The Real Problem with Network Marketing and Multi-Level Marketing (MLM)

It never ceases to amaze me the extreme polar views on the topic of network marketing and MLM. Some people are passionate about it in the extreme, and there are even top celebrity authors like Robert Allen, Mark Victor Hansen, and Robert Kiyosaki doing it and advocating it. Yet, in many circles, you might as well declare yourself a leper as admit to being in network marketing.
So, what is the problem with MLM and network marketing?
Maybe it's the pyramid structure? But you can't really take issue with the tiered compensation structure—almost every large sales organization in the world has that. Salespeople get commission, and sales managers get overrides or bonuses on top of that, and sales directors on top of that, and VPs on top of that.
Or maybe it's the fact that you have to pay to participate in it? But that can't be it—that's a standard franchising model. And I assure you, the franchise fee of most traditional franchises dwarf the sign-up cost of any MLM program by comparison.
Now certainly, there are illegal pyramid, or "Ponzi", schemes. This is where the money is all being made off of signing up other people, with little or no real product ever being delivered. But in spite of whatever perceptions people may have, the fact is that Amway, Excel, Meleleuca, PrePaid Legal, USANA, and many others have sold millions upon millions of dollars of products to happy customers, many of whom are NOT also reps. So, there may be a perception problem here, but if so, the perception is out of line with the reality.
But surely the bad reputation MLM'ers has some more basis in fact than the occasional illegal pyramid scheme?
The real problem with MLM is not MLM itself, but some of the people it attracts. Network marketing is just a business model, and it really amounts to "micro-franchising". Its upside is that it has a very low cost of entry, with the potential for exceptional revenue, and there are those who achieve that.
But those same things that make it attractive make it attractive to many who are NOT really qualified or prepared to become business owners. The salient characteristics of MLM make it attractive to people who:

• have not done well in their business or profession and have little money saved up to invest
• have no previous experience owning or running a business
• have no previous experience in sales
• have little or no experience developing business relationships other than that of employer/employee/co-worker
• are not satisfied with their current level of income
• have unrealistic expectations of the amount of work involved compared to the revenue realized

Don't get me wrong—I'm not saying that there's anything wrong with any of these things, or that this describes even a majority of network marketers—only that it describes a disproportionate number of network marketers, and that many of them never do anything about it.
As a result, many network marketers end up:

• over-selling the opportunity
• inappropriately discussing business in social situations
• coming across as desperate
• over-focused on new recruits and neglecting existing customers as a result
• being either inaccurate or deceptive when talking about their business

Again, I'm certainly not saying that this describes a majority of network marketers, but it does describe enough of them to tarnish the reputation of the rest. To pre-judge someone based on the basis of a small minority of people in that group is horribly unfair, but we must realize that most prejudices have some basis in reality, even if it has been distorted.
So what's the solution?
There's a first time for everything. And network marketing/MLM is a great opportunity for people to have their first business, their first sales role, etc. My point is this—recognize it for what it is: it's a business, and you are a business owner. And if you've never owned a business before, if you've never done sales before, if you've never networked before, you need to learn about how to do so, not just from the network marketing/MLM experts, but from established experts in those fields.
Network marketers who are serious about building a business should be reading and learning about business fundamentals, the latest sales and marketing techniques, strategies for networking and business development, etc., not just swapping tips at your team's weekly or monthly meeting. Act like a small business owner, and people will treat you like one.

Five Simple Steps to Convert Prospects to Clients

“The no-sell sale”:
Recently, I read an article that impressed me. Written by Katherine Vessenes, a lawyer and well known consultant to successful advisors, she has given permission to reproduce her article. To see more about her work or to sign up for her newsletter, go to www.vestmentadvisors.com.

