A few years ago I got a phone call from a lady in Texas. Sometime earlier, she had started a major corporation, whose name you know. It probably had a branch in your town. It’s since been bought out by an even bigger fish.

Anyway, this lady was very gracious. She was going to start an MLM company, and she wanted feedback from some MLM leaders on what she was doing. She flew Linda & me to what must have been the biggest ranch in all of Texas.

We were there 3 days, along with several MLM “Heavy Hitters”.

They Told Her She Had a HUGE Winner!

She showed us her products and she showed us her compensation plan, and she asked for our thoughts.

The Big Boys (and Girls) were flabbergasted by her wonderful products and astonished by her compensation plan.

Every single one of them wanted to be THE master distributor, so she would build the company under them.

The Painful Truth

When my turn came, I told her the truth: she was dead in the water. She had a bunch of “me-too” products. And her compensation plan was from the dark ages of MLM, piling up money for the leaders and sacrificing all the part-timers who would hope to fulfill their lifelong dream of having their own business.

With this comp plan, the part-timers were destined to fail. They’d never understand why. They would blame themselves, and many would never take the risk again.

Dora (not her real name) pulled me aside before we left and thanked me. Somehow, despite all the smoke coming from the Heavy Hitters, she knew Truth when she heard it.

She stuck to the business she knew. 

But if the Heavy Hitters would try pulling that stuff with one of the richest women in the country, imagine what they’d figure they could put over on YOU!

Have You Fallen For The All-Time Favorite Heavy Hitter Line?

Tell me you’ve never heard THIS one before:

“Go get one hundred NO’s every day. You’re just getting closer to a YES.”

Think about this. Isn’t it the stupidest thing? What nitwit came up with this idea? The word “NO” has taken more good people out of network marketing that any other word in the English language.

Picture this: all day long you’ve been flirting with your spouse. At night you take a bath, candles around the tub, soft music, perfect for romance. Some hugging, some kissing.

And your spouse says “NO!”

GREAT! Just 99 more “NO”s and you’ll get lucky! And some nitwit says “NO” is a good thing.

More Heavy Hitter Marketing Insanity

Another bit of wonderful Hitter advice for you: “Talk to EVERYBODY about your business opportunity.”

Oh, man, don’t get me started!

There’s an old saying you hear from time to time: the reason you have 2 ears and 1 mouth is you should LISTEN twice as much as you TALK.

Take a good look next time you see a Heavy Hitter. I swear, if you look closely, you’ll see they have zero ears and THREE MOUTHS!

But for the sake of argument, let’s see where their advice leads us.

Let’s say you owned a shoe store. You get 300 visitors. If you have the right styles, colors, & price, could you sell some shoes? Absolutely.

But you’d never try fitting a corporate Secretary working at the Trump Towers with men’s construction work boots. Not appropriate.

And not everyone wants your business opportunity.

“Talk to everybody” works great for the 8% of the population who are salespeople. But if you’re part of the 92% who hate pushy, aggressive salespeople, THIS lie will make you feel totally inadequate to ever build a networking business.

The key is target marketing. If you’re recruiting, just talk to people who want a home business. Lead with benefits. Tell success stories so REAL prospects see the value in your offer. And NEVER close them. Just offer them more information. The right people will ask to work with you.

Believe me, it works just that way.

We Appreciate You
Michael & Linda Dlouhy
Call 1-352-799-8779 (anytime)
Get my FREE ebook: Success In 10 Steps
“Be A Mentor With A Servant’s Heart!”

If YOU don’t understand “The Long Tail” of network marketing, your chance of success is pretty small.

Thousands, tens of thousands, hundreds of thousands … probably millions of people have quit network marketing, totally frustrated, thinking they failed.

The truth is, they just worked the wrong plan.

The Long Tail is a different way of looking at MLM. In the heavy hitters’ business model, you buy leads, call the leads, 98% don’t join, it’s over, burn ‘em off, next, next, next. And the 2% who do join you get disillusioned by no income in the first 6 weeks, so they’re off to some other pie-in-the-sky bizop.

versus … in the Long Tail model, you offer people a valuable freebie in exchange for their contact information. Then you call them up, you talk, you find out what they want & need, you offer them help, you build “know, like & trust” with them.

