The $300 Solution: How to Overcome MLM Attrition
The $300 Solution: How to Overcome MLM Attrition
The $300 Solution, by Randolph A. Byrd
How To Create Successful Leaders By Creating Achievable Milestones(This article is over 20 years old – but the solid truth is unchanged and just as applicable today!)
This article was reprinted on Dale Calvert’s website: www.TopMLMTrainingArticles.com, which also contains other articles by top networkers including Mark Yarnell, Len Clements, John Milton Fogg, and others. 24 timeless articles in all! See Dale’s comments following this article (and follow the various links to evaluate the training programs he offers.)
My comments are noted (in bold) within this reprint as well…
SUMMARY: The key to having distributors stay in your organization is to get them to the benchmark of a $300 commission check as quickly as possible – ideally within three to six months. Your training, goal setting, and business building strategies should be focused on that first all-important mile-stone.
“I know that in Network Marketing, ‘the only way to fail is to quit.’ But I’m having trouble convincing people in my Network about that. How do I get them to stay involved long enough to start seeing some success?”
This is one of those truly great “Great Questions” that comes up again and again, and there are lots of great ways to answer it:
• Making sure your people are motivated by helping them stay clear on what their own personal goals are . . .
• Making sure they have the tools they need and know how to use them . . .
• Making sure their efforts are supported by 3-way calls and meetings until they’ve got their “sea-legs” securely under them…
ALL of these are sound approaches. But there’s another answer – one that’s perhaps more basic and essential.
Let’s take a nuts-n-bolts, run-the-numbers, practical look at the conditions you’ve got to create for your people to get involved and stay involved.
There are two things which prevent most Networkers from achieving success:
1. They don’t make $300 per month quickly enough, and
2. Their downline doesn’t either!
Surprised? You’re not alone.
But the truth is that $300 is the income-earning threshold below which there is no Network Sales Organization! Why? Because there are simply no Networkers to form an organization!
People who make $300 a month in this business stick around. People who don’t – don’t.
It’s that simple.
Networking Enemy #1 – Attrition
No one in this profession likes to talk about attrition. Why Not? Because it undermines the profession’s primary positive benefit that we recite in our prospecting routines.
You know the rap: “You sponsor 10 people, and they sponsor 10 people, and they…and pretty soon…”
Now, how successful would you be as a prospector if you said instead: “You sponsor 10 people, and then 9 drop out, and then the one who’s left sponsors 10 people, and nine of THEM will drop out, and then…”
Doesn’t sound like much of a positive pitch, now, does it? But it is the truth – or at least, it has been for most Networkers.
Statistically, attrition rates in Network Marketing average about 80 to 90% per year. That means 8 or 9 out of every 10 distributors drop out of their organizations (and most out of networking altogether) within a year or less of signing up.
Factually, that’s no different than mainstream business start-ups, where 8 or 9 out of 10 fail within the first year!
But what really hurts is that 80 to 90% of your efforts are lost . . . before they’ve had the chance to be successful. As Dayle Maloney says, “The problem with most Network Marketers is that they quit before payday.”
But what causes this drop-out rate? And what can be done about it?
Ask open-ended questions like that and you’re bound to get long, equally open-ended answers. CEOs and distributors alike have given us all sorts of philosophies on why distributors leave our profession.
But to find the truth, let’s rephrase the question: at what point do Networkers NOT drop out of their organization?
Specifically, how many dollars per month in compensation does an MLMer have to earn before a high percentage do NOT drop out? Just about all we spoke with answered, “$300 to $400 a month, sustained for at least 2 or 3 months.”
And “by when” do they have to make that amount? 6 to 9 months is best, with 1 year being the longest time allotted. And if they don’t? They leave the organization at a rate of 80 to 90% per year.
Randy’s note: 6 to 9 months is probably too long in the current market and economy. People have too short an attention span, especially with “new, shiny objects” in the form of MLM’s being pitched at them on a weekly basis. I would recommend achieving the $300 per month goal in 2 to 3 months – if not the FIRST month! With the program I have recommended this is very reasonable – and even part of the “Your 30 Day Success Plan” training!
