Voodoo MLM Economics
The following is from Success in 10 steps by Micahel Dlouhy, a wonderful post on retention within Network Marketing and MLM.
Voodoo MLM Economics
Companies say, “We Keep 93% of Our People!”
They lie.
Truth: There was a phone company a few years back that had to publicize their retention rate, because they were publicly traded.
Take a guess. Out of every 100 people they signed up, how many were still in the business a year later?
50%? HAH!
25%? As they say in the Hertz commercial, “Not exactly!”
10%? You’re getting warm …
The public record showed 6% to 7% retention. That’s not 67% … it’s 6 to 7% retention. So you build your business for a year, you buy advertising, you do 3-way calls, you go to meetings, you talk to all your friends & relatives, and you wind up recruiting 100 people! Yippee! You’re almost rich.
Well, not exactly. Why? Because what you have left is 6 to 7 people out of 100 (!) still building the business.
Ooops … wait … that’s not all you’ve got. You also have smashed dreams, maxed-out credit cards, and probably a LARGE bunch of people who hide when they see you coming.
Whatever you do in network marketing must be duplicatable for the masses. Six to 7% retention is not smart business.
That brings up the next big lie.
From Success in 10 Steps by Michael Dlouhy,
Become a success in Network Marketing
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