You continue contacting them at least once a month and over time, they’ll begin to join you in your business. The result is, you are leveraging every minute and dollar you spend to the maximum. And you wind up with people who really want to be in business with you …

People Who Will Actually Build YOUR Business

Network marketing is a relationship business for 2 main reasons:

1. You can’t sell a lick and you know it - so there’s no chance you’ll ever build any kind of business based on you selling something or recruiting somebody. That is why buying a list of leads from some unknown source – or even a known source – makes no sense whatsoever.

2. Your #1 goal is to create an income to support the lifestyle you want, an income which you can pass down to your children’s children. That means you must find business partners who will stick around. And that means you can’t just sell them something. You have to build a relationship with them … which you may do quickly … or which may take months or years.

The key is to make time work for you. If you’re just burning through a list of purchased names, you are always fighting time, because none of those people has had the time to get to know you. But if your goal is to “stock the pond” with real business partner prospects, and build a relationship, then time is working in your favor. The longer they know you, the more contacts you’ll make with them, the more likely they’ll start to see YOU as someone very special in this business.

People Haven’t Changed Much Over The Last Thousand Years

They still want love. They want passion in their personal lives and their professional lives. They want self-satisfaction & health, security & achievement, freedom & trust, fun & financial independence.

People will still want these things a thousand years from now.

The mistakes I see people make in this business astonish me … the wrong directions they take and the worthless busywork they do.

If you want happiness and fortune & fulfillment in your life, if you want a lifetime of luck, you need to create relationships with people. To do that, you need to study people and understand them. If you will only do that, the opportunities you’ll be presented with are endless.

For you to have great success, it’s critical that you have that “Long Tail” viewpoint of building relationships. Over time, those relationships will pay off for you.

That’s why you must promote YOURSELF to people, not some product or company. Unexpected things can happen to products or companies. But if you build the relationship of YOU and that person, then eventually, there’s a good chance you are the one they will come to for help and/or advice … and/or your business opportunity, whatever it is at that particular time.

It’s Not The Product Or The Company Or Even The Money That Is The Magic

Most people focus on the money. Recruit someone today. Sell a product today. When they call people, they churn & burn. If a prospect won’t join now, today, then hang up and call the next one.

The problem is, people quickly spot that “me first” attitude. It’s what they’ve come to expect. It gets you nowhere except frustrated and out of the network marketing business.

It’s time to realize that the magic isn’t the product, the company, or the money. The magic is YOU.

One way to make money in any market is to simply be there and see things in their early stages. Get involved and contribute to others in the same market. I learned long ago how important it is to your financial success & your happiness to be able to predict the future, by seeing things as they really are now.

See Into The Future

You can do that, too … all it takes is a strong commitment. Understand the problems people have in network marketing, and what causes them, and what the solutions are. And if you know that much, it’s easy to build value-based relationships with people, because they will know that you are sincere, that the information you are giving them is true … and that you are helping them.

This is all I have ever done in network marketing, and I promise you, it works like crazy. This very article is a perfect example.

The majority still believe network marketing is a sales business. There are very, very few who realize that the big organizations are built by people who understand The Long Tail … the value of building long-term relationships.

Most people are still focused on making money right now, this afternoon at the latest. But for the money to happen, you must first be a person willing to give value to others with no expectation of return. And your plan should be to continue doing exactly that, over time, so that you can take advantage of The Long Tail of network marketing.

We Appreciate You
Michael & Linda Dlouhy
Call 1-352-799-8779 (anytime)
Get my FREE ebook: Success In 10 Steps
“Be A Mentor With A Servant’s Heart!”

Are you currently building a network marketing distributorship?

What are your 2 biggest business challenges?

OK. Would you like to do something about them?

I bet you would. And here’s the first thing you need to know:

These challenges are not your fault!

The cards were stacked against you right from the start!

You just didn’t know it. You didn’t realize it. And here is why they were stacked against you.

Let’s take a very close look at the network marketing business model. Because you’re an entrepreneur, you’re here to make money, you’re in business. So it makes sense to look at the business model, doesn’t it?