By Katharine Vessenes:

When I first starting working with multi-million-dollar advisors, I was astonished to learn their closing ratio was a whopping 80 percent to 95 percent. Then, to test out my theories, I started working directly with investors myself; not that I wanted to work with investors. The reason? My closing rate had been about one-in-three prior to this.
So, you can understand my surprise when I found that by using this system, my own closing ratio was more than 90 percent. That’s why I call this powerful process the “No-Sell Sale”. I mean, if I, a pretty lousy salesperson, could do it, anyone can.
This sales process is not about selling at all; it’s about identifying prospective client’s areas of concern and then solving their problems. There is no hard selling. It’s the process of figuring out what your prospective client really wants and needs — and then giving it to them.
It’s incredibly easy to close more business if you have the right dominos and they are properly positioned. Here are some of the dominos, which, when properly aligned, can help you create your own No-Sell Sale:
1. Set every appointment up for the wow experience.
Remember that it’s important for every existing and prospective client to face your very best “Starbucks” experience”; that is, an experience so warm and powerful, prospective clients won’t be able to wait to come back and see you.
An example:
Have your receptionist memorize this script whenever you have a new prospect: “You must be the Martins. Katherine said to expect you. Also, Jim, her client service manager, said you liked diet ginger ale. If there’s anything else I can get for you, please let me know.”
Refreshments are then served on china, with crystal glasses — all of which are presented on a nice tray.
This is a far cry from a financial advisor’s office I worked with last year. All they offered me was water, and it was served in a Styrofoam cup — more of a Lake Wobegone experience than a Starbucks experience. It did not make me feel special — in fact, it had just the opposite effect — I felt like I was so unimportant to them that it was not worth their time to wash out a glass for me.
Making prospects feel special is a key part of the experience. Everyone wants to feel like they are your most important client. Taking a little extra time can pay big dividends in your relationships.
2. Let the prospect talk. Your job is to listen.
Recently, I sat in on an interview with the number-two rep of a medium-size broker/dealer. He was making about $700,000 per year and could easily double that by tightening up his sales process. His biggest problem? He talked too much. I watched him burn a full 30 minutes in chit-chat with his new prospect.
Multi-million-dollar advisors know their only inventory is time. It’s important to be efficient with that time. Although multi-million-dollar advisors are polite and do spend time getting to know their prospects, they don’t spend 30 minutes talking about themselves, the weather or swapping stories. The best way to use your time is to get prospective clients talking about themselves. This not only lets them feel important, it helps you assess how you can best solve their problems.
Ask prospective clients some key questions about themselves, such as:
* What brought you in today?
* How can I best help you?
* Tell me about how your parents treated money when you were growing up. Did they have an abundance mentality or a poverty mentality? How did that change your philosophy on money now?
* How did you get to where you are now?
* What is your investment philosophy?
* What do you want your money to do for you?
* What is the best investment you ever made and why?
* What about the worst?
* Have you ever had a successful relationship with a financial advisor? Tell me about it.
By the time you go through these questions, you will not only know a lot about your prospective client’s character, but you will also know their money personality. If the prospect is hung up on losing $500 in a bad stock choice 20 years ago, this tells you they’re very uptight, remember every bad experience and are very risk adverse. Remember: The prospect, not you, is the marketing genius. Once they tell you what they want, all you have to do is give it to them to close the sale.
3. Use an agenda.
Sometimes advisors will send out an agenda in advance of the meeting. This can be a good technique. However, to simplify my sales process, I usually had an agenda prepared at the time of the meeting. The agenda makes you look like the professional you are. It also serves as crib notes, so you don’t forget to cover all the key items.
The agenda, which I recommend you present using a flip chart or whiteboard, serves many functions. It helps prospects stay focused, as at any time during the meeting, they can look at the agenda, which is always posted, and see where we are at. It really helps reduce their fears and makes them feel more comfortable. People don’t like surprises and one way to make the process less fearful for them is to let them know, in advance, what to expect.
