Your Downline is Broke Because Everyone is Focused On Recruiting

Ok, so this will be up for debate by many since most Network Marketers always have their recruiting hats on. Customers are the life blood of any  business and most of us already know that. As a Network Marketing professional you’re taught 1st and foremost how to recruit and build a team. Which is great, you, me and everyone shouldn’t stop recruiting if we want to build a big business. The challenge is that is ALL 98% of MLM distributors do. Unfortunately majority of MLM companies and company trainers focus ONLY on recruiting. Of course when you recruit you get your new reps on autoship so they become the product of the product, you get paid a commission and the consumption of the service or product by that distributor qualifies him/her also as a customer. This kind of business etiquette will come to an end very soon thanks to regulators, FTC and AG’s. More and more companies are enforcing a certain ratio between customers and representatives to justify their volume. They are enforcing it in their compensation plan but unfortunately not at their training events.

There is a reason why  there are only 11 companies on the DSA list out of over 4800 MLM companies that do over a Billion Dollars in annual sales. That reason is their customer acquisition philosophy is in the right place. I try not to mention company names in my blog posts but if you remember back in the day there was (it’s still around today) a company whose distributors wore a button that said “Lose Weight Ask Me How”, well that little company is called Herbalife. They built a dynasty based on customer acquisition for weight loss. Now don’t get me wrong, I am not a distributor of Herbalife nor have I ever been but I do like to study the history of our industry. How does this relate to your business? Whether you’re marketing weight loss, legal services, travel, energy, vitamins, skincare, telecom or whatever, your bonuses and residual income are triggered by CUSTOMERS. Like I said in the beginning, this post will be a bit controversial so get ready

Does Everyone Benefit Equally From Focusing More on Customers?

There are certain companies that have more advantages over others to prospect for customers 1st before prospecting for reps. For example, if I market skincare and I get a customer to buy my skincare that they can see results with immediately then I have a happy customer right then and there. On the other hand, if I market legal services or travel and I get a customer that customer can’t experience the product/service until they have a need or want for it and that demmand is satisfied with the service/product I sold them. That doesn’t mean if you’re marketing legal services or travel that you’re pretty much screwed all that means is it’s easier for reps that have an almost immediate gratification based product to meet the customer’s need or want. With that said, according to a few years ago, a famous MLM company that markets legal services had a 6 to 1 ratio in their company for customers to  representatives ratio. That is VERY significant. Most of that was due to their B2B program. With more and more emerging Energy companies and Telecom MLMs the customer to rep ratio is significantly increasing. That is because with those type of plans you NEED to acquire a customer(s) to trigger a bonus.

Why Should You Focus On Getting More Customers vs. Recruiting?

Lets get one thing straight here, acquiring customers does not substitute for recruiting. I hope that’s clear. You need to recruit and duplicate to have a bigger team so you can have more customers. What I do want you to understand is you should be spending more time than you CURRENTLY do on gathering customers for your products or services. Stick with me here, I’m about to give you a list of benefits on why more customers means more revenue and more QUALITY reps. In the Network Marketing profession there is a phrase “Top-Bottom or Bottom-Up Recruiting”. Which simply means; Bottom-Up recruiting style is when you prospect for a customer and then turn them into a distributor through experience and validation of the product use. Top to Bottom recruiting means just the opposite, you prospect for a potential distributor and if the  prospect says no to the opportunity you then offer them to become a customer. Majority of MLM leaders and top earners spend most of their time on recruiting distributors, but recruiting QUALITY distributors. Most of my Network Marketing profession I spent ALL of my time on recruiting quality team members. When I took a short break from MLM while trying to decide which company I will call my new home I started paying more attention to different companies’ customer acquisition methods and their retention rates of customers and distributors.  Here is a quick list of reasons why Bottom-Up recruiting is better for the long term and why it produces better retention:

1. Easier to satisfy a customer then a rep. Whether it’s a service or a product, the customer is buying it because they either want it, need it or simply redirecting their already existing budget for a similar product. A prospect for a potential distributor often times needs to be educated on the industry, constant reminder of why they  need to stay on autoship (qualification in the comp plan in order to get paid to the max) and if a rep. doesn’t make the money they seek in the time frame they have chances are drop out.

2. Conversion from customer to rep vs. rept o customer is more gratifying long term. This is important to really understand. Since it takes less time to acquire a customer over a rep., out of 10 customer  you get on average about 2 of them will convert to distributors after conviction of the product/service through personal experience. THAT is the customer that will have total conviction in the company, product and purpose. Which means stronger residual income for you and great duplication. On the other hand, if a prospect says no to your opportunity and comes in as a customer, chances are much lower of them STAYING as customers since many times they do become customers as a favor to you since they already rejected you on the opportunity. Not all the time, but very often. Also, a new distributor wants to make money…fast! (what a shocker lol) and if he or she doesn’t make the desired income within 90 to 180 days chances are you lost that team member not only as a “required” autoship but as a customer outside of the business too.  (This may be hard to understand if you’re new in this business since you’re not seeing the attrition (fall out) yet. If you’ve been in business more than 12 months then you will understand this rather quick since you already see it happening on your team.)

3. Fear of MLM. As much validation our profession has, from Wall St. to your local Attorneys and Doctors, the minute a prospect sees circles and team building on the video or powerpoint they get taken back. This happens to the best of us even.  The guard is up and here come the objections. Because they say no to the opportunity now they say no to the company, which means they are not even interested in being a customer. Often times a presentation if flowing smoothly, prospect loves the information, product demo, service illustration and then BAM here comes the money making portion…the CIRCLES. This is why so many MLM companies have produced material for presentation of their products WITHOUT the business opportunity.

4. Referrals.  The referral based on genuine recommendation and not based on financial gain is the best referral in my world. Who better to do that than a happy customer? More and more MLM companies are taking this concept to a new level. Although a customer or preferred customer cannot make money unless they sign up as a distributor in most cases, they can be given an incentive to have their product received for free if they referrer a particular amount of other preferred customers. This creates a never ending Customer Goldmine. One of my all time favorite programs on how to create an insane amount of customers is Instant Customer Goldmine. It covers in detail how to generate a never ending referral data base of customers and more.

In Closing

Just to bring it more to clarity and to sum it up, I’m not suggesting ONLY to focus on customers but spend more time acquiring customers and develop a follow up system to convert roughly 20% of those customers into distributors through results. If you take a close look at all 11 MLM companies that do over a $1 billion in annual sales they all put a lot of emphasis on customer acquisition. A lot of companies that are less than 10 years old have been screaming how they will hit a $1 billion in annual sales in less than 5 years, never happened. Why? Besides the marketing issues, poor management and so on, a HUGE reason is they focus too much on recruiting with hopes of having more customers in return. There was ONE MLM company that reached $1 billion in annual sales in 7 years, and the company is longer around today. If you want to build an empire that’s lasting and duplicable you need to grow that empire organically with patience and proper distribution. If you don’t have a good marketing system for customers to give you more referrals then get one.  If you’re reading this and currently looking for a new MLM company then I suggest look for one that has a strong customer acquisition component that incentivizes your customers to refer more customers. Customers referring other customers increases YOUR residual income far better than distributor recruiting another distributor based on financial incentives.

Your partner in success,

Raphael Mavi

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Tags: bottom-up recruiting, customers, mlm, mlm companies, mlm customer, mlm distributors, top-bottom recruiting