What I’ve seen is that very often it’s your company’s business model that causes your problems, not you. Let me give you an example. I’m sure you’ve seen network marketing companies that brag about having a huge, multi-million dollar home office. They have pictures of it on the website, flash presentations, it’s on all the brochures. But the millions of dollars that paid for that building is money that you will never get back in your compensation plan.

In network marketing, the ONLY place that money is made, whether by the distributors or the company, is from the compensation plan. Your MLM company does not have another stream of income that generates money for them.

Company Income Always And Only Comes From YOUR Compensation Plan

So whatever spending you see, that is money that will not come back to you in the compensation plan.

But here’s where it really gets ugly. Your company’s beautiful building requires maintenance. They need a cleaning staff. It has to be painted, windows have to be maintained, bathrooms have to be maintained, these buildings get cleaned every night. They have a water bill, an electric bill, heating, air conditioning. They do everything necessary to make that building a showplace for the company.

Who Is Paying That Monthly Bill?

Where’s the money coming from?

Correct - it’s coming from your compensation plan. That is money that you will never receive in your check. It’s gone.

Now … when do YOU plan on using that building?

Did I hear you say, “Never!”?

Exactly. You will never use that building, yet you are paying for it. And that’s not all. These bloated network marketing companies brag about their call center, and the hundreds of employees they have sitting there, ready to take your order, giving you the best possible customer service.

But every one of those people is a salaried employee. They get health benefits, maternity leave, vacation leave, sick leave. The company has sexual harrassment insurance. Those employees get bonuses over the years, raises. Each one works in an office at a desk, with a phone and computer.

That is a monthly bill.

Who Is Paying THIS Bill?

Exactly. YOU are! (Are you beginning to notice a nasty trend?) That’s more money again that will never come back to you in the compensation plan.

Now … where do you think THIS business model will go in the future? Do you think your company will have less expenses or more expenses?

Sure. It’ll be more. As the building gets older, it needs more maintenance. The longer people work there, the more salary they expect. As the business builds, they’ll outgrow the building … and, of course, build another new building!

Another good indicator of the heart of a company is, where is the warehouse located? Most cities have a warehouse district, very low-rent, low cost. It makes sense for businesses to keep their stock there. But most MLM companies have the warehouse right next to their big new building. Why? Because it’s more impressive, and they can say, “Look at us! Look what we’ve done!”

Who Pays For That Extra Expense?

Yes, of course. It is you.

So what’s the solution? The key is to find a streamlined MLM business … one that doesn’t feel the need to put on a gaudy show with YOUR money! I’ll talk more about that in just a moment.

First, let me give you an example of how this high-overhead business model affects YOUR ability to build your business.

I’m thinking of 3 different companies right now. They all market the same product, a multi-vitamin pack. It’s an awesome product, flat-out works, and all 3 companies market the identical formula, identical raw ingredients. Except Company #3 has also added to the formula a chelated enzyme to allow you to digest & absorb nutrients better.

Now would you agree with me, that to produce that product, same quantity, same quality, same formula, the cost of production for those companies is within pennies of each other?

Of course it is.

Well, Company #1 markets the 30-day supply of that vitamin pack for $117. So do you think you’re going to be able to retail that to someone? Do you know anybody who would gladly pay you $117 for a 30-day supply of a multi-vitamin pack, regardless of how great it is?

I’ll bet you don’t. It’ll be tough, for sure. So therefore, you’re going to have a challenge to retail that product.

Company #2 sells the same formula for $108. It’s still expensive. You’re still going to have a challenge retailing that.

Company #3, which has the same formula, with the added chelated enzyme, so you can digest & absorb it better, sells it for $39.95. Now, I ask you, is that affordable? Do you think you know people who may purchase that product from you?

Absolutely.

The Business Model Drives The Behavior

So what kind of behavior do these different business models create in the field? Here’s what happens.

People who market the more expensive products spend their time recruiting. This is where the money is made for them. There’s no money in retailing for them, because nobody’s going to pay that high price for that product.

So what do they have to do? They have to recruit, recruit, recruit.