In addition, our team in ViSalus has a REAL program (and Team support) to achieve $1,500 to $2,000 per month, AND a FREE BMW within 90-days!!!
And if they do achieve $300 a month? They stay on board and usually become even more successful.
So why don’t most Networkers ever get to the $300 per month level?
• Poor prospecting and sponsoring,
• Lack of knowledge about this industry and how Network Marketing really works,
• Unrealistic expectations.
The common “pie in the sky, get rich quick” approach can set up your new distributor for failure almost immediately, because the truth is that 98% of all Networkers DO NOT EVER reach those soaring heights of success – and certainly not within just a year.
This creates a “lottery” mentality that in turn creates delusional dreams about what this business has to offer . . . and then dashes them.
Randy’s note: any networker that recruits new distributors with a “get rich quick” promise not only destroys his or her personal credibility, but damages the image of the entire network marketing industry. Experienced and hyper-successful networker, Jordan Adler, has a different motto: Get Rich Quick, the Slow Way!
In other words, be up front and recruit on the honest projection that the new networker will NOT get rich in only a few months. In reality, building a network, or an organization of fellow new networkers, will be a relatively slow process that will likely show only small gains for 6 to 12 months! But, unfortunately, most MLMers quit before this! Or, as stated above, “The problem with most Network Marketers is that they quit before payday.”
So lay out a conservative plan to earn $300 in the first 30 to 90 days. Don’t promise a “pay day” other than this without a 6-month commitment, including assignments and checkpoints along the way!
We have a common misconception in this business that $300 is such small potatoes, it’s not even worth mentioning. There’s the wonderful story about a man who went into the business with the goal of making $300 a month. Not $10,000 or $20,000. Just make $300 a month.
The man achieved that goal fairly easily and stayed at that $300 income level for a number of years. He didn’t seem very ambitious – so he was asked about this. As it turned out, the man had taken his initial $300 and accelerated the mortgage payment on his home, paying it off in record time. He then used his free-n-clear equity to buy a second property, rented it out, and applied the “extra” $300 in the same manner he had with his own house. In less than 5 years, he ended up owning 5 income properties and was virtually financially set for the rest of his life. All by virtue of the $300 a month he had earned in Networking.
Enter the $300 Solution:
• What would happen if you told your downline (or yourself) that the first step to MLM success is to get to that $300 a month level within 6 to 9 months – or even a year?
• What would happen to their expectations now?
• What would happen if you told them the real truth about this business: when a distributor reaches a monthly compensation of $300 per month he/she will not drop out! This is a point of no return!
When they get to that $300 level, you and/or your group MUST recognize and acknowledge their level of achievement. After all, in this recognition business, $300 a month is a “rite of passage.” Call it a coming of age and celebrate it like a birthday. This sets up a great expectation for your entire group.
Imagine for a moment that you told your downline that the amount necessary to achieve the no-going-back level was $2,000 instead of the real $300 level? The $300 milestone would go by unnoticed, as their expectation is $2000 for the first level of real success. But share the $300 Solution with them and make a public celebration out of every distributor achieving this level and they will not drop out, because they have learned to expect that distributors earning $300 monthly do not quit.
Once they learn the truth about this business, they will operate within that truth! It will become the law of nature in Network Marketing Sales.
Note also the difference in their attitude when they achieve only $150 per month.
Within the old paradigm of “getting rich”, $150 would have left them feeling like (and therefore being!) a failure. Now, when they reach $150, they’ll say, “I’m half-way home!” What a difference!
So, how do we get to that magical $300 per month benchmark? You and your downline are half-way there already, because you are now armed with the knowledge of the $300 Solution!
If you want more of your people to stick with it – and with you, too – inject the $300 Solution into your teaching and training routine. Don’t be afraid of scaring off those “heavy hitters”. Those folks will quickly see the virtue of a system that has hundreds and hundreds of part-time Networkers all earning enough to STAY IN BUSINESS.
Dale Calvert’s Comments on the “$300 Solution” Article:
About a month ago I was having a conversation with a gentleman who is a Top 10 money earner with a two-level pay plan. He was frustrated, his group was stagnant and he was trying to figure out why.
