My Biggest Mistake
As you know, I’ve been very successful in network marketing and made millions of dollars. But I can’t help thinking about the $10 million or so I left on the table, because of my biggest mistake…
What was it?
Not putting emphasis on retail customers. Like a lot of people, I didn’t join the biz to make a few hundred dollars a month. I was looking to build a huge network, create residual income, and go after the big bucks.
So I never wanted to bother with customers. Way back in the day, I’d even turn them away, telling people I only had time for serious business builders. Of course my team duplicated this same behavior. And that has cost me millions of dollars.
So how about you? Do you promote customer options for the people not interested in the business? What kind of culture are you creating on your team for a retail customer base? Please share your thoughts with the group
-RG
P.S Interesting watching the favorite trainer poll. People must be hitting their database begging for votes because last time I checked I was tied with one of those motivational guys that doesn’t actually work in our business. You can watch the results here.
Randy:
Right on! I have always been a proponent of promoting both the opportunity AND the product! Plus, If you build a culture of that everybody has retail customers and the company stays clean with the regulators. PLUS Customers = Business Volume = Checks!
Greg
Yeah, I’ve been there, where the product took a back seat to the business opportunity.
Now I help people save money, so my goal is to help as many people as possible during these challenging economic times.
I still focus on the business opportunity, because I also want to help people earn money too, but saving money is easier for the average person.
Retail customers are critical to any business. Network Marketing took a slide for the worst when we started promoting – No Selling! And went to strictly a “personal consumption” model for the masses.
Success, no matter how “small”, is important to the integrity of the organization. It takes time to build the skill sets needed for sponsoring, in most cases. So teach people how to develop some success and fund a marketing budget through retail customers.
Over time, some of those customers WILL join the business and may become your strongest business builder through a solid product testimonial and experience!
EXPECT Success!
Jackie Ulmer
I try to focus on our business as our products are viewed as expensive, but in the scope of NM autoships, we are right there.
I completly agree with you and it’s something I recently discovered. If you crunch the numbers and train your organization to get 10 to 20 customers, you’ll realize that most of your volume is coming from your customers, not your associates. Thanks Randy.
Interesting you should mention that.
I’ve built my fortune offer a customer base with a consistent 95 – 98% reorder & retention rate.
When I 1st saw my enrollers business report & saw that the business model I’m building consisted of real people ordering real products every month for years . . .in every economic cycle I was blown away.
You are right Randy, with the right business model not only is a consumer able to by wholesale each & every month for themselves but IF the product is priced right & superior to anything else they cam get in the marketplace . . .
Having ton’s of , you said retail customers, I prefer to have ton’s of wholesale customers that order month after month after month like clockwork.
That’s where my walkaway residual income has come from.
Great post.
DUH! Come on Randy! This is typical of the male mentality. Of course we promote our product to customers. Kim Klaver has known that one for YEARS! Plus, it helps keep the churn rate down. 😉
I was trying to do both, looking for business partners and for customers. But to be honest I looked more for customers, always promoting the products, because I was really healed by them, after being sick my entire adult life (for 40 years!)! But I didn’t earn big bucks! I wasn’t good in finding and keeping prospects actually.
Now, I still do networkmarketing for that company (of course!) but also give advices and guidance to people who want to improve their health some how. I know so much now, since my quest lasted 40 years!
So in both ways I can help others.
They come to me now!
Fantastic!
My website is not quite ready, but is almost.
I completly agree with that and it’s something I’ve discovered recently. When you crunch the number you realize that if you train your organization to get 10 to 20 customers, most of your volume comes from them, not your associates !
Thanks
Hi Randy,
I agree with you many times people push the customer away always looking for the one big fish.
I love the customers. They consume month-after-month and are not high maintenance and everyone once and a while you turn one in to a builder.
I think leading with the product and then turn customers into builders is the way to go! That is how we have built a 6 figure residual income!
I have always done both. One of the first things I learned was the importance of getting a paycheck for your team members as quickly as possible and the fastest way to do that is to encourage them get customers right away, which is instant cash in their pocket and commissions to follow.
