Network Marketing Article – What’s the real game of Network Marketing?

When I ask the people who’ve hired me what’s the main activity in Network Marketing, I generally get one of two answers - it's about having customers or it's about gathering distributors.

Now I agree these both have to happen, but this is not the real battleground of Network Marketing.  This Network Marketing article deals with the real battleground which is  retention - getting people to stay around, whether they’re customers or distributors.

When I first start working with new clients, I find most peoples’ businesses are like leaky buckets.  They want to pour more and more water in at the top, yet as they do it flows out of the holes.  The higher the water level in the bucket - the faster it comes out of the holes.

And this can very quickly lead to desperation or resignation.

People tend to feel the solution is to cram more people in, hoping that some will stay.  As you’ve probably heard - one definition of madness is "doing what you've done before expecting different results" and quite often cramming more people in means using more automated systems for recruiting people.  This in turn means less human contact which, ironically, is actually one of the things that keeps people out.

Now, it's fine for all the authors out there to say that this sort of behaviour brings our industry into disrepute - there's no question of that. But think of the individual who is desperate to build a business and will do anything to achieve it. True – they probably don't really care about this industry, and they may only have a limited caring about the company they’re with. But what they’re desperately trying to do is to build a business so they can get some money! That doesn’t necessarily make them ‘bad people’ – they may just be people in a bad situation.

If you’ve found yourself in a situation where more people seem to be quitting than joining, then what you need to do is address why they’re quitting.

There’s no generic answer to why people quit your team, the reasons will be varied. However, it’s possible to find out by asking people who stop working why that is!  I fully appreciate that quite often there are bad feelings floating around so this can be a painful exercise to do. However, just a few exit interviews with disgruntled team members could yield sufficient information for you to make the changes that drastically reduce the dropout rate in your team.

There is another way of looking at this issue, for those people who like to play with numbers.  I was talking with a senior member of the management team of a well-known large international Network Marketing company, and was told that the retention rate is 1%.  That means - of one hundred people they recruit, they only expect one to stick around for more than three of four years.  This is an appalling statistic and, sadly, I don't think it's unusual.  I certainly appreciate that staff member’s honestly with me.

So, let's say in a year you recruit 100 people. This means that you can expect only one to stick around long term to give you your residual income. If you wanted to double the number of people who stick around, and your only strategy was recruiting more people, then you would need to recruit 200 people which involves a huge amount more work.

But let's say that by interviewing a few people who've stopped working, you could put in place strategies that means that just one extra person stayed with you.  Then for the same hundred recruits you would have two people, and that’s a significantly easier job to do. It would also be reasonable to assume that if you were talking with people who exited your team you would come up with strategies and solutions that would keep far more than one extra person. 

Evidence shows that if you create a good support system for your team, you could have anywhere from one third to two thirds of the people who join, staying in the longer term.  That’s 33% to 66% sticking around, and that’s quite a dramatic change.

Now let's look at this as a business decision.  As you’ve probably read before in my articles, I'm keen that we all treat our businesses - as a business - no matter what size it is.

To grow a bigger team you can try to recruit more people. This usually gets more and more expensive as there are diminishing returns from your efforts, and you're competing against more people who are also looking to increase their recruiting numbers. See my Network Marketing tip on Power vs Force. 

Alternatively, you can focus your attention on keeping the people you've got and recruiting far fewer.  The cost of recruiting will then fall, partly because you're recruiting fewer people, requiring less effort, and partly because you’ve chosen the most productive method of retaining new recruits.

So as a business person - which is the best strategy for you?