Paying attention to the right Network Marketing statistics can result in a stable and growing business that lasts.

The subject of Network Marketing statistics is certainly not one of the most exciting you can think about.  In fact, the mere thought makes most peoples’ eyes circle with boredom!

However, by focusing on the right numbers you’ll have a good indication of the health of your business, and with that information you’ll know whether you need to make any necessary adjustments or improvements.

Successful entrepreneurs and business owners know the key figures to watch, but even they can quickly fail if they don’t keep their eye on the ball. You don’t need a complicated process that’s buried in complex accounting, just something that enables you to keep track of the figures that matter! 

I started my working life as an auditor involved with a few company receiverships (companies that had failed financially.)  It amazed me how many of these companies were actually profitable but they’d just started trading too fast and hadn't got the cash to keep on running.  They lost track of what was, for them, the most important numbers - the cash flow.

Undoubtedly, for you the ultimate Network Marketing statistic is the amount of money the company will pay to you over the years you're with them. Unfortunately, this is a number you usually only get to know afterwards.  But there are certainly other numbers that will give you a good indication that you're building a healthy long-lasting team – OR NOT!

The wrong numbers to focus on.

Many network marketers tend to focus on two basic statistics: 
1. the volume in their Network Marketing organisation.
2. the total recruitment within their Network Marketing organisation. 

Both of these are of value, but they're certainly not the primary statistics that tell you about the health of your business.

1. Volume

The volume of your Network Marketing organisation, for most companies, is measured at the point at which the products leave the company's warehouse.  You can actually exercise a lot more control over this number than you may think.

By running promotions you can make quite dramatic increases in the volume figure.  However, unless this promotion also helps you to build lasting teams, once the promotion is over the volume will drop back.

2. Recruitment

The recruitment within your Network Marketing organization is again, not a bad number to look at if those people being recruited stay around.  If they’re quitting as fast as they join, then this number actually tells you nothing.

Once again – you can affect this number quite dramatically by running promotions.

Good numbers to focus on.

So what are the good numbers to pay attention to? 

Well the one to start with has to be retention.  This means the people who are sticking around, whether they’re customers or business partners.

1. Retaining your customers and business partners

It's well known that the longer people stay, the longer they’re likely to stay.  There are many reasons for this, including the fact that buying products from the company can become a habit, and since human beings tend to like habits, we stick with them.

Retention is typically calculated over a year, so if you were to look at your printout from a year ago, would you find all the people you personally sponsored still with you today?

The number will rarely reach 100% because the truth is that ‘things happen in life!’ So the question is “What’s an acceptable figure?”  I’ve seen some companies with a figure as low as 1% which, if you think about it, is appalling. It means you need to recruit one hundred customers or business partners for just one of them to stick around. 

Many business builders quit this industry, having been disillusioned by seeing the teams they’ve worked so hard to gather, evaporating so quickly.

If you look at the people who’ve built sizeable, stable incomes that have allowed them to retire, their retention rate is somewhere in the region of 33% to 66%.

It’s useful to know that the retention rate increases over time.  For example, if you personally sponsored 10 people who were earning $100,000 a year each, then it’s highly likely that all 10 of them will be with you next year...