And what happens after you join them? When they sponsor you into the business, they have no time to work with you! You’re in, they got the commission, and they have to move on to recruit the next person. They don’t have time to work with you because their business is built on recruiting because they can’t possibly retail products.

Now, do you have any idea why Company #3 can afford to sell the same formula, with the added chelated enzyme for better digestion, better absorption, at $39.95? Why do you think they can do that?

“They must not have the overhead.”

Exactly. They have way less overhead than the other 2 companies. Their warehouse is in the warehouse district. No multi-million dollar home office. They take 97% of their orders automated over the internet, so they need very few actual employees.

Company 3 Has Just a Small Fraction of The Overhead of Company 1 or Company 2

So it’s a more distributor-friendly business model.

I’ve found that 92% of the population doesn’t like to sell and doesn’t want to be sold to. How aggressive do you think you have to be to move a box of a 30-day supply of a multi-vitamin pack at $117 each?

Pretty darned aggressive, don’t you think?

And let me ask you this. Who do you think is buying this? You don’t know anybody who’d buy it. I sure don’t know anybody who’d spend $117 for it. But they sell plenty of it. Who do you think is buying it?

It’s the distributors. The distributors are buying it. Why? Because they have to qualify to get their bonus check. That’s the only reason they’re buying it. This pricing doesn’t create a retailing behavior.

A Real Example Of How To Use An MLM Product

Do you know anybody who suffers from a blood-sugar disorder like hypoglycemia or diabetes?

OK. This person that you know, do you think they might know 5 or 10 other people who also suffer from diabetes?

Yes, they probably would.

OK. Well, do you think they might be interested in a product that could help them rebuild the pancreas and possibly take them off insulin or at least cut down their insulin? Do you think they’d be interested in a product like that?

I bet they would. Do you think they can afford to pay $19.95 for that product?

Sure they could. In fact, if you had that product, you could even afford to gift that to the right people, using it more or less as advertising, couldn’t you?

OK. Now what would you rather have? Would you rather have people coming to your website, purchasing this product for $19.95, all these different people sharing with each other, or would you rather be in one of those first 2 companies, trying to market a $117 multi-vitamin pack? Which one makes sense to you?

Sure. The diabetic product. And look again, why can this company afford to do this?

Because they’re streamlined. It creates a retailing behavior. You can do business this way. Anybody can purchase products at this price, because it’s affordable. Does that make sense?

Of course.

But There’s Another Big Surprise!

This is really interesting - guess which company of those 3 pays more to the distributor in the compensation plan and requires fewer people to get yourself to a $10,000 a month income?

Yes, it’s Company #3. How is it they can do that?

That’s right. Less overhead. And now you’re starting to get the picture. You’re understanding why it’s so tough for you to make money in network marketing.

Next question. As time goes on and the bloated business model of Company 1 & 2 continues, what is going to happen?”

Let me tell you what MUST happen. They’ll have to raise the price of the products and pay less in the compensation plan. It has to happen. There’s no other source of money for them, so there’s no other way to pay for increased expenses. They’ve created a monster that they can’t control. The only thing they can do to keep it going is to keep feeding it.

And this is where you’ll end up paying $4 for a bar of soap, $20 for a bottle of shampoo, $100 for some liquid nutritional. There are MLM companies out there right now where you can find those prices.

Where Have The MLM Giants Gone?

And it will get worse & worse over time. That’s why companies flat-line. You know the famous names of the big-time, old-line companies … they are flatlined.

So what do they do? They go into new countries. They open new countries, because they cannot compete in the US anymore. Their product prices are too high, their pay plan is too inadequate. Their US business & distributor base just falls by the wayside.

I recently read about a well-known nutrition juice. The article had a lot of stories of people making money. The company has an absolutely gorgeous building, all decorated in Tahitian motif. The building temperature is maintained high to be the same temperature as it is in Tahiti! They have a beautiful waterfall, a fountain in the foyer with their nutrition juice pouring out of it!

And what is this company doing to make money? They’re opening up restaurants where they’ll serve food & their juice. Now where is THAT money coming from? It’s coming out of the compensation plan, and distributors are paying for it.

