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Crossing the MLM Desert

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Article by: Mark Rawlins | Founder & CEO, InfoTrax
May 19, 2010

 

When the pioneers headed to California in the days of the old West, they came upon the huge deserts of Nevada, containing little water and no food. These deserts took days to cross. At the edge of the desert, the pioneers discarded anything they could, loaded up on water, and headed out as fast as they could, hoping to get across before they ran out of water and died.

In many successful MLM companies, distributors have to “cross the desert.” They have to expend time, energy, and money to become sales leaders and the payoff for that effort doesn’t come until they reach the other side of that transition. For a while, they have to work very hard without earning enough to justify the work. This isn’t a problem. In fact, companies sometimes create a desert on purpose and the reason is simple. Sales leaders normally make 10-15% on their group sales. The easier it is to become a sales leader, the more people do it, and that leaves less income for each sales leader. Breakaway commission plans, for example cause the distributor to work very hard for little reward but promise that he/she may eventually become a sales leader and gain a bigger reward later. It’s not a bad thing to set a high bar for your distributors to reach, but it can become a problem if it isn’t properly designed.

Companies must understand the ramifications of having distributors cross the desert to become leaders. If the process is extremely difficult and expensive, if distributors are misled about the size of the desert, or if the reward on the other side of it doesn’t justify the effort, you run the high risk of alienating your distributors. They won’t remain consumers and they’ll tell everyone they know about their bad experience. They will point out that it was the company’s fault.

Industry-wide, most recruits are lost in the first 60-90 days—attrition. This is because they lose confidence in their ability to succeed in the long term. Most who leave so quickly do so after forming the idea that participation in an MLM business opportunity simply is not worth their time. They don’t earn enough in their first few weeks to justify the time involved. What would you do if you put 40 hours into your business as a new recruit and received only a $16.83 commission check in return?

What do companies do to help a new distributor cross the desert? The Fast Start Program is a way to reward new recruits early on. It keeps their interest and fuels excitement. Rewarding you sales force in a timely fashion is another approach, which is accomplished by building a series of goals and rewards along the way to the ultimate reward. As distributors reach each goal, they should be recognized and compensated. This builds their confidence that they can achieve their future dreams.

The secret is for companies to make their desert hard enough to cross that only those who are serious about the business will cross it, but not so hard that everyone dies along the way. It’s a fragile balance yet critically important!

 

 

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Source: Understanding Multi-Level Commissions and Their Role in a Successful Company, Mark Rawlins.


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Mark Rawlins | Founder & CEO, InfoTrax

With a career managing MLM/network marketing companies that spans more than 30 years, Mark Rawlins is recognized as one of the pioneers and...

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