What This Blog Is About

What This Blog Is About

Most web sites and blogs about Direct Sales / Network Marketing / MLM focus overwhelmingly on the negative - what's wrong with it, bad experiences, scams, etc. This blog is different. While we discuss the Three Fatal Flaws and other problems with current industry practices, our focus is on positive and pragmatic SOLUTIONS.

Our Vision: To reform and transform this noble and time-tested industry into a positive force for good that powerfully and effectively serves and supports the best and highest good of people, community and planet.

Tuesday, July 14, 2015

Fatal Flaw #3 - Systems Don't Work

In the Direct Sales/Network Marketing/MLM industry, new recruits are told that simply following "the System" and talking to lots of people are all they need to do to be successful. Those who fail are often accused of not working hard enough or not "surrendering" to the System to the extent they should have.

This attitude is reflected by a recent roundtable of network marketing gurus who said, "Some Reps blame other factors when, in fact, they just aren't working as hard as they used to."

Baloney. The 98% failure rate for "Reps" has almost nothing to do with how hard they are working or not working, talking or not talking, surrendering or not surrendering. They fail because of a fatally flawed business practice called the System. 

What is The System?

The System is supposed to be a simple, duplicatable process for building a Direct Sales/Network Marketing/MLM business. In a nutshell: Sign up as a distributor, buy a few products, get a few customers, make a list of 100 friends/family/acquaintances, invite them to a meeting, present the business opportunity, sponsor a few to become distributors and teach them to do what you just did. Like a wave on a pond, your team will duplicate and grow exponentially, making everyone insanely rich.

Note: Some distributor organizations take it a step further and incorporate their training and motivational programs, web sites, books, DVDs, rallies, reunions, etc. into the basic System. These activities are completely separate from the direct sales company itself, and may become parallel businesses that generate more profit for the upline leadership than the actual sale of the company's services and products to customers. We will discuss this unethical, deceptive and unnecessary practice in another blog post.

Why Doesn't The System Work?

On the surface the premise of a simple, duplicatable System sounds reasonable. Many industries employ best practices and standard operating procedures to run efficiently and effectively. In practice, however, the System that's evolved and become almost universally accepted for Direct Sales/Network Marketing/MLM is fatally flawed and unworkable. How do we know? Because, if it worked as promised, we wouldn't suffer from a 98% failure rate and horrible reputation in the mind of the public.

First, Systems mistakenly focus on recruiting instead of customers. They forget that the main purpose of any business is to SERVE CUSTOMERS, because without customers, there is no reason for a business to exist. No valid and legitimate business anywhere on Earth prioritizes expansion over customers like Systems do, not even in the franchise world. 

Let's apply the logic of a System to a well-known franchise. You're excited about Subway sandwiches and decide to purchase a Subway franchise and open your first location. What do you do after opening?
     a) Make a list of 100 friends/family/acquaintances and persuade them to open their own Subway franchise
     b) Learn how to attract large crowds of satisfied customers so your business becomes wildly successful and profitable

The answer (b) is self-evident. Only after learning to build a successful and profitable franchise in one location would you consider opening other locations. Those of us in Direct Sales should do likewise -- there is absolutely nothing special about our industry that exempts it from operating like any other business in the world.

Also we should be aware that the Systems' almost single-minded focus on expansion (as well as the almost cult-like gatherings and exclusivity) feeds accusations of pyramids and Ponzi schemes. Direct Sales (person-to-person sales of services and products) is NOT a pyramid or Ponzi scheme but the perception of this behavior overshadows the reality.

Second, One-size-fits-all Systems go against human nature. The intent is that anyone, anytime, anywhere can plug in and duplicate themselves without any special training, experience, advantages or resources. It's a nice idea that just doesn't work in the real world.

Why? We're not robots. Not everyone wants or is able to do the same thing at the same time at the same pace and in the same way.

We must remember that people have different reasons for going into business and the specific goals they want to achieve. Not everyone wants to build a team. Some people want to make friends, have fun and earn as they learn. Some simply love the service or product and want to share the benefits with others. Some want to supplement their income with a few extra dollars. Some want a modest size business to reach a personal goal. Some want to build a world-wide empire. While Direct Sales is versatile enough to work for all these people, monolithic and inflexible Systems do not. Forcing everyone to function the same way sets them up for failure.

Author Darren Hardy, whom I respect and admire for his excellent book The Compound Effect, released an audio program targeted to the new network marketing recruit. In it, he parrots the System dogma by saying that we should forget everything we've ever done or learned or achieved, and simply follow the System and "don't mess with it." He exhorts us to don't think, just do. I completely disagree with his dangerously flawed advice. The proof is in the pudding. If blindly following a System was so effective, it wouldn't fail 98% of the time.

Besides, we are unique individuals. We have different dreams, goals and objectives. We possess an infinite variety of strengths, weaknesses, abilities, desires, backgrounds, skills, etc. Our differences define us and give us power and the ability to contribute in our own special way.

In the book The Go-Giver, character Debra Davenport says that "the most valuable gift you have to give is yourself." Another character illustrates the point that "All things being equal, people will do business with, and refer business to, those whom they know, like and trust." Author and master salesperson Jeffrey Gitomer asserts that our individuality is our competitive advantage in the marketplace.

Direct Sales is all about person-to-person business, building relationships and community. We cannot replace our empathy and uniqueness with a cold, rigid System and expect anything other than failure.

Another important point is that sales and team leadership are very different skills. People who can lead teams may not be good at selling services and products. People good at selling may not be good at leading teams. In the corporate world, few Salespeople make competent Sales Managers - they are entirely different skill sets. Perhaps that explains why the majority of successful network marketers are married couples, where the wife usually focuses on customers and the husband on team building; working together they cover both bases and increase their chances for success. Rare is the single person who can effectively master both skills.

There is nothing wrong with guidelines, best practices and standards for business operations and conduct. Our point is that no System, no matter how simple or carefully designed, can work for everyone, everywhere, every time. Nor is a System a valid substitute for years of hard work, sweat, tears, skills, learning and experience that come with success in the business world. Ask any entrepreneur.

In the New Paradigm, Systems do not exist. We focus exclusively on individual empowerment, relationships and community. We recognize that everyone is a unique person with unique dreams, goals and objectives. Training and mentoring is personalized and customized. We teach new team members how to design and create a successful and profitable stand-alone business by attracting and serving a solid base of happy, satisfied customers. Then, if they desire and when they are ready, to expand by building a team of their own. All is done in a supportive environment of joyful service to people, community and planet.

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