They say they’re doing it to generate leads which will go to certain leaders in the company … which means that if any reps benefit, it will be the heavy hitters - the ones who’ve already built big. It’s just a way of transferring money from the part-time rep to the company and the heavy hitters!

You can look for product prices to increase and rep compensation to decrease. That’s the problem when your overhead is sky-high.

The network marketing business model truly does drive the behavior in the field.

Note: My good friend Roberto Torres has also added his thoughts, which are included this article.

We Appreciate You
Michael & Linda Dlouhy
Call 1-352-799-8779 (anytime)
Get my FREE ebook: Success In 10 Steps
Be A Mentor With A Servant’s Heart!”

We do a training called the 5 Pillars for Success. These are the pillars that YOU as an MLM distributor need to have in place for success. It’s not what a network marketing company needs. It’s you, the distributor, and that is an important difference to understand.

The top company in the network marketing industry does $10 BILLION in sales every year. Company #2 does 1 Billion a year. And what’s amazing is, Company #1 pays only about 10% of the commission that Company #2 pays!

Company #1 is very profitable. But, aside from the old-timers, the distributors are not profitable at all.

Do They Even Know How To Spell MLM?

So company management experience with integrity is Pillar #1. Has that CEO or management team ever built a network marketing organization?

A lot of these network marketing company owners come from a Fortune 500 background. They’ve never driven 4 hours one-way to do an opportunity meeting for 20 people, only 2 show up, do the meeting, do the training, drive home, fall asleep at the wheel, pull into a rest area and sleep for a couple hours so they can get home, get a shower, and go to work that day as a secretary, a nurse, a carpenter, a doctor …

THAT is the truth about MLM that these pretty-boy hotshots will never know. Let me tell you a story.

My good friend Dave Cones came to Florida from Oklahoma, in 2002. We were invited as guests to an opportunity convention, because we were doing some consulting with these people. We sat in the audience. It was a 2-day event. We watched the presentations & watched the people there.

The company - and I can mention their name, for reasons which will soon be obvious - was Heartbar, a publicly-traded network marketing company. They were about 18 months old at the time.

President of the Company - Great, Fabulous Guy!

You couldn’t have found a nicer guy … but he didn’t know anything about MLM. His background was Fortune 500.

So he’s onstage doing a presentation, and he said, “You know, I’ve just so enjoyed travelling the world, travelling across the U.S., going to the meetings, meeting such great, great awesome people. What amazing people that we’ve met!”

“And that’s going to have a big impact on our decision, if we ever decide to do away with the compensation plan and go to direct sales.”

Dave & I looked at each other. We had the same thought: “Whoa! Hard to believe that guy said that from the stage!”

The Reps Must’ve Been on LSD!

When they took a break, Dave & I chatted with some of the reps. We asked what they thought about what the President said about doing away with the compensation plan.

Nobody heard it! 

It was amazing. It was like they were on some euphoria drug. We didn’t talk to one single person who heard him say that!

Something else those reps didn’t know: Heartbar created a product and was selling it to athletes. They didn’t think their reps would ever find out. Of course, the reps did find out. And when they realized their own company was competing against them, they raised a howl.

The “Dear John” Letter Arrives

And right after this ruckus, the company sent out a letter of termination to every single Heartbar rep.

How could they do it? Because a clause in the Heartbar Policies & Procedures said “Company may terminate the status of any distributor at its sole discretion, without cause, by giving 30 days written notice to the distributor.”

And if you were unclear what they meant there, you just had to read down another couple paragraphs. It said, “Termination results in the distributor’s loss of his or her sponsored downline organization.”

So distributors built the organization, built the group volume, & built the product sales. And the company cut the reps out of the profit picture and went direct sales with it.

This is EXACTLY what you can expect with a management team of Fortune 500 guys who never built an MLM downline. They have no understanding, no empathy for you. Their only concern is bottom line profitability.

So if you built their business for them, but it’s in their financial interest to get rid of you - and they can legally do so - you will be history.

Have you read YOUR network marketing company’s Policies & Procedures lately?

We Appreciate You
Michael & Linda Dlouhy
Call 1-352-799-8779 (anytime)
Get my FREE ebook: Success In 10 Steps
Be A Mentor With A Servant’s Heart!”