WHO TOOK THE "NETWORKING" OUT OF NETWORK MARKETING?
And Why Distributor Web Sites Don't Produce Good Sales Results.

by Dan Hollings Copyright 2005

This is a topic that effects millions of independent business owners (IBOs or distributors as they are called) worldwide, and unfortunately more often than not, in a negative way. Maybe this article can help.

My name is Dan Hollings. My work and experience for over 10 years has focused on helping dozens of MLM companies and tens of thousands of IBOs, distributors, network marketers and small business owners in their online endeavors. I'm often considered bluntly honest about the realities of network marketing online and sometimes people "in the business" find my comments hard to swallow. Perhaps my resume will help, perhaps not: http://aboutme.dan.hollings.name

Buckle-up, this is the way I see it and the curves in the road ahead (and this article) will certainly throw many of you off your seat.

HOW COULD SO MANY GET IT SO WRONG?

Network Marketing online has so missed the mark, one wonders how so many people and so many companies could have it so wrong. Typically one does the obvious w hen seeking solutions that work online; they follow the leaders. It makes sense to observe companies like Amazon, Netflix, Google, or for crying out loud JC Pennys and adopt or adapt winning concepts to your model. But not network marketing companies, they march to a different drummer and relentlessly continue to push a square wheel uphill, when the smarter companies use round wheels going downhill.

The crash-and-burn examples I've studied are far too many to cover in one article, but let's look at a few.

Network marketing in its purest form was built on the principle that one tries the product first, they fall in love with the benefits or results of the product, and they are so enamored with the product that they find themselves wanting to tell other people about it (ie: word-of-mouth). However, in network marketing the model provides a way to earn money as you tout the benefits of your product with countless others. Simple.

The more people you get excited about your product, the more people that want to buy it and share it As more people buy and tell their story you make a little off a lot of peoples efforts and merrily, merrily, merrily, merrily, life is such a breeze.

THE LEFT TURN THAT TOOK US DOWN THE WRONG ROAD

Suddenly, the internet was born and MLM moves online with great expectations. Instead of "networking" and "sharing the product" or adapting to the new medium, we get the biggest left turn in marketing that anyone could imagine. The age of super hype, business opportunity lead generation, mass mailings, recruit & forget, and bad PR is upon us. And when the biggest company, Amway, made their "Quixtar" entry in 1999, what was already on a bad track seemed to derail.

Of course the company press releases don't read that way and it's hard to get the aspiring networker to tell it like it is, but as you read on, you'll find it hard not to shake your head in agreement (at least occasionally).

What do we see today? On virtually every IBO or distributor web site (and I've evaluated over 115 o f them in detail) we see "BUSINESS OPPORTUNITY", "MAKE MONEY", "FIRE YOUR BOSS", "IT'S SO EASY ANYBODY CAN DO IT"... we've all seen it, it's everywhere. On some, it's even hard to determine what the product or service is. If you're lucky enough to figure out what they sell and you're determined enough to plod through check out, guess what hurdle comes next?

MLM companies, by-and-large force new customers to "join first", that is, become a member or distributor BEFORE they've even purchased their first product. Yes sir, it's proudly built in to the shopping cart check-out process on the majority of MLM sites. Can you imagine trying that offline? Jump in the Chevy and head up to your local grocery store to buy a bar of soap. Next go up to the checkout and imagine them forcing you to become a soap salesman or start your own grocery store chain BEFORE you even checkout. If that were not deterrent enough, some sites even require the customer to sign-up or obtain a secret passcode just to look at the soap! Jeff Bezos, would be librarian today if he had put a "password entry only" sign on Amazon.com.

It doesn't work.

YOU GET WHAT YOU ADVERTISE FOR...

After setting up shopping carts and distributor sites for literally tens of thousands of IBOs, including many known (and unknown) companies, and from asking distributors in my internet classes about their results... here's the sad truth: with few exceptions, no one in network marketing is sustaining an profitable online business where products are sold through the distributor or IBO sites to regular customers secured by commonly used online marketing techniques. In fact, I know of no example of a network marketer that makes more money off his or her pure internet sales than he or she spends on the site itself. Whoa, you might want to re-read that one.

In a nutshell, I'm saying product sales aren't happening independently of recruiting people into the business. And unfortunately, because of the hype about "how easy the business is" and "how anyone can do it ", the primary type of online recruits one gets, are often not the type that are good candidates for running their own business. If you advertise for people that can make money "doing nothing" you'll attract recruits that join expecting to make money "doing nothing." I'm not sure who came up with that ad strategy, but let's dump it, OK?

