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Why such a large dropout rate in MLM???

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Re: Why such a large dropout rate in MLM???

Post by healthy4 on Tue Mar 09, 2010 7:09 am

I have to jump back in here and commend people on their great thoughts and add a little more myself. Yes people are going to quit. The question is can we do anything to reduce the dropout rate. I think the answer is yes but it requires some focus.

As noted by many we are running a business and it requires a proper business mindset. Anyone who has been in business, any business, or studied it knows that there is something that will kill every business. It is called re-work. I don't care if your building cars, fixing roofs, running a restaurant or filling a downline. If you have have a high rate of reworking the same item, be that a roof, fixing a car, a meal or filling holes that appear over and over in your downline, your probably going to fail.

Another very basic business principal is that you can't change what you don't measure. And the simple fact is most people don't track their attrition rate. Some probably don't even know how because they are not taught to do so. They can probably tell you their conversion rates from leads (which is good) and how many they have recruited but they never look at how many they lost. They are taught it is inevitable so don't worry about it.

We spend a lot to sponsor new people. Even if your using free methods your investing a lot of your time and I hope you think your time is valuable. We are not going to save them all, I know that. You also can't change the industry but you can impact your own business. If your attrition rate is 95 % and you can move it just a little, over a few years the added leverage and earnings you have will be enormous.

A business mindset requires much more than just determination. Wise and successful business people look at both past performance and what is likely to happen in the future. They look at both short and long term indicators. How much money you made last month or how many you sponsored in the past are measures of what has happened. Looking at your attrition rates and how many people in your downline are actually making money are predictors of what is likely to happen in the future. Not guarantees but predictors so you can take action.

I have rambled on enough about this but I have final thought for you to think about. All of those people who quit are telling a lot of other people about their "bad experience". Bad news travels awful fast and the negative image of the industry, your company and you continue to grow making your sponsoring efforts that much harder. Don't under estimate the power, good or bad, that the attrtion rate has on each of us.

Re: Why such a large dropout rate in MLM???

Post by richhazlett on Mon Mar 08, 2010 8:38 pm

I think a lot of people just join hoping that something great will happen, but they are not committed to making it happen. I saw an interview with Nathan Ricks and he made a good point that more than half of marriages end in divorce, so how we can expect our business to have a better rate than marriage?

Some people will quit. It's just a fact.

Not have ant IT basic computer skills made learning harder

Post by Barter Trader on Mon Mar 08, 2010 1:08 pm

I started paying to sign up on alot of MLM products only to get frustrated and lost with trying to understand how to do the most basic fundamentals. I was only use to surfing the net and sending emails. As a real estate problem solver the face to face contact was so easy, in assessing a persons position in life and seeing if there was an eventual pay packet in the dealings was basic. I saw a colleague struggle with a Barter Trade Dollar transaction and jumped on the opportunity immediately as I knew how it worked but needed to Brand the product to me "Terry Cuthbert as the Barter Trader". I have spent six months understanding the power of Facebook, Twitter and Google Blog but admitt I have alot I mean alot to learn. I have the basic fundmentals underway and feel I am on the right path. I am excited but can see why alot of people give up and get disillutioned, side tracked you name it but having mentors to guid you is the best. I look forward to contributing and sharing my journey as it unfoolds.
Volky wrote:I 100% agree with you.

I think often the dreams are not big enough to go the extra mile.

Yes, it is the same in gym and in mlm. No goal. No focus. And they give up...

So I started to talk not only with my prospects but also with my mlm team about their dreams and what happens if they donĀ“t reach and how they feel about it and what alternatives there are. And we repeat it and repeat it and repeat it so that nobody looses the connection to his dreams.

Re: Why such a large dropout rate in MLM???

Post by thedarkroom on Mon Mar 08, 2010 12:45 pm

1. Not telling it straight from start to the prospect and end up with numbers of people who do not do anything.

They then figured out "damn, it takes work, investment in skills and.."

2. Signing up someone, before they are educated on certain principles and what it needs from them to do, what it will take. The reason why.

I don't sign up anyone until they have gone through education, understood what it will take.

If that scares some prospects.

Good. No compromise on this from me.

3. Lack of leading the person to make money, and help them to focus on money activities and not busy unproductive ra ra activies. I found retention is more when the person sees they make money in the first month. Best in first week.

4. The Marketer hasn't signed up the person until this person has 5 customers consistently, signed up people, at least two, and they also have 5 customers. Most do not make money in the first three month to even 2 years and still wonder what to next.

