Food for thought

Richard Poe, in his book entitled "Wave 3: The New Era In Network Marketing" explains the evolution of network marketing in terms of the expertise and resources needed to do the business. At first, during "Wave One", the industry struggled for acceptance as a legitimate way of doing business. It was new and no one understood it. People by and large looked on network marketing as a scam. When it was ruled in 1979 by the Federal Trade Commission that Amway was a legitimate business, and not a "pyramid scam," this first chapter of network marketing history came to a close.

During the 1980s, the computer revolution and other enabling technologies led to "Wave Two." Millions of people came into the business, joining the thousands of companies that started up during this period. This was the era of opportunity meetings, and many people became very successful in the business. The trouble was, because meetings played such a big part in the business, success almost always required skill in public speaking. Also, during this period, distribution had not become as efficient, and distributors with large organizations had to physically stock and distribute a lot of products. This required capital and organizational skills. So during the "Wave Two" period in network marketing history, successful distributors had to possess many skills that most people simply do not have.

Now we are in "Wave Three" of network marketing. This period is distinguished by the fact that innovative companies have realized that simplicity is the key to the business. These companies have harnessed technology and developed systems that enable anyone to be successful in network marketing as long as they are willing to work hard and follow the system. No special skills or resources are required. New distributors don't even have to make their own presentations. They can lend videotape presentations to interested people, or get their prospects on a 3-way conference call with an experienced distributor in their upline. They can utilize company-sponsored conference calls and satellite broadcasts, or distribute audio tapes produced by their upline or by the company. And there is no longer any need for distributors to keep a lot of inventory on hand. They simply show customers how to call a toll-free number and have products shipped directly from the company.

Along with new innovations that help anybody, regardless of their skills, to become successful, has come an accompanying shift in the basic approach to the business. Back in the old days of "Wave Two", with the emphasis on meetings and physical movement of products, it was important to develop "heavy hitters" -- pros who could fill auditoriums and give slick presentations. Companies structured their compensation plans to favor these skilled professionals. Distributors were strongly encouraged by upline to become big time business builders. And this turned off many ordinary people, souring them on the business.

The fact is that most people simply don't want to be high rollers.

"Wave Three" companies realize that fact, and build their systems to respect the diverse individual desires of all their distributors. Progressive companies are realizing that the secret to long-term success in network marketing is to have a lot of people, each doing a little bit. Companies are realizing that the "preferred customer" distributors, those people who become distributors just to get a discount on the products, are the backbone of the business. Heavy hitters, who can instantly deliver a downline of thousands, can exit just as quickly as they enter. A downline built by slick presentations and go-go business builders is not nearly as stable as a group built by people sincerely recommending to their friends products that they themselves use every day.

And so the smartest network marketing companies set up systems that honor people at the level those people want to be at. Systems that enable the ordinary person, who is afraid of public speaking and not really willing to do a lot of hard core recruiting, the opportunity to be comfortable. The more comfortable people are, the more likely they are to recommend the products and the business to the people they really care about.

Think for a moment about quality versus quantity. Those are basically the two choices in doing this business.

The quantity approach is to simply fill your downline with as many warm bodies as you can get. You do a lot of advertising, maybe some spamming on the Internet, send out direct mail. And you hope that from all that activity you get a percentage return and eventually a big downline. The problem with this approach is that people generally work the business the way they see their upline work the business.

So if you do a lot of advertising and mailing, the people you sponsor are going to think that is what they need to do to be successful. Now some people may have the expertise and the resources to put together an advertising or direct mail campaign, but most people will not. And in many cases they can rely on you or the company to do this for them, at a price. But in this whole approach the product gets lost. People who come into the business from flyers or ads or mailers are almost always more interested in the opportunity than the product(s). That's just the nature of the business. People respond to opportunity offers from strangers, but they don't generally respond as well to product offers from strangers. So the distributors that come in through the "quantity" approach are simply not that committed to the product(s).

What does this mean? It means they are not as likely to buy and use the products themselves. This is a double whammy because, number one, they're not adding much to your group volume, and number two, they have trouble selling the products to anyone else if they themselves don't use them.

The alternative is the quality approach. With the quality approach, your goal is to work with the people you sponsor to ensure their success. Obviously, with this approach, you can't personally sponsor as many people as quickly, because it takes time to adequately develop and train each new distributor. But if you take the time to ensure that the people you sponsor are truly committed to the products and to the company, and you make sure that they taste some success and understand the potential of the business, and you help them to get some good experience at working the business, then you set yourself up for long term success.

All of this requires picking a stable, financially solid company in the first place. A company that is going to be around ten, fifteen, twenty years from now. Because the only way you can motivate yourself and others to work for long-term success is to be confident that the rug won't be pulled out from under you after a lot of effort.

Many people are content to go into the latest opportunity, the one with the best "story of the day." These companies shoot up quickly like a bottle rocket, and some people make a lot of money real fast. But most of them sputter out and fall even more quickly. And even if you do make money in a situation like this, when your downline gets left "holding the bag", when they've invested time and effort and never do see a return from it, you lose your credibility. You can't just switch them all over to the next "hot" opportunity. It becomes a lot harder each time, as you lose friends and credibility along the way.

How do you know if you're in a "Wave 3" company right now? That's easy. If, after reading this article, you send a copy to everyone in your downline, then your in a "Wave 3" company. If you find yourself defending in your mind against the things I've listed, then you're not in a "Wave 3" opportunity.

(Note: "Wave 3: The New Era In Network Marketing" by Richard Poe, is available in larger book stores, or you may order directly from the publisher, Prima Publishing in Rocklin, California, USA, at +1-916-632-4400. The price is $14.95.)