Once I go over the agenda with prospects at the beginning of the meeting, I also ask these two questions:
a) What do you most want to happen during our meeting today? This lets you know the uppermost thought on your prospect’s mind. If you can solve that problem, you can create another client.
b) Is there anything else you want to add to this agenda? This entire process is all about the prospective client. Asking this question lets them know they are in charge. People who feel they are in charge are more likely to agree to your recommendations.
4. Use the client’s learning style.
One of the best investments I ever made was to become Kolbe certified. Kathy Kolbe created a series of amazing tools that can be used to assess how people solve problems, approach work and make decisions. These same tools can be used to help assess how clients need information presented to them in a way that makes them feel comfortable and able to come to a decision to implement our recommendations.
Although this is a much longer discussion than we have time for, to summarize: I have learned to first approach all clients as if they are “QuickStarts,” in Kolbe speak. That means they like executive summaries and bullet points. Give them too much information and they check-out mentally because QuickStarts get bored easily. The point here is to cut to the chase quickly for this group, which represents about 20 percent of the population.
Next, I would add in the details for the “Fact finders.” This group, another 20 percent, loves background information and the depth of your research. They want to know that you have done your homework and you aren’t shooting from the hip. If you don’t give them the reasons for your recommendations, they will think you are unprepared and won’t trust you.
Thirdly, I would tie our recommendations into the client’s past, present and future. This addresses the needs of the “FollowThrus,” who are very organized by nature. I would give special attention to our process for determining what we recommend because process and procedures are important to this 20 percent of the population.
Finally, I would make sure the recommendations were put in a pretty binder with a nice cover, because this is important for the “Implementers.”
5. Involve both spouses in the conversation.
One big mistake I have seen some advisors make is to talk just to the husband and ignore the wife. They must be under the misconception that husbands make all the financial decisions.
Sometimes it’s done very subtly, like starting the conversation about the local sports team. Now, some women are big sports fans, but many are bored by this topic and will feel left out — make sure you talk about something that is important to both spouses. Both spouses must feel valued, important and appreciated.
Another misconception is that the husband is in charge of financial decisions. In fact, I have seen numerous studies that show women control more than 50 percent of all of the wealth in the U.S. today. It’s always safe to assume that both parties will be talking about you and your services on the way home from the office, so make sure you “love-up” both of them.
One way to involve the spouse is to repeat the questions for each one or rotate who you want to answer first. Here is a script for that process:
* “So tell me, Jane, what do you most want to get out of our meeting today? Bill, what about you? What do you most want to get out of the meeting?”
* “Bill, what would you say are your top three financial goals? Jane, if I asked you the same question, what would your answer be?”
So, empowering the prospect, using an agenda, loving them up, giving them a wow experience, using their learning style and involving both spouses are key dominos that need to be aligned for the No-Sell Sale. On the surface, each one of these may seem pretty inconsequential. In fact, you may be saying, “Why should we go to the trouble of baking cookies and serving juice in a crystal glass? We could save ourselves some time and a little money by skipping this domino.”
Yes, you could save yourself some time and money, but you would also reduce your closing ratio. Because it takes so much time, energy and expense to get a new prospect into your office, it is important to wow them the first time — you may not get a second chance.
Each of these dominos may not seem like much, but when you add them all up — you can get terrific results — and that means a lot more happy, satisfied clients.
Next time we will discuss five more dominos in your No-Sell Sale — how to convert more prospects into clients.
Katherine Vessenes, JD, CFP®, RFC, president of Vestment Advisors is the country’s leading consultant on the practice management strategies need to build the multimillion dollar practice (Kaplan). She is also America’s best-known authority on the legal, ethical and compliance issues facing financial advisors (Bloomberg). A popular speaker and practice management consultant, she can be reached at: 952-401-1045, Katherine@vestmentadvisors.com or www.vestmentadvisors.com.
©Katherine Vessenes 2010, all rights reserved.