5. Lack of serious skills. I don't know why some miss this one big time.

Adam Taha

Re: Why such a large dropout rate in MLM???

Post by rbragagnolo on Mon Mar 08, 2010 12:37 pm

There are a tremendous amount of great ideas, thoughts and opinions. I've been involved in a similar thread on LinkedIn and the answers from other people revolve around the same answers here.
Poor training,
looking for immediate gratification
get rich quick syndrome
out dated techniques
I would like to offer this link http://bit.ly/bF1Xmw to this video, it is pretty insightful when it comes to this question about
why people fail...and it kind of gives another viewpoint.
If you like it (or not) please feel free to leave a comment

Thanks
Ron

Re: Why such a large dropout rate in MLM???

Post by kstai on Mon Mar 08, 2010 11:46 am

There are many reasons:

1. Unrealistic expectation
2. Lack of training
3. Wrong mindset
4. The same reason why only small percentage of people are rich

Just my 2 cents

Ket

Re: Why such a large dropout rate in MLM???

Post by Landkare on Mon Mar 08, 2010 11:26 am

I believe the biggest reason people fail and drop out of their MLM, is a combination of several things. Most people jumping into an MLM opportunity do not realize Network Marketing is a real business. For some reason they are led to believe it's a pastime, or a way to make a whole lot of money in a short period of time.

They also don't have an entrepreneur mind, or any business skills. They don't know anything about business, or about running a successful business. More than likely they were recruited into their network marketing opportunity by a person who doesn't know how to find their true target market.

Add these 2 factors without the desire to become an independent business owner and you have just created a recipe for network marketing failure.

Anne Theriault (KareMLM)

Re: Why such a large dropout rate in MLM???

Post by RichardBravo on Mon Mar 08, 2010 9:02 am

.

I think another aspect of the "quitting" syndrome is that today's society has been cultivated on an instant gratification mindset.

Everything is now. Everything is fast. Everything moves at HighSpeed!

So many people carry that mindset with them in everything they do and you can see it very clearly in just about every aspect of modern culture.

Here's an example ...
There's this little ski resort town just up the canyon from where I live. It takes all of 10-15 minutes top to get from one side of town to the other. Yet, every time I go there (I used to live there and have to go there for business, etc., from time to time) anyway, everyone is always pissed off and whinny about traffic and how long it takes to get anywhere. HA! I'd love to see these people on the 405 or the 5 during rush hour.

Or fast food ... have you ever seen people in line at a fast food joint get all upset about how long it takes to get their meal? What a joke!

There are so many examples, but the point is that people have been programmed to expect things RIGHT NOW. And business is no different.

The vast majority of the population has this idea that money just grows on trees in the business world, so when they join they expect instant gratification ... instant money, fame and success. And why wouldn't they - I mean all these teen music video stars did it - right? All these super athletes did it - right?

What people fail to understand is that the end result, the success, the tangible manifestation they see is the result of years and thousands of hours of hard work, practice, personal development and constant refining and cultivation of one's craft. All they see is the bling in the video and think - Hey I want some of that too!

But as we all know, that isn't reality ... maybe a reality tv show - but it sure as hell isn't real life.
And in the real world it takes perseverance, dedication and discipline over an extended period of time to create a successful business.

And that is why so many people quit in my observations ... they haven't invested enough in themselves to create the personality it takes to see that process through. They're stuck in the TV land idea of what life should be like.

It's sad really, but exactly why there will always be a very small percentage of the population that ever truly sees success and financial gain in their life.

Unplug & Gitter Done!
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Re: Why such a large dropout rate in MLM???

Post by Bill N on Mon Mar 08, 2010 8:52 am

People make the mistake of thinking a prospect is a team member simply because they signed up. WRONG

A NEW SIGN UP IS SIMPLY A HOT LEAD- It is yet to be known whether or not they will prosper in the team.

Re: Why such a large dropout rate in MLM???

Post by EricaV on Mon Mar 08, 2010 8:31 am

Hey Palma and BNers

I think that sites like this one and other educational ones are going to slowly change the failure rate. Sure there will always be the lazy ones that fail but the true entrepreneurs out there with solid goals, determination and the willingness to learn will succeed if we can get them the right information on how to do that.

It's been the blind leading the blind for so long now that the new people coming in are more likely to come across a person with no leadership skills and no real education then a real leader that they can learn to build a real business with.

A better education is needed to turn this failure rate around and being part of this site and sharing what you know with others in the industry will help us do that.

By helping each other today, we are helping future networkers too.

Cheers!
Erica

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