Avoiding the Management Trap

(The following information is taken from Your First Year in Network Marketing by Mark and Rene Yarnell.  I am providing you highlights in the next several blogs in hopes that you will be equipped to survive and thrive in your hardest year of your network marketing business – the first one.  Here are the highlights from Chapter 2.)

It is important for every new associate to know that MLM is based on team-building philosophy rather than a supervisory one.  A frequent cause of failure in MLM is the mistaken belief that we must manage our downline associates.

The Management Trap: After successfully recruiting several of their friends into the business, new associates stop recruiting and focus solely on helping their friends become successful.  It sounds logical, but it really is a trap.

There is a significant difference between managing and supporting a downline organization.  Managing your downline will cause you to spend a disproportionate amount of time on one leg of your downline to the detriment of the others.  It creates a false codependency instead of teaching and encouraging them to learn to do for themselves.

This does not translate to ignoring your downline; it simply means that you want to help them need you less and less as they learn the business.  Teach them to teach their downline, step back and support them only as they need it.

Managing your downline results in weak and lazy associates who will be quite content with you doing their work for them.  Also, while you’re managing them, you’re not recruiting new prospects.  Remember that continually sponsoring new associates is what adds vitality to your business.  Do not stop recruiting until you are earning enough to live on comfortably.

Supporting your downline involves responding to their legitimate requests, helping them close a prospect and giving them encouragement when they are struggling.

Learn to recognize the difference between productive activity and ineffectual, time-wasting practices.

Beware that signing up a family member and then managing their team will only lower your income, spoil your family member’s chances to succeed, and derail your recruiting and growth.

The Messiah Complex: This is similar to the Management Trap, but its emphasis is more on saving people.  Spending too much time trying to ‘save’ one person hurts the rest of your downline.

The reality is that your associates who demand the least amount of your time and attention are usually the ones who become the most successful because you have trained them to be self-sufficient.

If new associates finish their training and go to work without calling you every day and asking you to do everything for them, rejoice!  Those who lean on their uplines for everything are usually the ones who fail the most rapidly.

Rather than manage, provide a duplicable strategy for you new associates and then allow them to create their own success.  Help them stay focused on their ‘Why’ and coach them to keep moving in the right direction.

Go Wide Fast!

Recruit a wide base of associates.  Don’t be satisfied with minimums.  Keep recruiting until you are making at least $10K per month. 

Remember, MLM is basically a numbers game.  Keep doing what you see your successful upline leaders are doing and teach it to your downline. 

This is a duplication business.  Your associates will do what they see you doing.  If you manage them, they will manage their folks.  If you spend your time supporting them while recruiting new prospects, so will they.

The secret isn’t managing your people; it’s finding leaders, who will in turn find other leaders.  So, develop your leadership skills and teach your associates to do likewise.

Recruiting is the only viable way to offset the inevitability of attrition.  If you stop building your frontline (people you personally sponsor) before you have a solid income, you will fail in MLM.

Plan on recruiting 2 to 3 years before slowing down if you’re doing it full time; if you’re part time, it will take even longer.

While many people criticize MLM after they fail, it’s usually not the fault of the industry. 

Pitfall:  Never tell people that all they have to do is sign up, give you their prospect list, and you’ll do all the work.  It doesn’t work.

Help your new associates with their first few meetings and then cut the cord.  They are then forced to take initiative and become leaders.

MLM is about building leaders and training others to do the same.  Teach them how to work their list, help with closing, but don’t do it for them.

People who have the will to succeed, will succeed, regardless of their circumstances!

The Rejection Rocket

(The following information is taken from Your First Year in Network Marketing by Mark and Rene Yarnell.  I am providing you highlights in the next several blogs in hopes that you will be equipped to survive and thrive in your hardest year of your network marketing business – the first one.  Here are the highlights from Chapter 1.)

The Rejection Rocket can strike us at any time leaving us immobile and ready to quit.  It sucks out all of our enthusiasm and excitement; both of which are essential for our success.

Rejection is the primary cause for failure in MLM, and frequently people fail before they ever begin because they are not properly prepared by their sponsors to handle rejection.

Rejection from Spouses

When new associates first ‘get’ the MLM business, they are excited by its potential.  They make their list of their top ten prospects and want to share their ‘good news’ as soon as possible.  They have projected their enthusiasm onto everyone on their list, including their spouses.  So, rather than wait to be properly trained, off they go, and sure enough their spouses are the first ones to launch the rejection rocket.  Their spouses think that they have gone off the deep end, and all their new found excitement evaporates.

