Givers Gain

Thank you for helping folks focus on what makes network marketing the wonderful gift that it is [“The Close,” May/June 2006]. “Givers gain” is so true. I looked for a long time for the right opportunity and fit, and it made all the difference in helping my friends succeed, too.

I love your “three-foot rule” (“anyone within three feet is worth getting to know a little better”)…everyone wins.

—Nancy Sustersic

The Internet is Female!

I love this statement [“The Internet is Female!” May/June ‘06]. As a woman network marketer, I naturally want to build a relationship, answer a need, give a connection to the person I am talking to, and sometimes that connection is for something besides my own product.

Since I am in a company that pays us to 1) sell product and 2) recruit others to do the same, I am always under pressure to “get the job done.” It is refreshing to see, in print, a truth that rings inside most women. We all need to carry the message forward to everyone who will listen:

Be friendly, listen, ask questions to find what the person you are talking to is really needing—and then route them where they need to go. Learn to ask for assistance, telling others why you need their help. Really learn to network in the world; networking is connecting!

I know that when we really do this we are always blessed and rewarded. Good always begets good! Thank you for an Internet site for real people and for candid and real comments that need to be heard.

—Suzy Hayden

The $300 Solution

Could you please refresh my memory on the following statistic: “If you help your downline produce an income of $X ($300?) per month, then there is an X% (90%?) chance they will remain active within your organization.”

—Jim Traner

The figures you’re looking for derive from an article written in the early ‘90s by Upline co-founder Randolph Byrd, called “The $300 Solution.” (The article is available on our web site: go to the Networking University section and click on “Free Resources.”) In conversation with leaders in the business, Randolph came to the conclusion that $300 per month in residual income (note: not income from one-time purchases or startup packages, but monthly repeat income from ongoing consumption) was the threshold that would trigger commitment to the program.

This article was one of the most popular, often-reprinted and widely-circulated articles in
Upline’s history. Nearly a decade later, in a revision of the article for Network Marketing Lifestyles, Byrd revised that figure upward to $500.

There are no true hard figures for that retention percentage, no scientifically measured (or even estimated) figure “X” for that heightened chance that leaders will stay in the business. Like so many statistics people commonly cite, there is actually no proven statistic there. However—as in most cases where people cite figures that don’t truly exist—the observation is still valid!

The fact remains: when you are able to help a new recruit build to a residual check of a significant amount (typically $300 to $500), within a short time (typically 90 days), the chances of that person dropping out or quitting shrink dramatically. Again, the key here is the word “residual”: front-end packages, startup bonuses and one-time purchases can sweeten those first few weeks in the business, but it’s genuine repeat income you’re looking to create.

Thank you very much for your very complete and immediate response. I needed this information rather quickly. When I sent the email with my request to the “Editorial staff,” I thought about how long it might take to get a response (if I got one at all), had I sent my letter to some other publication—but I felt Networking Times would be responsive. You actually exceeded even my high expectations! You’ve reinforced my belief that Networking Times is built on a foundation of helping other people.

I have copied my upline Diamond on this email, too; I’m sure she will enjoy seeing that the publication she promotes so much is indeed worthy of that promotion. 

By the way, thank you for reiterating the residual component of the equation. I have realized that and I build my strategy around it, but nonetheless, it was good to hear you place focus on that element. 

—Jim Traner

P.S. Did Mr. Byrd provide any estimate at all regarding the percentage chance they would remain? If not, would you be able to conjecture what would be a safe estimate—i.e., as high as 90 percent, or would it be something much lower?

I firmly believe that strong retention is one of the real keys to a profitable, sustainable network marketing business. However, I would so much appreciate hearing from you where this presumed percentage would most likely be, on the scale of 0 to 100.

The number varies widely, being dependent on so many factors from company to company and even from organization to organization. For example, even within one company, one particular organization may be much stronger in its habits of downline support, working depth, training and so forth, which will tend to create a much higher retention rate.

It is often said that the typical drop-off rate for network marketing companies is something like 90 percent. (The figure Randolph cited in his original article was “80 to 90 percent” as being a typical attrition rate.) While this sounds high, it isn’t really that surprising, considering that the model our profession uses is based on what is fundamentally a volunteer organization.

But there are a few other salient points worth noting about so-called attrition rates.

First, this figure would cover all participants, from top leaders all the way to casual product users who never really intended to “join” anything, en-rolling merely to try a product.

Furthermore, quite a few people who drop out either sign up again into a different program (and hence are not leaving the profession, just that particular company), or even again into the same program—typically casual product users who drop off unintentionally because of infrequent ordering, and then reenroll so as to continue ordering. I’ve had product-user distributors who “attrit” and “re-up” every year or two, and have been faithfully doing so for twenty years!

Here’s the bottom line: The people who are most likely to continue ordering month in and month out for years on end fall into three categories: 1) devoted product users whose lives are powerfully affected by the product and who could not be pried off your product with a crow bar; 2) business builders who are having enough success in their businesses to make continual ordering worth the trouble and expense: i.e., those who are earning enough regular money at least to offset their product; and 3) people who are driving some benefit other than financial, most commonly the social benefit—those who love being part of the group, even if they aren’t making enough money to cover their product.

If you have a life-changing product, get your people earning money fast ($300 solution) AND create a meaningful human experience for people, an inspiring team to be part of, then you’re covering your bases and will doubtless have a far higher-than-average retention rate.

Thank you very much, once again, for your prompt and thorough response. I am going to think about what you have written and integrate it into my thoughts and plans for building a large and sustainable organization in which my downline will benefit from the insights I have gained from you.

So much of this business is heart, passion and activity. If one combines that with the integration of knowledge from those who have blazed the trail before them, then one’s chances of success must certainly be improved.

—Jim Traner