In the fall of 2005 I made a decision that would prove to teach me many things. My good friend had called and said he wanted to show me something. Naturally, I was curious, and since we had been good friends for over 20 years, my decision to hear what he had to say was an easy one. Had he been a complete stranger, my reluctance meter might have created a very different outcome.
And so we met. He made the trip to my place, about 2.5 hours from the hometown where we both grew up, and where he currently resides today. Knowing that I had a background in Health, and was very interested in learning about new products and services that can help people realize more of their potential, my friend placed a bottle on the table; it was a nutritional product.
He had been using the product for a few months, and after looking into the business model and company history, had enrolled in the company as a Marketing Executive. He proceeded to show me his website, and discussed the compensation plan and the various ways in which a person can earn money. I was intrigued. I told him I would try the product, and if it helped me with some digestive issues I was having, I would consider the business. He thought that sounded fair. He gave me a bottle to try ($45 for a one liter bottle), and said the next one would be on me. I agreed.
Onwards and Forwards
Fast forward two months. I had finished the bottle my friend had given me, and I was signed up as a Marketing Executive. I had my very own home-based business. Very exciting. The thought of working for myself, among a team of like-minded individuals, was very appealing. And since I would have existing team members in various countries, at virtually any time of the day or night I could have my questions answered.
My intention was to be working my business full scale in a year’s time. And by all accounts, my team members assured me that this was a very realistic goal. Being new to the world of Network Marketing (NM), I had no reference point for discerning whether what they were telling me was true. And so it goes when trying something for the first time.
In less than a month, I had earned my first cheque. Now, let me qualify this. Since I had been encouraged to order some product upon enrollment (which is reasonable considering I had just started a business and would need product on hand in order to educate potential customers), the earnings on my first cheque were from product rebates from each case I ordered.
I had sold a few bottles, but most of the first $500 I spent on product was gifted to others through efforts to raise product awareness. Not entirely a smart way to do business, but as an amateur in the field, it seemed like this was a common way of doing business for some.
And, from those 12 or so bottles I had given away, some of those prospects went on to become customers (some for a few months, a few others for several months), and a handful went on to become Marketing Executives (again, some for a few months, and others for a year or so).
The people to whom I had gifted product were predominantly family and friends. This is referred to as a ‘warm market’, people who I know and trust, and who trust me. They are the first step in prospecting for potential customers and business owners. Since they trust me, they are more likely to be open to hear what I have to say.
As a result, the probability that I can persuade them of the merits of my cause rises exponentially. Contrast this with finding, approaching, and persuading a complete stranger – in the beginning, family and friends are simply the quickest, shortest, and more reliable route. All in all, my first few months within the world of NM, was, by most accounts, a success. And I continued to be successful for the next year or so. In my tenth month, I earned my largest cheque – $1800.00. My residual income was around $600. Not bad for a first timer.
Let’s fast forward again…3 years.
Today, I am no longer doing network marketing. My total career spanned approximately 14 months. Due to various changes within my life and business, it is no longer part of my focus. But along the way, I gained some extremely invaluable insight into the ways and means of the industry.
What follows is designed to assist anyone who might be considering this business, or those who are in the business already to clarify their intentions and ensure you don’t lose yourself, and your pocketbook, in the pursuit of your dreams.
The Larger Landscape
NM is an incredibly alluring concept. In theory, it seems too good to be true. And for some, (it is reported that less than 1% ever make any money in NM – some reports indicate around 10%), the sky can be the limit. NM is like being part of a large cohesive team that experiences ups and downs akin to the stock market.
Within a few months, you can go from making a few dollars to several thousand, depending of course, upon the overall momentum of the team and how much effort you put in. Or, if you are well connected, and have a significant number of people within your social/business network already, your earnings can skyrocket very quickly.
When this happens, the adrenaline rush can be addicting. And I would suggest that the emotional high one experiences from these spikes has many folks locked into a cycle of emotional addiction that runs deeper than sheer excitement.