It is the responsibility of every sponsor to fully prepare prospects for rejection, and then equip them with the tools and skills to handle the rejection.  It is helpful for sponsors to present the full business presentation to spouses on behalf of their new associates.  At the same time, the sponsor needs to emphasize that new associates NOT try to explain the business to their spouses, but rather, to get them to a meeting or wait until they are fully versed in the presentation.

Rejection from Family and Friends

Freshly trained associates are excited and eager to overcome any argument their prospects might throw at them.  It is easy for them to slip into the ‘Winning the Battle’ mode and as a result lose all opportunity to at that moment or at a later date to present the business.  It is important for new associates to develop listening skills in order to hear where a person is at in their lives.  With a little practice, new associates can learn to discern who is open to the change that MLM brings.  If the timing is clearly not right for their friends, they are better off waiting to revisit them in six months.

Another common reaction from prospects is called the ‘positively negative.’  As soon as an associate mentions that their business model is MLM, the prospect expresses in no uncertain terms that they are positive that they want nothing to do with ‘pyramid scams.’  The prospect’s severe rejection of MLM is so profound that the new associate loses all courage to reapproach this prospect even after they are seeing financial success.

Rejection can come in the form of the ‘Good Ol’ Boy’ reaction.  Many friends and family are too polite can caring to respond with an outright “no,” so they agree to come to a business meeting.  However, they really have no intention of attending.  They are ‘no shows’ and leave the new associate devastated and feeling deceived.  This can be the hardest form of rejection to overcome.  Knowing this is a possibility ahead of time can soften the blow.

If not properly prepared for rejection, new associates can sink into the morass of despair.  They can think, “Why in the world am I doing this?  Nothing is worth this kind of humiliation.  Since nobody seems to want to do this, maybe they know something I don’t.  If I quit now, I’ll never have to go through this again.”

The Right Attitude toward Rejection

New associates need to anticipate rejection, and purpose in their hearts to overcome it.  They need to turn battles into a source of motivation that will propel them through these rejections.  They should plan to send a copy of their checks to their rejecters in six months.

Preparing Prospects for Rejection

Remember that the rejection rocket can be launched at anytime in your career and can catch you unaware.  However, disarming this weapon is fairly simple and needs to be taught literally during the close of the initial recruiting meeting.  Warn them about the two primary causes of failure so that they can avoid them. 

The first cause of failure happens when new associates listen to those who do not know what they are talking about.

Do NOT share the business with anyone until you are completely trained and knowledgeable about your company.  Why?  You will fail to present 100% of the information that listeners will need to make a good decision.  Instead, they will ridicule you, and that will leave them in a place where their pride will be an unmovable obstacle to ever signing them up in the future.

So, until an associate signs up and gets trained professionally, they must NOT approach anyone (spouse, friends, family) to share the business.  Why?  Friends and family who know nothing of the business will automatically conclude it is a scam and will only seek to save them from disaster.

The second cause of failure happens when new associates do NOT listen to those who do know what they are talking about.

This is critical because success depends on duplicating what has already proven to work.  Many new associates think that they have it all figured out and try to do it ‘better’ only to fail miserably.  MLM is totally different from traditional business.  So, if a prospect is not willing to learn and duplicate what their sponsors are showing them, do NOT sign them up.

Two Mindsets toward Rejection

Associates can strive to be well received by prospects and simply persevere.  Persistence along with complete confidence cannot be defeated.

Or, associates can try to avoid rejection by using the three step process: say nothing, do nothing, achieve nothing.  Fear of rejection can lead to ‘call reluctance’ which will lead to failure.  Taking the initiative is the key to being successful in MLM.

Not Being Taken Seriously

First year associates should not try to close prospects alone.  Teamwork with an experienced, successful upline associate is much more effective in bringing a prospect on board.  Meeting someone who is actually making big money overcomes the perception that only the first people into the business ever make money.

It is also important to connect with positive people who are reinforcing your worth.  Do not prejudge your prospects!  “There’s a seed of greatness in everyone.  Never qualify prospects for any reason.”

Not Taking Rejection Personally

New associates need to learn to not take ‘No’ personally.  For example, if you were a waitress taking fresh coffee to tables for refills, would you perceive it as a personal rejection if a customer said, “No, thank you,” when you offered to refill their cup?  I would hope not. 

In the same way, when someone says, “No, thank you,” to your MLM business, they are not rejecting you, but rather the business.  Simply, move onto the next prospect, and sooner or later, you will encounter someone who is interested.

Not Talking to Enough People

The law of balance: Increase the number of people you approach and decrease the impact of rejection.  If your goal is to build your organization, 80% of your time and energy should be put into prospecting.

Each week, set you goal for the number of contacts that you will make.  Keep putting prospects into your pipeline, and sooner than later, some will come out the other end as associates.

Prospecting small numbers of people magnifies rejection while prospecting large numbers of people diminishes the effects of rejection.