I also learned early on that there are many people who will love and use your product, but only a select few who actually want to sell it. One NWM expert compared it to calling the cable TV company to order cable and in order to get cable, you have to agree to sell it. How many people would want to do that? That is how our customer feels when we try to force them into becoming a distributor instead of a customer.
I also learned that my best distributors were first my best customers who LOVED the products and told people about them anyway! I still get residual checks every month from my first company over 13 years ago because those people still love and use the product (and so do I)!
Companies can also help by structuring their comp plan to reward getting customers with great commissions, bonuses, promotions, etc. A really smart company will have a customer loyalty/perks/rewards program that provides a way for a customer to get discounts and perks without being forced to become a distributor. Our company does that and it is brilliant! It is so easy to get customers that way and earn a great income + bonuses without ever sponsoring a single distributor!
The customer strategy only works if your company has a valuable product or service that people want to buy if they are not being paid as a distributor to do so!
I like to lead with the product, and as I’m filling out the order form when my customer gets to the sections asking for their SSN, they ask “what’s that for?”
Then I mention to them “that’s if you want to receive a check for helping us refer other customers. It’s free to you as a customer to receive a referral bonus for helping us gather more customers. If you don’t want that check just put my number in there and I’ll take it.” (Fear of Loss)
Now this really gets their attention and they want to know more about the business side. They see how easy it is to qualify and get excited.
The coment Ronald left was good.Thanks
Many of my better distributors came from my customer base. Good customers fully believe in the product! Because I had lots of customers, I got a reputation in the valley of serving my customers well. As a matter of fact I still serve a couple hundred customers from my old air purifier business. They hardly believe I am still servicing their products 14 years later, and I do it at cost. Good service gets referrals, repeat business, and trust . My reputation preceeds me in our Treasure Valley. Thats how you build a business…one customer at a time.
I have taught my team from day one, RESIDUAL income creates the walk-away-from-your-job freedom. So enroll people at the level they’re comfortable. Customers are great because they use the product and create residual income. Some customers will upgrade to the distributor package.
Newbies to MLM sometimes get discouraged if they are taking a “long” time to reach their first promotion. If they’re receiving a residual (AUTOMATIC) check each month, they’re more likely to stick around and build the leadership skills necessary to attract and grow a team of distributors, which will make that check grow more quickly.
Teams that have a healthy number of customers tend to be more stable, because people are excited when they receive a check… especially when they receive an override on someone else’s work. “I don’t know them, but I love them anyway!”
Recently our company increased the customer volume requirements to promote to the upper-level ranks. I applaud it, because it will lead to more stable and more profitable organizations.
Hello Randy I see the business differently, my priority is to get people who do use the product and then see if they can adjust to the idea of building a team!
Who better than a satisfied product consumer?
And as a promoter, who is learning the ropes, I can share what I know with them.
Randy,
The transition is the key. The small biz model is pitching product hoping for a positive product reaction that allows a transition to the business. The big business model is the reverse, offering the opportunity with a transition to the product. The transition needs work…. or is a lot of work… or you lose both the customer and the business partner. It is far easier to do one thing. Pitch product and let the business sort itself out or pitch the business and let the retail sort itself out. Clearly the most successful people are in the later. However if there were some ‘transitions’ that made the difference, THAT would make a difference. Too often the transition comes off like manipulation or a hidden agenda to people. There is a skill set here to be uncovered, revealed and taught.
I agree 100% Randy! A wealthy entrepreneur once taught me, in essence, “Never turn down money. You will never go broke making a profit on each transaction.”
Michelle Sanchez did a great job of summing up Kim Klaver’s position on building a solid base of product users in the previous comment. The cable TV installer analogy is a good one.
Happy product-users are the most convincing sales reps. What better way to find them than by exposing as many people as practicable to your company’ products? Then, those who want to become distributors will self-select.
It helps when you have products that are a screaming bargain and of better quality than any others on the market.
Thanks, Randy, for bringing up this key business-building point. You got my vote as top trainer, BTW.