 

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The Formula to Convert Prospects to Clients in Today's Marketplace

by Lisa Mininni

- Thu, Jun 10 2010

In past years, the formula to convert prospects to clients involved a lot of networking, numerous meetings with a prospect, and follow up calls with him or her. Months, even years passed between your first meeting and enrolling them as a client into your programs, products, or services.

You work hard to gain visibility and connect with qualified new business leads. Yet, most solopreneurs and small business owners spend too much time talking to people who are not their preferred clients. They waste this time because they don’t have a clear plan, they haven’t precisely identified their preferred client, and most of all, they don’t systematize their marketing or have systems that help to pre-educate and pre-qualify prospects as well as help prospects self select into their programs and services. Entrepreneurs then wonder why they don’t have more prospects converting into clients.

The present-day consumer is experienced, well informed and has a lengthy list of high expectations. Consumers are accustomed to self-service based on volumes of readily-available information. Word of mouth travels quicker than you can say world wide web.

Many entrepreneurs don’t realize the changing consumer landscape and research shows that upwards of 80% of business owners do not even know their conversion rates. How do you improve your system or site’s improvement? What do you do when you have visitors but few of them take the desired action? How do your visitors know the next step to doing business with you?

These and other questions can easily be answered if there is a regular and consistent plan that includes conversion tracking and monitoring. Conversion takes on a number of actions and can include:

•Subscribing to your newsletter or ezine

•Participating in a survey or answering questions

•Downloading a software or ebook

•Clicking on a link or page

•Going through the process (that is, clicking on certain pages) before clicking on the buy now button

•Product or Service Sales

Regardless of how long you’ve been in business, you need to know your conversion rates and, most importantly, understand how prospects find you, choose you and buy from you.

One thing hasn’t changed in the conversion process and that is building relationships and trust. There are more choices than ever for small business owners but it is vital to have a conversion plan that is consistent with your mission, values and purpose. While the internet provides leverage and business owners have more opportunities to promote their services, many entrepreneurs still struggle by using outdated marketing and selling techniques. They haven’t fully integrated or even started a social media strategy and aren’t sure how to integrate these communities so that their customers find them.

It’s incredibly easy, but can be overwhelming, with how to attract more clients. Like any outcome, you have to have the right formula that mixes well with what you want to accomplish. In an effective formula to enroll clients, you create what matters most: relationships, trust and choices. Today’s savvy entrepreneur realizes they must provide a balance of choices in their products and services and customers expect it and will choose you because of it.

When you’re clear about your market and how they find you, choose you, and buy from you, your marketing and systems become more refined and support the enrollment (or conversion) process. A well thought-out conversion plan involves:

One Part Skill + One Part System = Enrolling Clients

One Part Skill

The most effective way to turn a prospect into a client is to simply think about how you think of them and what you think of the selling process. While marketing is communicating what you do, which will generate prospects, the sales process is about enrolling prospects into clients. The key to any successful formula is to implement effective strategies that fit your values and personality. Many entrepreneurs resist the selling process which becomes an obstacle to getting clients because they are stuck in push marketing and go into sell mode.

The reason most business owners and solopreneurs feel like they are selling is because they often don’t have an effective strategy, system, and they use outdated selling techniques. Authentically enrolling prospects is about being in a place of service, building the relationship and finding what’s most important to the prospect.

Key skills include listening, recommending, understanding human behavior, and providing solutions. When you listen to your prospects, understand the human element, provide value, and suggest resources, the outcome of your generosity can be dramatic. They will no longer consider you as a sales person rather a trusted source and important person to know. After all, people will end up doing business with people they know, like and trust.

One Part System

Conversions also happen when your system is set up to leverage today’s marketplace and addresses the educated consumer. When you set up a pull marketing strategy and implement systems to support that strategy, the consumer requests the product or service not you having to push the products.

Gone are the days of static websites. A good conversion system involves:

•The use of enhanced tools. Tools including video, lead generation and other digital media to create compelling experiences for this empowered consumer.

•A good social media strategy directly targeting your preferred client. Present-day consumers are tapping into a social media platforms. Researchers estimate 70 percent of consumers read blogs on a regular basis and even more are part of a social online community. They are experiencing more video and niche content. Savvy entrepreneurs are realizing their systems must include more than just a stand-alone website to connect with preferred clients in their desired niche.

•A robust pull marketing system going beyond a static website. A website plays a much less central role in today's market place than it did in the past but is still a part of the process. A robust pull marketing system takes into consideration how people search for solutions (and how they’ll find you using them), such as advertising, search engines, social media sites and the blogsphere. With these systems you need to make sure it helps your prospects pre-educate, pre-qualify, and self-select into your programs and services.

•Automated lead generation systems. Lead generation systems (or permission-based marketing systems) help your ideal prospects find you and is often that first stage in the relationship. When they find you, your systems should help educate, provide value to them, and be clear so they know the next steps in doing business with you.

•Stay-in-touch vehicles. Since only 4% of people will want to buy from you after the first encounter with you, you must have stay-in-touch vehicles that allow you to develop the relationship with the prospect and provide high content information, fostering the trust factor.