Conclusion

Rejection is inevitable in MLM.  How an associate reacts to it will make or break their business.  Early training to anticipate and dissipate rejection is a major key to success and longevity in MLM.

Persevere or Perish

The following information is taken from Your First Year in Network Marketing by Mark and Rene Yarnell.  I am providing you highlights in the next several blogs in hopes that you will be equipped to survive and thrive in your hardest year of your network marketing business – the first one. 

The remarkable thing about network marketing is that survival (staying in the business while others are leaving it) is exactly what results in dramatic wealth.  Attrition is a major component of our type of business.  However, it is rare to find someone who has worked steadily in network marketing who does not eventually achieve success.

In network marketing, you either persevere or you perish.  The Yarnell’s research in 1998 showed that an estimated 95% of those who survive 10 years in network marketing become wealthy beyond their wildest expectations. 

In addition to financial freedom, these folks achieved an equally important time freedom.  They were able to have the time to do what they wanted with the people they wanted to be with.

Traditional business models offer little security these days.  MLM (Multi-Level Marketing) is a system in which ordinary folks can invest a small sum and, through tenacity and determination, can reap remarkable financial reward and personal freedom.

While MLM avoids the pitfalls of traditional business models (payroll, employee expenses, high overhead, etc), it has its own pitfalls that so many get trapped in and meet their MLM demise.

Discouragement and depression can set in, and folks give up.

Once MLMers lose their drive and enthusiasm to persevere through the tough months, once the excitement is gone, in many cases, so too is the opportunity to achieve dramatic wealth.  “It’s easier to give birth to a new distributor than it is to resurrect a dead one.”

The Yarnell’s statistics indicate that over 60% of all new network marketers quit in their first year, which is the most critical phase of the learning curve.  It is so important to commit to persevering through the first two years in order to reap the financial rewards in the years that follow.

The authors agreed with the suggestion that, “every MLMer was a lousy MLMer first.”  While the educational process in MLM is relatively brief, it can be devastating to ill-prepared new associates. 

Rejection is hard for most people to handle.  When an excited new associate approached a prospect that they are ‘sure’ will join the business and gets shot down, the emotional downswing into discouragement is huge.  It is even worse if they are ridiculed by those they love and respect. 

Expect rejection.  Get over it.  Move on to the next prospect.  Never give up.  Remember that MLM is the greatest opportunity in the history of the free market!

How to Develop a Residual Income

How would you like to do something once, but get paid for that one act every month?  This is the heartbeat of residual income. 

Insurance agents, musicians, actors and authors understand residual income. 

• An insurance agent writes a policy once, but gets paid a portion of the customer’s payment each time it is submitted.

• A musician records a song once, but gets paid each time the song is purchased. 

• An actor makes a TV show or movie once, but gets paid each time it is shown on TV or sold on DVD. 

• An author writes a book once, but gets paid for each copy sold. 

Residual income is a beautiful thing 

• What can the average person do to develop a personal residual income? 

• How can they earn what some people call ‘mailbox’ money every month?

• How can energy deregulation provide a residual income?

A unique opportunity is available to the average person now through the deregulation of energy.  Over the last decade, several states have passed legislation that deregulates the generation portion of electric and natural gas services. 

This means that people in deregulated states:

• have a choice in who supplies their actual electric or natural gas. 

• have the security of knowing that the monopoly company still distributes their energy and provides service when there is an outage.

• can now shop for lower rates from companies free to compete against the monopoly for the generation of that energy. 

I have personally witnessed the benefits of this new competition as our electric bill was over $100 less the first month that I changed to Stream Energy.  It was free and easy to switch, and there was no risk.  What a great deal!

What’s Unique about Stream Energy

Not only did Stream Energy cost less than our monopoly electric company, but it provided me with an amazing business opportunity to generate a residual income.  For a really small fee, I joined their marketing division as an Ignite Associate. 

Immediately, I became a business owner with two great websites designed and maintained by Ignite.  These two sites enable me to gather a few customers (20 customers is the most I will ever need to have) and to build a team of business associates who are looking to build a residual income as well. 

While Ignite pays great Immediate Income through bonuses and amazing Leadership Income for each new Associate that joins my team, the potential Residual Income is astounding.  As my personal Ignite business grows, each Associate is gathering their 10 to 20 customers and adding associates to their team who gather their customers. 

I get paid and little portion of each of those bills.  There is the potential to get paid on thousands of electric bills every month for only personally helping 20 people at the most save money on their energy bills by becoming Stream Energy customers. 

If this idea intrigues you, watch the videos on my website by clicking on the lower left picture called Defining Moments.  Write down your questions and contact me, and we’ll see if Ignite is the business that will generate a Residual Income for you that can change your life!