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[Davet]

Why is there such a large drop out rate in Networking, direct sales ?

Can anybody pinpoint some of the main reasons ? I have an idea but I would like to get some reasons from more experienced people.

Dave T. 

[Craig Mattice]

Hi Dave,

There are as many reasons as there are people who quit NWM/MLM.  Much of it comes from NOT having a business mindset and wanting to just sit back, buy the autoship, and expect to make money.  In general people don't like any type of rejection and will run from it.  Further, people are not of the interest to actually take a risk and get out of their comfort zone, thus they stay in inertia.

Much of this is the fault of the participants, I should say "some" participants, in the industry touting quick income, easy income, no selling, guaranteed "spill-over," and all of that other hype, smoke and mirror stuff.

We have to take the responsibility to not just "recruite" but to "sponsor" people with a commitment to improve their financial and personal situations.  This means working with them every step of the way.  Even then, some will, some won't, "next."

[Davet]

Right, you brought up some good reasons. Most people have a mis-conception of what MLM really is and when they get into it they are not prepared to do what they have to do. Like anything else you have to work at it.
But I'm sure there are certain things that you can do on-line to make life a little easyer. Or a lot.

DaveT.

[ElevatingYourBusiness]

Many think that they will make a mint selling the products. And or course, money is made that way, but more money is made for bring on a downline.

I sell AVON on the side -- since last year.  I have no downline yet and am just enjoy meeting other women who I wouldn't have had the opportunity to meet locally (I haven't gotten any clients locally for my main business and travel to the big city to network).  Being new to the area, it's been enjoyable just talking girl stuff.  When I get a download -- all well and good.  But at least I went into it knowing that.

I have helped many build their MLMs, and just like any other business, it start with a plan.  Most don't have them or know they need one.  Nor do they realize the time they're going to spend on their download. 

I think many just get into it for a little income -- and don't realize that... well,  it's work!

[zeitgeist]

I'll bet that 90% dropout rate is about the same as the percentage of people who buy marketing courses and don't take serious action, or diet books, or about anything else that requires work.

[Joseph Ratliff]

Also...

Most fail at MLM because of the lack of a solid marketing plan.  They instead listen to outdated marketing like "go bug your family and friends etc..." using the "warm circle of influence" as a means of marketing their business initially.

It doesn't work.

[Davet]

Come to think off it. There's a huge drop out rate in just about any industry.
When I  was selling encyclopedias there was always  a large turnover with
the sales staff. There is a large drop out rate when people get into Real Estate,
I'm sure with car sales too. Any beginning business has a large fail rate!

Ma be the direct sales industry is getting a bum rap.

Dave.T

[Chris Lockwood]

> They instead listen to outdated marketing like "go bug your family and friends etc..." using the "warm circle of influence" as a means of marketing their business initially.

Isn't that what the MLM companies tell them to do? I agree it usually doesn't work, except for alienating family and friends.

I think the dropout rate is just human nature, like how many people join a gym and soon stop going, or anything like that where much work is involved.

[Joseph Ratliff]

Hi Chris 

That's exactly it...MLM companies usually use the "tell your friends and family" approach because it is easiest...and not many people like to sell at all.

But the reality is...MLM is a marketing and selling game, if you don't like to sell (not used car sales style, but real selling), market, or train people...then MLM will not be a good scenario for you.

MLM opportunities are a business (usually), and that's the bottom line...like any other business it has to be built.

[profitclinic]

G'day gang

The overriding reason why people drop out is because they're not making enough money.

Whatever amount that is for them, they're not achieving it or it's not within their visible emotional limit.

The best analogy I can think of to describe that visible emotional limit is this:

When I was young the neighbourhood kids used to hang out under the street lamp outside our home on summer nights. It was a lot of fun.

Sometimes we'd tell each other scary tales, huddled within the circle of light, not daring to go too near the edges where the darkness began. The only firm reality for us was what was visible within that circle of light. We could believe in what we could see... or what lay close enough to be seen in the surrounding gloom.

If people in network marketing can see that what they desire lies within their visible emotional limit, they'll tend to stay and keep trying. If the light doesn't move toward what they desire, or vice versa, they'll eventually give up.

The simple reality is that the light is directly over their heads. If they move toward something, the light moves with them.

The problem -- as suggested by others -- lies in getting them to visualize what they want, then move toward it. That requires action. But inertia and fear are twin millstones holding them back. As Shakespeare put it so eloquently...

"Our doubts are traitors, and make us lose the good
we oft might win by fearing to attempt".

The second thing, which tends to only happen over time, as confidence grows, is to rise higher so that the circle of light expands, widening their visible emotional limit.

Over the years there have been some interesting research studies done on what makes people stay in MLM. Two specific results were identified that still apply today, despite the passing of years and the effects of inflation:

• If they can earn $300 a month within three months, they'll stay longer.
• If they can earn $1200 a month within a year, they'll stay.

That's always been the key strategy to which I've targeted my own efforts and those of my downline teams. They work as well today as they did 20 years ago. But only as a starting point. They're measurable, achievable short-to-medium term targets that keep them focused.

Hope this helps.


John Counsel
CEO, The Profit Clinic
How YOU can build a downline with free, fresh VIRAL leads!!

[Craig Mattice]

Hi John,

Excellent post and I love your use of graphics for better explanation of your points.

Your posts are always informative and fun to read.

Thanks for contributing.

[profitclinic]

Hi Craig

Glad you like them. And the illustrations. They always seem to make learning easier (although some forums don't allow them, I guess because of abuse).

I just occurs to me that all of my posts here have been replies to other topics. I don't think I've actually started a new topic of my own yet. Hmmm....

Anyway, thanks for your kind words. And for your stimulating topics -- I'm enjoying them.


John Counsel
CEO, The Profit Clinic
How YOU can build a downline with free, fresh VIRAL leads!!

[Joseph Ratliff]

Great to see your "Counsel" here John! 

I always like reading your stuff.

[profitclinic]

Thanks Joseph

Likewise, in fact. I have a lot of your stuff in a binder by my desk that I refer to regularly.

Learning is always a two-way street, don't you find?

John

[Joseph Ratliff]

As a matter of fact, I agree with you 100% John.

I wish more saw it like that though.