NO SALES AND NO TRAINING

You immediately wonder why such a failed system would continue to be used? Perhaps the companies in the beginning had high hopes of online product sales, but after a while when a flood of new product sales did not occur, some got comfortable with the revenue generated by selling these distributor sites as a "tool" and just left things as they were. After all, if 10,000 distributors pay $10 or $20 a month on a square wheel vehicle and never complain, that's $100,000 or $200,000 a month revenue booked to the bottom-line.

Another fatal flaw of the network marketing industry is training. I'm commenting only on how they train their distributors to use the internet. It is general policy or tradition that an MLM company does not do the bulk of "how-to marketing" training, that is left to the higher ranking distributors in the field. The company sets guidelines of course, but hands-on training is done distributor to distributor.

This would be fine, but online marketing came about rather abruptly and the 'old-school' trainers in network marketing could not keep up as the internet and technology evolved. There was just too much new stuff, new technology, experimentation and reliance on programmers not familiar with traditional network marketing concepts or how to apply them online. They industry at-large shot an arrow into cyberspace only to miss the bulls-eye and the target. Instead, they hit the distributors right in the wallet. Never has there been a better example of the blind leading the blind.

To think that Amazon.com would flourish in the pure brilliance of a MLM-like affiliate or associate program starting with a customer base of zero while t he biggest of the big, Quixtar slaps visitor password requirements on their IBO sites amazes me. Then if you manage to get a password you'll visit a site that predominantly pitches "the business" before it passes you over to the Quixtar.com site itself.

LET'S BUY SOME SOAP

Let me take your hand as we try to buy some soap at Quixtar. If you start at an IBO site (and there are many versions based on the Quixtar group you stumble upon) you'll eventually find a link to transfer from the IBO's site over to Quixtar. It's the route any IBO would want you to take, because otherwise you do not know the IBO's "ID number" and any purchase you make won't get credited to the "IBO" you're now "tagged" to.

In my example, there were some 9 clicks before I willingly left the "business pitch area" to search for my soap. Now we're at the Quixtar.com shopping site itself, where after more pitches on "the business" even me (an experienced web guy) had to click another dozen times as I browsed for their famous 'LOC' soap products. I finally gave up feeling like I was lost in Windsor Castle. Next I resorted to a search using their search box. I typed in LOC and was promptly dumped on their "Sun Block in a Stick" page, feeling like a stick in the mud I decided to try a Google search for LOC and ended up on an "Amway" site that had all the LOC soap products but no check-out button at all. I could not buy. Great, back to Quixtar...

I returned to Quixtar, thinking that maybe it was my fault because I should have searched for L.O.C. rather than LOC and sure enough I found the soap: 27 different varieties. I decide to explore the "L.O.C. Plus Kitchen Cleaner" (it runs $30.65, or about what my maid service runs). They offered a comparison showing how you can take the Quixtar L.O.C. concentrate and make 32 bottles of cleaner out of it (I assume by adding water) and save 10% over the cost of "Formula 409". Boy, that sounded like fun, so I'm off to checkout... only to find what looked like a job application form. Over 30 text boxes, pull down menus, checkboxes, password prompts, and referring IDs inputs. 13 input fields alone covered my phone number (made me feel like they planned to call me). I'm starting to think maybe "Formula 409" isn't as concentrated, but if I boiled it down for 20 minutes it might thicken up and in the end be good enough.

I scooted over to Froogle and had my "Formula 409" purchased within 5 minutes.

NOTE: for those that wish to check-out my observations in the above example, I started by search for a Quixtar IBO site on google. That alone was very challenging, but I found a few (this one comes from a group known as BWW or Bill Britt Worldwide): http://www.bww.com/PBP/Templates/Template7/FlashHome.aspx? siteid=615f38defb214135a4a895830153ddc4&DetFlash=true
(The above web address may truncate it is so long)

Don't you love that web address, I can see it on a business card already.

Next, you'll need to get in. Try it yourself. If you wish to time the process, you won't need a stop watch, an hourglass will do. You're on your own from there.

THE 13 DUMBEST THINGS ABOUT DISTRIBUTOR WEB SITES

OK, let's cut to the chase. Regardless of what you call them: IBO sites, distributor sites, replicating sites, associate sites, MLM sites or personal sites, here are what I call the 13 dumbest things:

1) Most sites mix the business opportunity with the product (often the opportunity dominates the site).

2) Most sites force membership upon potential customers who merely want to buy or try a product.

3) Site content is typically full of hype, especially in the opportunity content areas.

4) There is little ability for a distributor to differentiate his site from another replicated site.

5) There is often no way to build an opt-in list (a newsletter for example)

6) There is no forethought into designing the site for online marketing campaigns, that is, most sites are built with the expectation that visitors all enter from the home page and find their way. For example, if the site owner wanted to do a pay-per-click search engine listing, the site will likely not offer a good "landing page" to send visitors to.