It seems to me that, for many, NM is like a drug that can’t be put down. The excitement that is first felt, upon generating some earnings, causes one to believe that this thing called NM can actually work. And it does…for about 1% or so of the total number ever involved.
The Next Big Thing
As is customary within the industry, when one company falls short in furthering one’s financial goals, many people jump ship, finding the next trend and starting over. But it isn’t entirely like starting over; once a large team is established, often the leader brings his group (downline) over to the next company. And when everyone begins ordering product to start their new venture, momentum is created, and those leaders in the right spot experience a spike in earnings. Intoxicating it is.
Out of the network marketers that I know, many of whom have been in the industry mainly part-time for a decade or more, they have been involved with 4-5 companies or more. It seems that when one gravy train dries up, they move on, like a herd of buffalo seeking new territory.
And while changes in life do happen, and some companies make decisions that conflict with one’s integrity, too often network marketers move on thinking that the next company is the right one. But if honesty is to prevail, many have been saying that to themselves, and trumpeting that to their prospects and friends and family, since enrolling with company #1.
While no one can be faulted for needing to clarify their values and move on, or denied the freedom to make choices that they see as right and appropriate, when one continues to make ongoing company changes while recycling the same lines used during previous ventures, something begins to happen…that individual begins to lose credibility with those around them. Was the last company the ‘real one’ or this new company ‘the next big thing’? Did the last company have the ‘best comp plan in the industry’ or does this latest organization? When all and more is being said over and over, the meaning of those words becomes saturated, old, tired.
But as long as the herd is telling it to themselves, and group consciousness continues to reinforce the group ‘truth’, then the herd can roam from territory to territory, decade after decade, chasing the illusive payout, and all the while coming to identify so tightly with the group that they lose themselves in the process.
After a while, they come to know not what they are striving for, nor do they continue to ask themselves. They just know that others are still carrying on, and that is enough for them – it is what they know, have come to love, and can’t let go.
But after 10 years or more of pursuing an idea, in any arena of life, you have to ask yourself if the return has been worth the investment. The path of the NM is one of emotional intensity. And that is hard to let go of. When I left my company, I felt a large void. Where else can you connect with people on a part-time basis who are so like-minded, pursuing the same hopes and dreams, so supportive, full of energy? It was very rewarding on a psycho-emotional level.
While I have found that experience since with my career, the initial loss was devastating. It was like leaving a relationship – there was a grieving period, followed by acceptance, a letting go, followed by renewal. But it seems many are afraid or not willing to let go, even though the writing is on the wall, and may have been for some time:
• Husbands still telling their wives that this one is ‘the one’, all the while investing $200-$300 in product and materials every month, even though their budget should not allow for such things. “Eventually, this will pay off honey. It is investing in the short term for a payout in the long term.”
‘Keep believing in me’ and ‘I can’t accept that this hasn’t worked out the way I intended’ is the essence of this perspective.
• Wives still justifying to their husbands that their business must go on because ‘I have been home with the kids all day’.
The essence of this perspective is ‘You owe me’, all the while running around to business meetings, telling one’s self that progress is being made, when in reality, very little true business success is taking place. In psychiatric circles this is called ‘the illusion of work’.
• Individuals telling themselves that they will never leave the world of NM because of how it makes them feel, not allowing themselves to see that their initial plans have shifted into the realm of illusion, and that what they think they are doing is not really happening, and hasn’t been for some time.
The essence of this perspective is ‘My dreams are too important. I will never give up’. But at some point you must begin to get painfully honest about why you are doing what you are doing, and if the results of that doing is worth the effort to keep doing.