In order to succeed, we must admire and respect every “adversary”, no matter how big or how small he or she it is, because every single one of us has something important and unique to share with human kind and the whole universe.
Never forget who you are and where you come from.
I also have learned the hard way, and now I give people two options: use my product and feel better, or learn how to earn profits going to you instead of the company.
Randy:
When you started with your new NM company, did you led with the business or the products?
Where do you put your emphasis?Do yo present the business and if they are not interested, you tell them about the products?
Yes I still definitely lead with the business first and get customers from people that aren’t interested in that.
-RG
Thanks Randy:
I rather be making the money you are making with the way you have built your business. you must be in the top 0.01% of the top earners in NM.
Since I am not interested in fancy cars,clothes and homes,I would be happy with clearing $12,000 per month month after month and going back to Nicaragua where I grew up and living by ocean in a modest home without any responsabilities.
I personally when I first got into MLM about 4 years ago would only lead with the product primarily and it was way easier to recruit customers than business builders, but I could never get duplication after almost 8 months. This when I quit MLM for almost a year. Finally, got back into it and then I quit leading with the product and that is when things picked up, but still had problems with duplication. This is when I realized that it wasn’t about just bringing people in, in large numbers, but bringing the right people in. Now that I get that I feel like for the first time in my network marketing career, I can now make the big bucks, but as you say it’s still a 2 to 4 year plan. With that being said, I would never turn away a customer. Many if they like the products, may want to refer others so they can get the products for free themselves. I wish I was getting income from Hollywood for all the great movies I’ve referred others to.
I TOTALLY agree with you Randy! The supports the other, and vice-versa. A complete recipe for success!
Correction on the poll: I just voted and you are now in the #1 spot! : )
Gina
Thank you for sharing with us that simple rule .
In my organization like in any other network marketing organization
more that 80% are happy custumers that where the money comes from
and like you I almost forgot sometimes that they are the lifeblood of the business.
Great Post
sincerely,
Sergio Ervini
Wow! Do you mean 80% of your business is from just customers? Or is that what it ended up being after some want to be distributors decided not to work the business? 80% seems to be a number larger than I would have normally thought. Interesting. Your product must be good and fairly priced.
hi randy
I am doing both, customer based and recruiting. I believe the product is the star. So i believe it s important to let people know about the products. This allows me to generate some regular volume when they are on autoship.
Hey RandyGage,
As i see in some companies, in some bankes,the most of buseniss organizations
prefers the persones who bring the big money, more than the retailer
when you dedicate the most of your time fore the littles retailers, you miss
the big ones whith the real money.
Don’t be sorry because you might missed some revanue in the past time.
Live the past time to the past. There is a saying like this “:Do not sorry on milk that spills”
Hello mr.Randy G. Spored moia sponsor,moiata greshka e che se zanimavam mnogo s prodajbi na produkti,a ne gradia mreja za bussnes.Mnogo nauchix ot Vas i zatova Vi obojavam.Vie kazvate che za tezi godini samo gradixte mreja i tova e greshka,zatova Vi naricham moia trenior-Vie ste silen v gradeneto na mreja.Vashata greshka sa moite urotsi.Kato rezultat triabva da varshim i dvete-prodajbi i mreja.Ne darja na tova kolko bonus ste polucha ,a kolko xora ste zapisha za da imat otstapka pri polzvaneto na produkti,da sa po zdravi…Greshkite si prilichat.Dovolna sam v tazi rabota imam mnogo priateli…sardechen pozdrav ot Greece…
I think you have to use your intuition and ask a few questions to decide whether to lead with the product or the business. Many people are allergic to the thought, even, of selling a product, so it’s no use to mention it to them. They may, however, be good candidates to hear about your product.
People who are already in business for themselves would be ones more likely to be open to a new opportunity to make extra money.
One way or the other, it would be foolish to leave all those potential sales unclaimed by focusing only on looking for business-builders. Like you say, Randy, it adds up as your example is followed by your team.
You got my vote, for favorite trainer, too. Lots of good ones, but your sense of humor and style of delivery put you over the top in my book.
