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Old-School MLM is Dead in the Water. But Who or What Killed It?

The promises of old-school MLM and “life-long” residual income are all but dead for the average person. They have been cut down at the knees by an unlikely culprit who we’ll reveal to you in a minute. This Letter Tells All.

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Archive for March, 2010

And so to “Online Business Myth 1″.

Sorry to burst your bubble so early in the piece, but such a business simply does not exist.

If you have been involved in the home business industry in an MLM or Network Marketing before, no doubt this was almost the first thing your ‘sponsor to be’ said to you. By the way, usually this person is quite new to the industry themselves (they tend not to hang around too long before they discover that they too have been mislead, or they have maxed out their credit card – whichever comes first).

This is how it all begins. You will be shown the product range. You will be told that the products are “revolutionary”, “life changing” and “so powerful that everyone will be knocking down your door to get their hands on them”.

You will be told that even with absolutely no previous experience of any type in business it is possible for virtually anyone to build a residual income by “sharing” these products with anyone and everyone you come into daily contact with.

But I’m getting ahead of myself here, more of MLM style “marketing strategies” in Online Business Myth #2.

There are many reasons why people are attracted to this industry. These might be some of the very same reasons that you are looking.

The promise of making money from home.

Sacking your boss.

Choosing when, where and how much you work.

No more office politics.

No more commuting.

More time with family.

More time doing the things you love.

Achieving financial security.

These are all highly valid reasons for wanting to pursue this as a business. Unfortunately, these benefits are almost always combined with marketing strategies which lead prospects to believe that the business is easy.

The marketing tends to focus on the income claims of the top earners (and these people usually represent about the top 1% of the total number of active consultants in the company).

And so now you are to believe that not only is the business easy, you need no previous experience, and only need to do the minimum amount of work to realistically generate a six figure income at lightening speed.

Now, what this style of marketing does, is attract the wrong type of people to the industry in the first instance. People who are looking to “get rich quick”. People who have a “lottery mentality”. People who expect that the money will come flooding into their bank account by osmosis.

People who think that any legitimate business can be built this way should not even be considering self employment.

The simple fact of the matter is that in many ways, this business is even tougher than a “brick and mortar” business.

Just think about it for a moment.

Let’s imagine that you have opened a shop in a busy part of town. You lease a building, put up signs, bring in stock and then advertise your new business.

If you have done your market research well first, you will have positioned your business in a place where your niche market is likely to be walking past your shop every day, and there is a pretty good chance that at some point, they will walk in your front door to see what you have to offer.

Not so in a home based business. There is just you, your phone, and often a cupboard chock full of your ‘life changing’ new products.

No boss to answer to.

No deadlines (except perhaps those imposed by your bank or lending institution).

No daily routine to work to.

No need to even get dressed if you don’t feel like it.

It may all sound idyllic, but it takes a particular type of drive and discipline to build a business out of nothing under these circumstances.

My experience has been that people who have had previous business experience in either brick and mortar or MLM have a far greater understanding of the consistent and focused effort that is required to build a business. People who have been career employees tend to find the learning curve far steeper.

So if you are looking at a “business opportunity” and it all sounds too good to be true, keep looking. Because if it sounds too good to be true… it is

by Alison Bova

In 1903 Orville and Wilbur Wright were struggling to fly the world’s first airplane at Kitty Hawk, North Carolina. At the same time another man, Samuel Pierpont Langley, was also trying to build an airplane — with the assistance of an entire staff.

His assumption was that if he put a big enough engine on the airplane, he could get anything off the ground. He focused all his effort on that one project: creating a super-powerful engine for the plane.

The Wright Brothers’ approach, however, was to build a glider that would glide from a hilltop with no engine at all. They focused their energy on (finesse), balance and steering — power was almost an afterthought. Only after it worked with no power would they try to put an engine on it.

After three years of tedious experimentation the glider was working well, so they commissioned bicycle shop machinist Charlie Taylor to build them an engine. It was the smallest engine he could design — a twelve-horsepower unit that weighed 180 pounds.

Needless to say, the Wright Brothers changed the world and became famous historical figures, while few have ever heard of Mr Langley. Their approach of making the plane fly before applying high power was the superior one.

“Langley had spent most of four years building an extraordinary engine to lift their heavy flying machine. The Wrights had spent most of four years building a flying machine so artfully designed that it could be propelled into the air by a fairly ordinary internal combustion engine.” – Smithsonian Magazine, April 2003

There’s a direct analogy to your success in network marketing here. Your advertising budget is the engine. Your sales and marketing system is the glider.

An engine without a good set of wings will not work. But when you put an engine on a workable glider, you have a plane. When you feed customers to a sales and marketing system that can “fly,” you have a business.

If you have an effective sales and marketing pipeline that simply lacks customers, you have a glider; just apply a lightweight engine (read: sensible marketing budget) and it will soar. But if you have traffic that’s going to a lousy or non-existent sales and marketing pipeline, you don’t have a business. You have a money pit.

Here’s the lesson:

Money can bring you a lot of traffic, but it’s only valuable to the extent that your sales and marketing pipeline is designed to convert the traffic to leads and sales. It’s about lead conversion. You grow your business by having a quality system. So as you’re getting started, marketing methods such as Google Adwords are like a lightweight engine that you can turn on and off instantly. You can test your glider safely without crashing, without killing your momentum, without burning through a lot of money fast.

This is the lesson that network marketing casualties learned the hard way. We were a lot like Langley. We focused on the engine instead of the wings. When it didn’t take off, we just poured more gas into the engine (bought expensive leads, paid for expensive newspaper ads, conventions). When none of that worked, we thought we’d put it on a rocket launcher and force it up into the air (we were going to hire a copywriter to design a system for us for $US60,000).

Thank goodness we found CCPro before we went to that stage! Think of all those companies with their “platinum leads”, their useless cookie-cutter websites, their pills & potions. Their exotically named products, their empty promises, small checks and their fast-folding downlines. 97 percent of distributors make a beautiful arc, smash into the ground, and explode in a ball of flames.

And you know what’s interesting? Some never see the crash coming. Some never trace the arc and wonder why they’re not gaining altitude.

Our friends in network marketing, great people, hard workers, are quietly digging themselves into a deeper hole as their company and its heavy hitters feed off their labor and dreams.

Laughing all the way to the bank.

While we continue to wonder how it is that a company can present as “an opportunity” something in which at least 97 percent of people will spend more than they earn. Not to mention the toll it takes on their self esteem, energy and lifestyle.

And the companies seem genuinely surprised when people claimthe “brick” they were sold, won’t even make it off the ground, no matter what size engine you put on it.

We on the inside, at CarbonCopyPRO, are never surprised.

What are you waiting for? Give yourself some wings.