7 Days, 7 Insider MLM Secrets – Day 4

by louabbott on July 3, 2010

Do they like Network Marketing and network marketers

The Critical Success Factor that Can Keep You from Losing Your Residual Income in a Heartbeat.

We have already covered how critical working with the right company is.  If you ever hope to achieve . . .

Reliable, Long-term, Leveraged, Residual Income

I also reminded you how partnering with the right company was very much like drilling for oil. If you are not in the right place, you will only be wasting your money, time, skills, reputation, energy, and chances for ever realizing your success and dreams.

Then, I gave you Critical Success Factors 1 & 2 of The 12 Critical Success Factors™ to help networkers know if they are choosing, or have chosen, the right company partner.  This is also extremely useful to build appreciation in your organization and prospects if you are with one of the few good companies out there.

Today’s Critical Success Factor is so important that it deserves its own Day…

Critical Success Factor #3: Strong Management

This may be hard to judge because it can sometimes be difficult to get the information you need. But it is absolutely critical!

“I really studied the MLM world before I joined my most successful venture some years back. I also learned enough about Internet marketing and direct marketing techniques to grow my business to about a $20,000 per month check! People were actually finding my sites and coming to me. Talk about a networker’s dream come true! It looked like the promised income would just keep coming and growing.

“Unfortunately, the dream turned into a nightmare due to the company management making some serious errors in judgment. They, by their tacit permission, allowed health claims that were illegal, and the FTC walked in to the home offices one day in June of 2003, confiscated all the files and locked the doors. The company ultimately settled with the FTC but not before my check- and most distributors checks- dropped 75% or more!” –Tricia Bard, FL

Obviously, and as in any business, management can kill the business if they do not do their jobs well.

Here’s what in particular to look for on the management team, and what to look out for:

First, make sure you can find the names of the owners of the company.  This is hard to believe for me, but I see new “Business Opportunities” open every week where I can’t even find the name of the owners, the company location, or a phone number for them.  Give me a break.  Do people really think they are not going to get taken to the cleaners?

But assuming you can get that information, look for owners/CEOs/Presidents and top management that have experience in running medium to large Fortune 500 types of companies.

  • What have they done in the past?
  • Was it successful?
  • Are there solid business credentials?
  • Do you get a good feel from them?
  • Do they like Network Marketing and network marketers?
  • Do they seem like people of integrity that you would trust with your future and the future of the people that you bring into the business with you?

This last point on integrity is absolutely vital. Here’s why. Too often, the management has no loyalty to their independent reps or distributors. Just as in corporate America, where we have seen companies lay off people who have been with them for years to ease the strain on the pension plans, the same types of things happen in M.L.M.

  • Some companies have practiced wrongful terminations on trumped up grounds in order to just stop paying some distributors.
  • Some have changed their compensation plans so many times that it killed all of the distributor’s businesses.
  • Some have sold out to new owners that changed the rules.
  • Some have simply canceled all of the distributors contracts overnight. (Of course, they kept all of the customers!)

I talk about the biggest and moststriking example of this point in our Special Report / Course.
(See course offer at http://www.MLM-thewholetruth.com/12sfoffer.shtml.)

So, you need, as well as possible, to understand the long-term goals as well as the background of the owners of the company.

One thing I sometimes do for our Company Profile pages at our MLM-theWholeTruth.com web site is “Google” the names of the top executives and company owners. It is amazing what you can find out about people in just a few minutes with the use of the Internet. If you get a bad feeling about anything you learn, don’t ignore your gut reaction!

Here are some other things to look for when you do your search…

Do the owners have a clean legal record? Believe it or not, many don’t and people are STILL joining them!

Do the owners and management have experience with previous M.L.Ms?

If so, why aren’t they still there? If, for example, they sold their previous company, why? Will they sell this one also?

We actually know of one new “hot” company where the owners have done exactly that! My guess is that the same thing will happen again. Why? If they are very smart, they know that most companies do not continue to grow over the long term. So they also know when to sell. But they are not going to tell you when that is, and it probably will not be in your best interest when it happens.

In the case of one company that we worked with for years, we heard the president of the company stand on stage and promise that they would “never sell” the company. Within a year or two, they got an offer for $1.8 billion and sold out in a heartbeat. Which brings me to what I consider to be another red flag…

red flagRed Flag 1 – Is the company publicly or privately held? While I like the idea that a public company has to publish all of their sales numbers so it is easier to really see the track record, we have to understand that the obligation to the stockholders must then come before the obligation to the distributors. That even means sometimes that the price of the stock takes precedence over the long-term best interests of the customers as well.

Red Flag 2 – In particular, look out for companies run by ex-distributors, no matter how successful they may have been as netw*rk marketers. There is one set of skills that make for a successful networker but it takes a whole different skill set to run a multi-million dollar per month (or per day) corporation. The two skill sets are only rarely found in the same person.

The Ideal Company Partner

The ideal, in my opinion, is to look for a company that is privately and tightly held by a person or persons with proven, extremely high integrity, and that has a long-term track record of excellence and consistent growth.

Come with your thinking cap on tomorrow.  On Day 5 -we will introduce you to the Pareto Principle.  When you “get” this, you will know how to “dine [in luxury] with the classes while serving the masses.”

“See you” tomorrow.

As always, I wish you the very best of everything and a truly GREAT life.


Lou Abbott's signature
Founder of the new…
MLM-theWholeTruth.com for people who want to know the up-to-date, whole truth about the industry.

P.S. I can’t tell you how many experienced networkers are now in their 6th, 10th, 12th company or more and are still wondering if it’s possible to build a business to last a lifetime.

Have you ever known someone like that?
Share your or their story with us in the comments below.

“I used to say, “Things cost too much.”  Then my teacher straightened me out on that by saying, ” The problem isn’t that things cost too much.  The problem is that you can’t afford it.”  That’s when I finally understood that the problem wasn’t “it” – the problem was “me!”–Jim Rohn

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Seminar by clicking here.

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{ 2 comments… read them below or add one }

Ruffy Dexter Agati November 19, 2012 at 7:32 am Thumb up 0 Thumb down 0

P.S. I can’t tell you how many experienced networkers are now in their 6th, 10th, 12th company or more and are still wondering if it’s possible to build a business to last a lifetime.

Have you ever known someone like that?
Share your or their story with us in the comments below.

My answer to your question is yes GLOBAL PINOY REMITTANCE AND SERVICES its a lifetime business.Our product and services is Remittance, Bills Payment,Loading and Ticketing.


Roberto Santana April 28, 2012 at 10:09 am Thumb up 0 Thumb down 0

I would back up this factor (Strong Management) with Day 3 (3 year record of growth). I joined a company that had “a person or persons with proven, extremely high integrity, and that has a long-term track record of excellence “. Things were going great, my team was growing well. The pay plan was by far the most unique I had ever seen, concentrated on benefiting the little guy, Not the heavy hitter. Then every month they added a new feature or bonus for the Top Producers and eliminated a feature that benefited the little guys.
The retention rate went from unbelievably good, to terrible. Everyone that had joined my team had done so because of the “little guy” friendly pay plan. When that was gone so was my team. It’s a shame because their products are so good that most of us continued as retail customers after dropping out as reps.


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