•A specific order. Your systems must also be in an order that leads your prospects and provides value. Enough information should be given so you’re reversing the sales process. When you provide content and information on benefits, products/services and create consistency in your marketing (which creates trust over time) then your prospect is choosing to do business with you, helping reverse the sales process, leaving you free from selling. When you set up this system in a particular order it creates a system ripe for enrolling (or converting) prospects to clients.

A well-developed conversion formula includes both skill and a system that takes into consideration the entire business and provides an experience for the empowered consumer while leveraging technological advancements. Take the first step by assessing your current skills and systems to make sure you are creating an environment suitable for conversion.

__________________

Lisa Mininni is President of Excellerate Associates, home of The Entrepreneurial Edge System, the only national curriculum for entrepreneurs taking them step-by-step through a systems approach to profitability.

For a free teleseminar on getting all the clients you need, visit http://www.freebusinessplanformat.com/getalltheclientsyouneed.

For more information on how your clients find you, choose you, and buy from you, visit http://www.freebusinessplanformat.com.

What are Your Performance Management Indicators?

What are Your Performance Management Indicators?

by The Jedi Master on Friday, June 17th, 2011 | 2 Comments

(Are you reaching your mountain top?)
Why measure performance?
This is a great question. Why would you want to measure the performance of your small business? I'm going to lead the witness here to keep this conversation moving forward.
For your current performance management of your small business you probably measure some basics. Top line revenue, your expenses, labor, cost of materials, etc.
The performance management that I'm going to discuss today is focused on the growth indicators of your small business. Many consultants will talk about KPI's, which stands for Key Performance Indicators. There are so many KPI's that it can become overwhelming for a small business owner to measure all of them.
As a small business owner myself, I know one thing. If it's too difficult, it doesn't get done. I want it simple and effective.
What do you measure?
I'm going to share with the 3-Core performance management indicators that will tell you everything you need to know about growing your small business effectively.
The Key 3 are:
1. Your average sale
2. Your conversion percentage
3. Your number of new prospects
If you track these Key 3 performance management indicators, you will know everything you need to know to make sure you're on track to grow your business.
What do you look for?
In looking at the average sale of your performance management indicators I want you to think of McDonald's. Why McDonald's? Because of just one phrase they made famous. "Would you like fries with that?"
Increasing your average sale is one of your key performance management indicators of your business growth. It let's you know how many sales are needed to hit your goals, and break even for the year.
It's as simple as dividing your total sales dollars by the number of sales. Bada boom, bada bing, there you have it.
Your conversion percentage in your performance management growth will tell you the effectiveness of your conversion system. Your conversion system is the process where you take your prospects and turn them into paying clients.
An easy way to do this is to figure out when you or your people are in front of 10-prospects, how many of them buy. If for example you convert 3 out of the 10 into paying clients, your conversion percentage is 30%. If you increase your conversion percentage to 40% or 4 out of the 10, you just grew your business. And you grew if very effectively because you didn't even have to get more prospects in this case.
Your number of new prospects within your performance management indicators will help you determine if you're going to achieve your sales goals. Your business must continuously have a steady stream of new prospects, or you will eventually go out of business.
Your marketing efforts will be the major generator of new prospects into your business. You can start linking your marketing efforts to the number of new prospects for your business. This will also help you justify and understand the cost of getting a new prospect.
Your next actions
So to wrap this up with a nice little bow, here is what you can do for performance management in your small business.
1. Keep track of your average sale each month. See the formula above.
2. For every 10 prospects you talk too, track how many convert into paying clients.
3. Count the number of new prospects you see each month.
When you start tracking the Key 3 performance management indicators, you will know the health and growth of your top line revenue for your small business. When your top line sales are growing, your life becomes much easier. And the side effect for you becomes less stress and more happiness. Along with a host of other benefits.
What's the consequence of not tracking your Key 3 performance management indicators? Well…only you will know how bad that makes you feel when you're not sure where you're going, or if you will even arrive.
So start tracking your Key 3 performance management indicators to help you grow your small business effectively.

http://www.betterbusinessgrowthfaster.com/performance-management-indicators#