Many a family and relationship have been strained, even ruined, because of the pursuit of the warm market. The challenge with the warm market is, once you use up all the customary sales lines, which might be true to varying degrees, during your run with the first company, lines like…
• ‘best comp plan in the industry’
• ‘a product like nothing else’
• ‘the right leadership’
• ‘proven track record’
• ‘a science driven product line’
• ‘a literal cash cow’
• ‘people are making $30,000 and up, per month’
• ‘you don’t have to sell, just share’
…you can’t very well use those lines with the same people (family, friends, and associates) the second, third, and fourth time around. Eventually, you just sound silly. And if they did join you during the first venture, they will come to see for themselves that real business development requires sales, marketing, budgeting, planning, and strategic thinking. The ‘just sharing’ notion will work for the first few months or so, but after that, all of the above are required.
Free Entry or Market Saturation
I remember when our big product first launched, myself and a handful of other reps, whom I didn’t know, had approached many of the same establishments within our region. Soon, many of these businesses had become over-exposed; they refused to engage us. This is one of the drawbacks of the NM model – where anyone can become a rep, and there is no limit to the number of reps within a territory. The up side is that there are no barriers to access – anyone who is motivated can take action and get ahead of their competition. All are welcome to try their hand at this illusive and challenging business called NM.
But even though you might be part of the larger organization, teams within the company are competing with each other. And while it might be said that you are family, and to a large degree this atmosphere can be created and felt at conventions, when it comes to prospecting a territory, if your co-reps are not in your upline or downline, they are competition.
Is this model sustainable? It seems that the more reps you add to a given territory, the less and less become the number of prospects. A saturation point is reached and eventually everyone has heard about this latest product, sometimes to the point where now they don’t want to hear another thing about it. There is something to be said for limiting the number of reps who can then explore a given territory over time. This might create more gradual, sustainable growth.
But this approach might not lead to the huge spikes in income that occur with the current model…rapid cash, fast! There is that emotional high again…feels so good. Like watching your stock go up in value, but instead of watching by as a passive observer, with NM, you can directly influence the outcome. Compelling indeed.
Borrowing from the Future
For some, network marketing has earned them a literal fortune. And to those few, I say congratulations, sincerely. My hopes and dreams when I first started rested upon a plan that would eventually see me earning huge chunks of money each month. It didn’t happen, not because it can’t happen, but because my priorities shifted. My life had indicated to me that it was time to pause, step back, reflect, re-calibrate.
For the most part I had a very positive experience with NM. I met a lot of great people, some of whom I still connect with on occasion. And the magic that I felt during that first year was palpable. That energy has continued to sustain me in many ways since that time. I still check in to see how the company is doing today. I have many great memories that are mine to keep.
And, the tax benefits of having a home-based business are excellent. For this reason alone, it might be wise to look into some form of home-based business that doesn’t cost you too much to operate each month. But make sure you aren’t spending/investing more than you can afford to invest.
I made the foolish mistake of borrowing from the future – meaning, I expected that I would be earning a lot of money in the future, so I justified all my expenses as necessary costs in running a business. This turned out to be a costly mistake. Add to that, most companies encourage you to attend their training events. I went to Dallas, Orlando, and Las Vegas, all wonderful trips, but the reality was, I was borrowing from the future to finance the present. And it backfired.
While attending trainings is very important, and it helps you to understand, catch and live the vision of the company and its owners, if you don’t have the money, don’t dig yourself into a hole that you will be digging yourself out of a year from now. The tricky part is…you have this entire team playing the hype card.
And this energy gets in you, and fuels you, and the next thing you know you are at a convention buying 5 – $200 tickets for the next convention because you just know your team is going to grow, and you don’t want them to miss out on the experience. Hogwash. Know yourself, and don’t get caught up in this energy unless you have the cash to do so.
The Real Cash Cow
In December 2009, I was introduced to a woman who was prospecting a friend of mine for her NM business. Since I had no intentions of considering her business, I sat patiently while she did her sales presentation; we were in a coffee shop. At one point she turned to me and said,
“Are you considering the business?”
I very politely but directly stated, “No, I’m not interested.”
To which she replied, “Oh, you should be. This opportunity is a literal cash cow. There is so much money to be made.”