7) Inadequate visitor or campaign tracking tools. Simple hit counters don't really help a site owner evaluate traffic campaigns.

8) Crazy URLs (especially web address links for interior pages of the site) are often three miles long. Trying to send a customer to any page other than the home page is a real challenge for many networkers. And if you do this, in some cases the site does not track the sale to you for proper compensation.

9) OK, sorry to burst your bubble, but those 10 minute MLM flash movies with exploding letters and the driving music are not increasing popcorn sales much less your product sales. 10) Purchasing opportunity leads is one of the worst ways to get traffic to your site.

11) Auto-responders? In most cases you "Ought-o-forget'em"

12) A site has little use unless you get proper training in how to integrate it into your online and offline business and you learn how to generate targeted traffic (preferably, customer traffic).

13) If your site requires a password for visitors and customers to enter, you may as well cancel it now. there are far better uses for that money and no store owner has ever succeeded by locking customers out.

What better place is there to network than on the largest network in the world: the internet. It's a world of blogging, photo sharing, social systems, discussion groups and more, all classified by the tags of Technorati to the keywords of Google. Yet, no one is "networking" in a true sense, in the online realm of network marketing. Sadly, most distributors are blundering and wondering.

Compliancy issues are looming over the industry as well. The FTC, consumer groups like Pyramid Scheme Alert (http://www.pyramidschemealert.org/), and grassroots movements like "Let's Get The Word Out" (http://www.letsgetthewordout.com) are applying pressure on companies and the industry at large to make changes. The "tools" part of the business has always been controversial and as Dateline NBC exposed in their year long investigation (http://www.msnbc.msn.com/id/4375477/), it's not a pretty picture.

Changes are needed and changes will come. A shining light in the "tools" fog may present itself by the summer of 2005 from a Salt Lake city company, Brookline Technologies, Inc. They are already immersed in the industry as an enterprise level genealogy or eCommerce/commission tracking company for global network marketing companies. They plan to release a suite of tools, starting with distributor web sites that will target compliancy issues, the existing pitfalls, and lack of internet training as discussed in this article. Yes, I've got a whip under their tail and a carrot in front of their nose. Unfortunately however, no solution trickles down to the street-level MLM'er unless their particular network marketing company adopts such a change. Perhaps they'll change on their own, perhaps they'll seek outside assistance, but change they must.

HEAR'S A TIP

If you're a network marketer, the onus is on you to help your company understand what it is you need. You might not understand all the reasons your business is not flourishing online, but a quick look at your bank account is all the evidence you need to prove it is not. I would hope that your upline or your company will not point the finger back at you or suggest that the internet is not a worthwhile way to build your business (you know, your site is mostly just for ordering or to send friends to), because it's not true. Online marketing does not replace offline; it complements it, but to scuttle the internet as NOT a viable way to find customers and sell product is, I have to say it: "stupid".

It costs far more than a $30 a year registration fee to be a distributor or IBO. An IBO site alone will average another $150 a year. Then the optional (or required) books, tapes, seminars, rallies, and voice mail systems get layered on top. Add your phone bill, office expenses, gas for your car, and the list goes on. If you cannot clear $1,000 a year in profits, you're in the hole. If your spouse finds out, you're also in the doghouse. But some will say, "I'm building a downline, I've already got 5 in my group, no business is profitable in the early years, and my upline already drives a gold plated Schwinn, yada yada yada."

Folks, there are many things you can do, online and off to make $1,000 or more in the first year and grow, if you're still spending more money than you're making after a year in the MLM business, maybe you're peddling the wrong bike?

If you truly believe in your product or service and it has brought benefits to you and your family; your enthusiasm and your personal story is a "marketing machine" waiting to happen. You need good tools, a good web site, and continuing training on how to make it all work. If you're not getting that, it's time to kick, scream, shout and rattle some cages. Other industries have figured it out, why not network marketing?

READ RELATED ARTICLE:
Quixtar IBO Quagmire Prompts Ponderings Upon Passwords

ABOUT THE AUTHOR Dan Hollings is a former university instructor who has achieved the highest ranks in Network Marketing. He is a formidable web technologist, systems developer, internet marketing 'guru', and consultant. As an advocate of positive business change in the MLM industry, he heads projects for clients like "Let's Get The Word Out" http://www.letsgetthewordout.com. And hundreds of thousands of distributors, dozens of MLM companies, trainers & authors have benefited from Dan Hollings' consultation, trainings and diverse web systems. BrooklineTechnologies.com provides web solutions based on Mr Hollings recommendations.