The conversation went something like this. “How many people does a distributor have to sponsor in your company in order to make $300 a month?”
My response was zero. Zero, how could it be Zero? They have to sponsor at least one if they are going to make any money!
No, Zero. That is impossible! Is it? He thought for a minute and then he said, “Well I hope you aren’t talking about retailing the product because I hate to retail!
I wanted to SCREAM YOU AREN’T THE ISSUE!! Successful people are willing to do for a short period of time what most people aren’t so they can do for the rest of their life what most people can’t!
The reason most people don’t like to retail is because their company offers fabulous high quality products that everybody needs, but that nobody wants! That statement changed my life! My entire MLM/Direct Sales career I had products and services that everyone needed, but nobody wanted.
It is very common for distributors who have never sold a thing in their life to enter our business and put $100, $300, $500 or more in their pocket their first week, just retailing the product.
I just got a message today from a couple in Alabama who sold 17 cases of product, over 200 bottles their first month in the program. That type of sales is not common, but it happens for a few new distributors in our organization every month. They have earned well over $2,300 in retail profits their first month in the business!
There are always going to be people who enter a MLM program expecting the marketing plan, the product, or the company to make them rich. They have a lottery mentality. They sign up, and then never get up off the couch.
However, there are a lot of hard working dedicated distributors in this industry who are frustrated simply because their company offers them no TRUE RETAIL opportunity.
Randy’s note: the issue of a product that is WORTHY of being retailed is CRUCIAL in choosing your network marketing company! You need to ask yourself – honestly – would I use this product IF NOT for the income opportunity? If the answer is NO – you need to find another company!
The BEST distributors for any company are the biggest evangelists for the products and services!
While it is true that many (if not most) distributors are content to have access to the products at wholesale prices, the most successful distributors are ALSO customers FIRST!
This fact is why the ViSalus 90-Day Challenge is built upon retail customers! In addition, any customer that refers three others receives their product for FREE! Can you say ZERO attrition?!!
You may not want a retail opportunity, you may not need a retail opportunity, but believe me, the masses in your organization will!
Why are we so strong on retailing? Because it solves the $300 Solution. Besides, we don’t teach our people to retail, just for the profits. We teach a very systematic, step by step method for retailing to recruit! Approximately 80% of the people who join our company each month are satisfied retail customers first! Wow! Imagine what that does for our retention!
A recent publication by the Direct Selling Association stated that 90% of the people who join a network marketing company do so because they love the products!
Randy’s note: consider this natural progression…
1. A retail customer becomes a fan of the products.
2. The customer naturally tells others, some of whom also become customers.
3. The sponsor of the customer points out that they could be earning commissions IF they were also a distributor! In addition, as a distributor they would also earn commissions on the retail purchases resulting from the referrals of their customers.
4. IF and WHEN any of these “downline” customers also become distributors, they will continue to earn commissions, to INFINITY!
A very important question: how can you find people who love the products, when you aren’t selling any of them? Wow! Downplaying “internal consumption” is a mistake by the well-intentioned “experts” who don’t know any better, and have no clue as to what you and I want and need.
Randy’s note: as mentioned at the beginning of this article, some truths are timeless. The network marketing industry, which includes over 2,000 companies distributing over $30 BILLION per year in goods and services in the U.S. alone, can be summarized as millions of independent volunteers who use and recommend the products, and find lots of others to do the same. In other words, it’s a lot of people doing a little bit each.
While there are many examples of networking “mega stars” that are displayed as examples of what is possible, the reality is that most MLMers are quite content to earn a car or house payment each month.
It is also true that in MOST MLM companies, a few “super stars” are always featured. But in ViSalus, one Promoter receives their FREE BMW every hour! Literally hundreds per month!!!
It all starts with the belief that bigger things are possible. You are literally one person away from a breakout explosion of your downline. And that person can be many levels removed from your personal recruiting. But first, you need to stay “until pay day!” You need to make that first $300, and help everyone you recruit do the same.
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