember about approaching your prospects
THE HEALTHY DO NOT NEED A DOCTOR – IT IS THE SICK WHO DO!
Everyone is ‘sick’ in a certain way and they will look for medicine to solve their problems. Ever seen a doctor hard-selling medicine? No, the patients beg the doctor to CURE them. The patients are looking for a solution and the doctor doesn’t sell them, he gives advice and prescribes.
Stop being like a BEGGAR!
Don’t go, “Come out and listen to my opportunity, I’ll buy you a drink.” You spend 2 hours explaining to them your opportunity and in the end they didn’t join you. Why?
How do you prescribe medicine to their sickness? First EXPOSE their sickness, generate interest in your ‘medicine’ and HELP THEM by UNDERSTANDING their needs.
Types of People to Avoid at All Costs
People who Pressure with Unrealistically High Entry Fees
Strictly, unless you can afford it and you love the products, you must avoid people who unnecessarily pressure you into high inventory loading or front loading. Your sponsor might be going to the quick sale and that can happen even after you joined as a distributor.
Of course you will normally get a much higher profit margin if you buy more products, but you have to consider whether your prospects are willing to do the same thing. Maybe they just want to be customers. Not all will come in at the most expensive entry level.
Hardcore MLM Junkies
I would only join serious networkers who work hard in his company. Some MLM junkies are only in for the fast money and you will find it hard to locate your sponsor if he suddenly jumps off towards the next smoking hot opportunity.
Normally, an MLM junkie will join a company after he or she gets really hyped up by the opportunity meeting or rally. They will be on fire for a while before they lose steam and die a natural death. The root cause of the problem would be running into difficulties in their business and when they can’t handle the struggles, they find reasons to leave and join other companies because they are ‘better’ or because their upline ‘is better.
Often, we must keep in mind that if we can solve the struggles within ourselves, then we will not find problems with our businesses. The main reason why I would hesitate to join an MLM junkie would be seeing him all hyped up about one opportunity and later on he will tell you to join another one and give reasons why the previous one he got me into is not as good as this one.
The Energy Sucker
Sometimes, I would turn this prospect away from my group. This person is like a disease among the sheep. A good shepherd would remove the disease sheep from the flock to preserve the other sheep. They carry too much emotional baggage and are the biggest cry babies in the networking industry.
This energy sucker would suck your positive energy dry and frustrate you with his problems like all the pain of his rejections, complaining about the company, the team, the staff or even the products. If you are not careful, he will pass that negative energy to your other downline and he might get them all to leave.
These people are not bad people in and off themselves. They are great crowd pleasers and when you ask them to share testimonials or goal setting; they would be the first to give a rousing speech.
The problem becomes when all they do is talk, and tag along and give all kinds of excuses to justify their results. You can’t depend on them but yet you can’t turn them away because they seem so sincere and has become one with the team.
One of the best ways to deal with them, since they like all the attention, is to get them to bring their friends to home parties or rallies or any events organized by the company that will give them lots of fun. They will forget that they are doing ‘work’ while you build your friendship with their prospects.
Mr. or Ms. Know-it-all and Heard It Before
These are people who are very good analyzers and attend to all the trainings and meetings. They write down every bit of information here and there but also don’t bring the results.
Because they are know-alls, they will give you a hard time when you are trying to educate them or push them to success.
They will not attend trainings with open minds because they will go, “ah, I’ve heard this before. They are not teaching me anything new here.” They will even start criticizing the speaker in their hearts.
Training MUST be attended repeatedly so our skills can be updated and reinforced. These groups of people would most probably be making little money in their network despite their large storehouse of information.
When you approach someone with your opportunity and they are trying to sell you something at the same time, you might be facing a hard time if that person is adamant on selling you his wares or if he is just plain stubborn.
Not that you must avoid every single negotiator, but bear in mind that these people are very calculative and will only join your network if his or her price is met. Then they might start pinching lines from your network and you will find that your people have gone over to the ‘other side’. Afterwards, it would be too late for you to remove that spy within your midst.
Other people in network marketing, especially the more established ones will take contact over a couple of weeks or months before they are ‘ready’ to join yours. If I had to go for other networkers, I would rather go for the ‘weaker’ ones or else I would be just wasting my time. Furthermore, the weaker ones may have connections with their leaders so there is a chance you will connect through them because of their relationship with their leaders.
These group of people are the biggest poison in the networking industry. They will do WHATEVER IT TAKES to recruit people into their network. Even if it means using unethical methods just to get them.
Some of the tactics include high-pressure hard selling, friendship blackmail and even worse: line pinching.
Be very careful of these people when they are talking to YOUR prospects. They will appear friendly and helpful, sharing with your prospects and welcoming them to the team, and the next thing you know it, they wind up in THEIR downline.
They might even pick at your own existing downline and entice them to get into other MLMs that they are already a part of.
These people will act just like a sloth. Doing nothing! They join MLM companies to purchase NOT a business opportunity, but they purchase ‘HOPE’.
Surprise! MLM requires work!
They will expect their uplines to do all the network building for them, they may even attend all the meetings, rallies, home parties, reading all the books and listening to the tapes.
But there is one thing that he or she won’t do.
He or she will NOT SEE THE PEOPLE. They won’t talk to anyone and all the ‘work’ they have done in the business amounts to nothing just because they are too lazy to see the people expecting their upline to do everything for them.
Here are some quotes that will summarize the entire book. Good luck with all your future MLM success and I hope this book will make that road to success much shorter. And always remember, “I might as well learn from the mistakes of others, because I won’t live long enough to make them all myself!”
Even more inspirational quotes:
An error doesn’t become a mistake until you refuse to correct it.
- Orlando A. Battisa
Experience is the name everyone gives to his mistakes.
- Elbert Hubbard
The greatest mistake we can make is living in constant fear that we will make one. - John Maxwell
The man who makes no mistakes does not usually make anything.
- William Connor Magee
A man who never makes a mistake always takes orders from one who does.
Remember your past mistakes just long enough to profit from them.
- Dan McKinnon
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