A Common Network Marketing Mistake
When you are building an organization, should you focus on business builders or product users?
In the network marketing and MLM industry, distributors are often told that they need to find 2 types of people to put into their business: Product Users (consumers), or business builders (people that are trying to make money with the business).
Often, it is presented as a mutually exclusive option, meaning that a person is either a business builder OR a product user. When operating and attempting to grow a downline, networkers and MLM’ers are usually encouraged to focus their efforts on acquiring business builders if they are trying to grow a business. In theory, it only makes sense. If you want a business, and specifically if you want leaders, then find business builders. If you just want to help people enjoy the product, find product users.
This line of logic makes sense on paper, but I’m sure we can all recall certain theories that made tons of sense on paper, but didn’t work in reality.
Network marketing, or multi-level marketing, is not an industry. It is a compensation model. Instead of being paid on the front end for consumption (like a traditional retail-compensation model), you are paid on the back end for consumption. The important thing to keep in mind is that without consumption, NOBODY GETS PAID. You can have 10,000 people in your downline, but if nobody is using the product, then nobody gets paid. Consumption of product is what allows MLM companies to cut distributor checks. Nobody gets paid on simply recruiting and sponsoring.
Why is this important?
Well, if you’re trying to build a business and generate revenue with network marketing as vehicle to that end, then it’s absolutely imperative to your business that you have a distribution channel that focuses on consumption.
So here’s the big question: How do you do that? How do you build a distribution channel from scratch that emphasizes consumption?
You lead with your product or service.
Instead of focusing all your efforts on going out there and trying to find other people to blow up your downline for you, focus your efforts on finding those consumers that are already demonstrating a need, want, or desire for your particular product or service. Then, you simply position yourself in their pathway of consumption. By presenting them with a product solution, and then showing them the “opportunity” as a means of subsidizing their usage of that product (get the product for free) or even as a way to make some money over and above that, you can then build a downline with a solid foundation of consumption.
But that’s not the best part.
The best part is that by leading with the product or service, you will dramatically increase your retention rates.
You see, when you lead with the product or service, you will be building a solid foundation of consumers. In addition to that, you will also have business builders that are taking advantage of the business opportunity to get the product for free, or because they recognize the value of the product they are receiving, and want to get that same product in the hands of other consumers who are looking for similar solutions. By leading with opportunity, you build a downline based on greed. You have a bunch of people in you downline that are there to make a million bucks. So when 3 months pass by, and they are still not making a million bucks (this is residual income, remember?), they quit using the product. The only reason they ever used the product in the first place was to make a lot of money, so when they’re not making a ton of money, they quit.
But when you lead with the product, you are solving a consumers problem. So if they do decide to take advantage of the business opportunity, they’ll stick with it because even though they’re not making a million bucks in 3 months, they believe in the product, the values and the benefits that the product brought into their life, and therefore continue to consume the product. That’s why they got started in the first place; it was based on the need of the consumer for the values and benefits that your product or service offered. Because the opportunity was not stressed and presented as the sole reason for consumption of product, then the consumption of product will continue even though the distributor is experiencing the usual bumps and bruises that go along with the creation of any business.
For most people, greed is not motivating enough to keep a person going when business is slow and the dreams of margaritas on the beach seem unreachable. But the passion and belief in the value of a product IS enough to keep a person going when breathing life into a business. And that will make the difference between a 65% attrition rate (industry standard for most downlines) and a 2.5% attrition rate (the current standard for one of my downlines).
If you lead with the opportunity, you will probably go broke, and your organization will flounder. If you lead with the product or service, you will create enough income in your lifetime that you’ll have to hire help to spend it all