SELECTED PRESS RELEASE:
12/21/2011 8:07:45 PM EST
|Open Letter to Networkers by Kevin Campbell
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As I near the completion of my 36th year in the home business networking industry, I wanted to share a few thoughts on where I see the industry moving. There is no doubt that things are much different today than in the good old days of the 1970's. Back then, I was one of the first to combine direct mail with network marketing and it worked like a charm. It worked because it was easy to duplicate and was rejection proof. A prospect would receive my letter and either toss it in the trash, or clip off the application and mail it back with a check for the business I was promoting. Recruiting was simple and easy. Back in those days the marketplace was wide open and the mailing list we used would consistently pull between 4-8% response.
Today, that percentage has dropped to around a quarter of a percent and the cost of mailing has increased three fold. Not a good scenario for newbie’s just getting started. Add to that a very crowded opportunity market and you have a prescription for disaster. It has become clear to me that today’s entrepreneurs are simply reacting too fast to their emotions and not willing to take the time to learn how to be good networkers. Most begin promoting programs without fully understanding what the marketplace is looking for. I too struggled identifying today’s marketplace. I was stuck in 1990's thinking. Hard to teach this old dog new tricks so to speak.
I would like to share my thoughts on where I feel the marketplace is today, and what is working. First, let me say there are hundreds of really great companies offering great products. Many of these products create an emotional attachment with the users and those companies are thriving. In other words, the products are so good people will buy them monthly with or without a compensation program. Many of these companies have been around a very long time. However, because super stores like Costco and Sam’s Club have now begun to offer similar products like Noni and Acai juices, and specialty supplements, these great product companies are losing their market share.
Therefore, in today’s marketplace, it is extremely difficult for network marketing companies in the health and wellness sector to attract and keep distributors unless they have a proprietary exclusive product with real health impact for the consumer. Another problem these companies have is the inability to keep prices competitive. Most use private label outside manufacturing which takes price control out of their hands. Add to that the cost of the pay plan which typically pays out 40% of every real dollar taken in, and it’s
a very tight balancing act. This high cost and the inability to pay out more than 50% back to the distributors is one of the reasons there is such a high turnover in the industry.
I had this discussion a few days ago with a friend who has been in the industry many years. There are so many companies out there keeping the loaf of bread and paying back crumbs, most distributors need to build an organization of 60 or more downline in their first two months or they will be gone. The reality of the industry is that most people are being paid an average of 5% on the volume of their organizations. In other words, a group volume of $100,000 would be required in order for that distributor to earn $5,000 in monthly residual income.
98% of the people who join a traditional network marketing company will quit within 90 days of sign up. They will quit because they have not been taught how to build the business in today’s marketplace, and they do not have a system with the tools that work today. But the biggest reason they are failing in such high numbers is that companies are unable to pay them significant income soon enough to keep them. In today’s economy, the worst since the great depression, if a person cannot realize a few thousand dollars of income within the first 90 days, they will be out the back door fast.
Recently, this year, there have been a few cutting edge companies and programs that have successfully addressed this issue. One organization Empower Network recently created a web based opportunity with a 100% profit for its members. This clever program offered a sophisticated blogging marketing training that allowed the creators to offer a clever aussie hybrid that paid its members directly. All the money was paid directly to the members, and the owners were participants equal to the other members. The only advantage they had was being on top of all the action. This was their advantage and frankly they deserve it. If they can continue to keep their opportunity fresh and continue to improve on services, I think it will be a solid opportunity for many years to come.
Another program I researched is actually a new division of a 13 year old company that is focused 100% on teaching networkers how to build a business in today’s marketplace. They offer a suite of marketing tools and virtual office services that have the ability to turn an average marketer into a super star in short order. And because they are also web based, they have no product overhead. This allows them to pay very high commissions on just a few levels. It’s this combination of needed services and extremely high payout that locks in distributors and eliminates the typical 67% industry turnover every 90 days. Here is a recorded overview of their very lucrative automated system…(503) 501-4816.
Finally, another trend I have been watching in the marketplace is the proliferation of the Big Ticket 1-up and 2-up programs. Many people who have tried traditional network marketing have gravitated to these big ticket programs and the extremely high income potential. Most of these programs require an average start up of between $1500 to $3500 and up to $10,000. Travel packages and wealth training seminars are the main products used by these big ticket programs. I personally think these programs are great for the right people who have the resources to promote them effectively. To sell a $3500 or $6500 product, you must be willing to spend money finding qualified high end prospects. This takes most networkers out of their league. The old saying it takes money to make money would apply to these big ticket programs. They are great for the right people, but longevity and the lack of qualified prospects is the concern.
So where does that leave most people going into 2012? The answer appears to be finding a product or service that people MUST HAVE, and a compensation system that pays BIG DOLLARS fast. Web based services that provide a turn-key marketing system or “funnel” with access to leads will be the trend. Programs that pay out at least 70% or more on fewer levels will also be a strong trend moving forward.
To all my marketing friends, I wish you the best holiday season and a prosperous new year.
Via Terry R. Schmeltzle
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|Hi Terry good info you shared will tweet your blog|