Good afternoon! Today, I’m going to make a lot of people angry.
I need you to understand that it is not my intent or focus to upset anyone. My intent and focus, my mission, is to educate and help people understand how the network marketing industry works. And to do that, I realize that some people might take offense or be upset by what I say. If you are one of those people, I apologize in advance. I am not anti-MLM or anti-network marketing. In fact, I think that network marketing and MLM is probably the best place on the planet for the “little guy” to get started with a few hundred bucks, and turn that into a huge residual income.
Unfortunately, network marketing and MLM both have sketchy reputations. Personally, I am anti-B.S., and I want to take a few moments to look at one of the most misunderstood pieces of this puzzle.
Today I want to look at the “company event” or “company conference”. You have heard of them (or been to them): it’s a huge MEGA-EVENT in which some key speakers get on stage and tell their “million dollar story”, the CEO or president might get on stage and talk about what an amazing company they have, what an amazing product line, ad nauseam. Typically, companies will also launch a new product or product line at the event. The distributors will usually pay several hundred or several thousand dollars to attend the event, plus travel, accommodations, etc..
What’s up with these things? What purpose do they serve?
First consider this: most of us are creatures of habit. If you doubt this, go look in your refrigerator. The types of food you see in there today will probably be the same types of food that will be in there 3 weeks from now. We buy out of habit.
As a business, I have to know that the absolute best, most responsive customer I could ever have is a customer that has habitually bought from me before. The group of these buyers, as a whole, can be called my “client base”. My client base has already demonstrated that they will buy my products. They have also demonstrated that they are willing to keep buying my products.
An MLM or network marketing company is no different. They have a client base. They call these clients “distributors”. These distributors have demonstrated the propensity to purchase a particular type of product. Usually, they are buying it monthly on “autoship”. So if I’m a company, and I’m looking to generate more revenue, how can I do that?
Well, one option is to have a mega-event. An MLM or network marketing company can advertise this “rah-rah” meeting as an annual (or semi-annual) mega-event, training conference, whatever. The company can fill an auditorium with current clients (distributors), and then bring in key speakers that talk about how much money they can make with this company, how great the product is, how fantastic the opportunity is, etc. They charge each distributor a premium price (usually several hundreds thousands of dollars) and at the same time, qualify the distributor as being both a “buyer” and as having enough money to buy additional products.
Once everyone gets in the auditorium, and everyone gets real excited, the company can then launch a new product or product line, and literally guarantee that the launch will be successful. Because the company qualified everyone as both a “buyer” and as having enough money to buy, the new product launch is an absolute success. The company generates revenue. The distributor spends money.
This is the same principle that every other retail business uses. Think about it: have you ever bought anything online, and then continued to receive emails or “junk mail” from that company with additional offers and specials? That company understands that you have bought from them before. And you will probably buy from them again. So they continue to send special offers.
Again, I’m not saying that networking companies are bad, or that MLM companies are trying to exploit their distributors. I am saying that network marketing and multi-level marketing is about business. To make a ton of money in this industry is downright easy if you understand how the numbers work. But the flip-side of that coin is if a distributor doesn’t understand the numbers, they will probably be making a lot of financial donations to their company.
Of course, these “rah-rah” meetings are not completely useless to distributors. Most distributors will certainly come away from that event being very motivated. And motivation is a very important thing. But motivation without the right tools usually spells disaster.
Think of it like this: If I’m REALLY motivated to change the oil in my car, but the only tools I have are a fork and a steak knife, I’m going to have a very difficult time getting the job done. Motivation has very little to do with my inability to change the oil, I could want to get that oil changed more than anything I’ve ever wanted; it really comes down to having the right tools, and the knowledge to use those tools effectively. That’s the bottom line.
If you are a distributor, then you need to know what you are doing. If you spend two grand on an event, I at least hope you get more out that thing than some extra product. Invest in your knowledge, invest in your skill set, and watch you business grow.
I, Joshua Fuson, accept full responsibility for these words. If you have any questions regarding this material, you can contact me directly at my home office at 641-856-7555. Copyright 2006 Fuson Enterprises.