Chances are, you didn't get into network marketing to become a professional salesperson; still, it's important to realize that the future of this profession belongs to the distributor who builds and maintains a small, rock-solid retail business.

Think of yourself as the owner of a MacDonald's franchise, in which you build a constituency of satisfied customers. Once you do this, you open up another restaurant across town. You license another independent owner and provide coaching and support, for which you receive a monthly override bonus. Then you open another store, and another, and another. This is the way network marketing began, and in the end, this is what it always comes back to.

 

Three-Dollar Hamburgers?

Too often, you'll see cases where a network organization employs a method of operation I call "The Buying Club Strategy," an approach based on creating an endless loop of people sponsoring people who teach others to sponsor people who teach others to sponsor people.... In other words, the only people actually buying products are the distributors themselves. Under such a program, an unscrupulous company could overcharge for products, because they know their loyal distributor base will buy them at almost any price.

And the customer? Well, in this scenario, there actually aren't any customers: they aren't a part of the strategy.

Looking at it from the perspective of the MacDonald's model quickly reveals the fundamental flaw in the model. This would be the equivalent of buying a MacDonald's franchise, paying, say, $3 (wholesale) for a hamburger patty, then never opening your doors to the public. Instead, you simply buy your food from MacDonald's Corporation...and eat it yourself--and focus on trying to recruit others who will open their own locations for a commission. A ridiculous scenario, I know...and it's really no less ridiculous to expect a network marketing strategy based solely on sponsoring, without growing a customer base, to work out in the long run.

 

The Model That Works

The opposite of the "Buying Club" model is the "Duplicable Customer Base" model, which is simply this:

 

When the individual distributor

a) creates at least a modest customer group (in most cases, we're talking a handful, enough to generate a monthly volume of a few hundred to a few thousand dollars), composed of

b) customers purchasing products and/or services, at competitive prices, that they

c) use and value, and then that distributor

d) sponsors and teaches other distributors how to do the same--then you have a rock-solid business model that can grow to huge proportions and last for many years.

Those companies who have stood the test of time in our great profession have always known this, and stand tall as shining testaments and models of the wisdom of the Duplicable Customer Base model.

This profession has the potential to be a powerful force in the world of 21st-century commerce; in order to do so, one challenge it faces is to more carefully articulate, demonstrate and support the integrity of this model. In fact, virtually all of the regulatory issues that have been concerns over the years have been issues that would have automatically resolved themselves if this had been the core strategy.

 

A Powerful Demonstration

Imagine having a product or service that was in demand in the open, non-distributor market that you could sell at, say, 20 to 25 percent retail profit (not to mention additional back-end bonuses). Imagine that you are servicing 20 customers per month and clearing $300 in retail profit. That $300 puts a few extra dollars in your pocket; more importantly, it also serves as the foundation of your entire one-on-one presentation.

By the way, before we go on, it makes sense to stop and ask yourself, "Do I have a product or service that passes these two tests in the open (that is, non-distributor) market: 1) quality; and 2) price?"

If your answer to either test is "No"--that is, if the only people who would buy your product or service are other distributors--then it may be time to examine honestly the viability of this business strategy. Growth based on big bonuses for startup packages, or even on repeat volumes generated purely by business-builders and their business-builders, simply isn't likely to last.

Assuming your business passes the "open market" test, then you have the potential for a rock-solid Customer Base model that makes a powerhouse of a business presentation, too!

Instead of using the tired, old, worn-out approach of talking about making "the big money" (which very few people believe, by the way, because they've never made that kind of money), you can show them your sales records: how you are earning $300 per month just in retail profits--before the duplication and organizational growth even kicks in! In other words, before you talk about "duplication," you can show them that there's something real, something right here on paper, worth duplicating. You can even show them, in detail, your precise strategy for building your customer base.

If you're talking to a high roller, you explain that while the $300 per month isn't much, imagine the compounding effect of having 100 people (or 1000 people) doing exactly the same thing. If he doesn't understand the law of compounding numbers, he probably isn't as high a roller as you think. This presentation covers both ends of the success spectrum. And it all begins with building a small retail business.

The truth is, a Duplicable Customer Base is easy to build if you have the right product or service. It's the future of our profession--and the future of your business.

 

DAWN SIEBOLD is co-founder
of the Gove-Siebold Group, a training organization that helps networkers develop world-class communication skills. www.networkingtimes.com/link/siebold