I felt nauseous. I had used all these lines before. It felt almost as if I was being conned, and I had to ask myself in a quieter moment, “Did I really say that kind of stuff to people?”
The answer is “Yes”.
Live and learn as they say. You go with what you know at the time, and when you know better, hopefully you do better. This woman’s approach cemented for me why I was not interested in her business, but more than that, why I was not interested in her as a person. To be sure, she’s entitled to learn and grow just like everyone else. I can’t fault her, because I myself was there once. I recently heard from our mutual friend that she has since left that company and moved on to a new one. And from there, she has since moved on to her third company.
I have come to understand something; the real cash cow as it relates to NM, save the less than 1% who ever make it big, has to do with the company itself. The reality for over 90% of people who start a business with a NM company is that they really exist over time as glorified customers, acting as business owners. This is great for the company; either way, they are moving product and increasing their bottom line.
The more a company can entice people to dream big, get in on the opportunity, and make a lot of money, the more money the company makes through product sales when a new business owner makes their first order. And most companies require business owners to sign up for an auto-ship every month, so the company continues to make a good chunk of money from every business owner for as long as they operate their business.
For many people, this is justifiable because they purchase these types of products on a monthly basis anyway, so why not order them from your own business? Makes sense for sure. But for all the people that lose in NM, the company consistently wins. And that’s okay. The owners chose to get into the business because they are smart and know that NM can generate large sums of money quickly. And some even have good values and love to help others, like the one I was involved with.
• Know yourself.
Stop following the herd just because it feels good and it’s nice to be accepted by a group of people with whom you identify. If your finances are suffering, or if you have been at it for a long time with no sustained results, face reality and move on. Find a new hobby, or join a social club. It might be cheaper.
Perhaps you are blocking the expression of your true potential because you won’t let go of this ‘idea’ masquerading as a business. For some, it functions as a real business – figure out which one it is for you…today.
• Know yourself.
Just before you move on to your next company, ask yourself: What I am really doing here? Why I am making this decision? Is this truly going to bring me what I think it’s going to bring me? And what is that exactly? Am I afraid to let go, to distance myself from all the hype and energy, and really figure out who I am? Again, the energy is enticing, even addicting. Figure out if you are addicted to this entity called NM and decide if that is okay with you. If it’s not, figure out how to let go.
• Know yourself.
Stop recycling the same old lines. You are beginning to look silly. People have caught on, and you are bigger than this. You deserve more. Pull back, re-connect from a more authentic place, and stay real. The hype is tainting your credibility and possibly your mental health.
• Know yourself.
Ask hard questions. Don’t accept the customary lingo and approach just because your leader is telling you it works. If it doesn’t jive with the values and ethics you walked in with, it might be time to walk out. Don’t sell your soul for a pay cheque.
• Know yourself.
Consider how approaching your family and friends might make things awkward in the future if business goes sour. Rethink the warm market approach, and consider selling to strangers. Then if things don’t work out, you still have your family and friends intact.
• Know yourself.
Don’t give up on your dreams, but get better at discerning if they are materializing or if you are just chasing an illusion that you propped up long ago and are afraid to let go of.
• Know yourself.
Have fun, don’t take yourself too seriously, and don’t let business come between friendships. This is The Way of the Fool.
The reality is, sometimes our dreams need time to breathe. If we never step back, pause, reflect, take a break, peel away for a while, but continue pursuing our plans relentlessly, we never gain the added value of knowing whether the dreams we are pursuing want to pursue us.
Maybe they have moved on.
Maybe we have been facing in the same direction for so long that we falsely conclude ‘this’ is what will make us happy.
Maybe we have become wired to the adrenaline rush, and more than anything else, that is what we are still pursuing but haven’t yet caught on.
Do your dreams and yourself a favour; slow down. In your ongoing attempt to keep the dream alive, you might be missing out on some key indicators that are signaling you down a different path…a better path.