Randy, I am glad that you brought this up and quantify the value of retail customers. While we want a perfect, hands off model, the hands on retail process will provide us an increased base of word of mouth marketing. Repeat retail customers are the best proof that the products are worth the $$.
I’m pretty new to MLM and was seeing myself like a child with absolutely no fear when it came to approaching people UNTIL I began feeling rejected SO HUGE by some of my very close friends, as well as my family and relatives, when I talked to them about the business, with an intention of getting them into my yet small organization. However, introducing the products and showing people why I think the products are good is very easy, since many of them know that I’ve been in the industry and trust me and listen to me. In fact, with no efforts on my part, I seem to be able to lead them to the point where they begin to show a great enthusiasm about the products. As for me, because I’ve been in retail/wholesale skincare-related product industry, it seems a lot easier, and I feel less burden when I would approach people to get them to buy the products. Once I tell them about why I think the products are good especially for the middle-aged women group to help maintain their youth inside and outside, then, they are the one who actually get crazy and approaching me with hundreds of questions, instead of me chasing them. This is a new industry (MLM) for me, and I’ve been contemplating as to how I could lead them to the MLM from the retail base business. I’m hoping I will be able to gradually learn the skills to meeting many new people who are interested in my MLM company’s products and to develop many one-to-one good relationships with them which I think is a must for the the MLM business. Although there seems to be many methods of approaching the MLM business such as through the Internet, but I do believe that in general people still tend to trust and are comfortable dealing with people in this type of business on a one-to-one personal relationship level. If anyone could give me some brief advice in terms of how to approach from the retail base, that would be very helpful and that I will be grateful… but if not, that would be fine. I will be somehow able to manage in getting better at it as I continue to work in this new industry, I think. 🙂 Thank you so much! si.insf
Randy,
I voted a few times, and each time I saw you being the No. 1 MLM trainer in the industry. Yes, No. 1. That’s awesome, Randy! I’m very happy for you, since you’ve always been my best mentor/trainer.
si.insf
A great reminder. In order for us to row a boat forwards 2 oars need to be in the water – one for retail and one for recruting 🙂
Great post Randy, and I’m proud to say I have a multitude of active ordering retail & wholesale customers. Every time I share my business & it’s product, I have unwavering belief that everyone will want to be a distributor, but I do not fall in love with the end result. I ask them a couple of simple questions (I’ll keep it generic here): can you see yourself using this? How much? Do you think you would tell others about this? Their answers lead them to the initial package (retail, wholesale or distributor). I would rather them sign up as retail and start using the product, then sign up as a distributor and do nothing. Everyone is happier that way, and across our organization we see “upgrades” to distributor all the time.
Network Marketing thrives on the distribution of products. Without them, we might as well just be operating pyramid schemes.
If products are not sold through the relationship marketing model that we MUST adhere to, (Find some loyal customers and introduce this to others [who find loyal customers]) our companies will crumble.
Great post, Randy!
You are correct Randy.
In the Traditional business and our unique business MLM/Drect Sales,
the focus should be on customers and then business partners.
Most people fail in MLM/Direct Sales because we get excited and need buisness partners to move up the ladder in the compensation plan.
Your customer base is essential for success.
-DG
My biggest mistake was I was focusing mainly for customers and I forget what is important in MLM:…
I was the Taiwan Managing Director of one of the biggest MLM company in the world. Over probably 15 years ago, our company invited you as a special guest speaker and I was horrified to hear you talk on this topic. It is good that you finally woke up and now believe in the importance of selling as you do influence many people. Well done.
Very true. I think there’s a happy medium though. The first company I was with had such a high quota for retail that it became a full time job. That’s also not very productive as there’s no time left to recruit and build the team.
Personally i like to be able to make some profit on retail if I choose to but not to have to do a ton of customer follow up just to pick up my cheque.
Thanks for taking the time to discuss this, I feel strongly about it and love learning more on this topic. If possible, as you gain expertise, would you mind updating your blog with more information? It is extremely helpful for me.
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