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NMBJ 1 July 2009 Publisher's Perspective 974 views 2 Comments Print This Post  Email This Post

PUBLISHER’S PERSECTIVE: July 2009

By Dr. Keith B. Laggos

If you don’t have a success plan then you are planning to fail, whether you know it or not. So many people approach direct sales with the hopes that by just signing the distributor application they will become financially independent or rich beyond their current dreams.
I have written in my book, How to Recruit & Sell in an Over-commercialized Society (R&S), “network marketing works well, but only when you work hard.” This is more true than ever. No matter what anyone tries to tell you when they are trying to recruit you, there is only one person that you can count on to make you successful. That is yourself, of course.
Many companies and sponsors will tell you that you just have to create a warm list of your friends, family and other realms of influence. Then you are to go out and sponsor them. When these people do the same, it is called duplication and through duplication you will become rich. Sounds plausible, doesn’t it? It does work, but for a very few charismatic people. For most everyone else, it results in what is called “the NFL,” “No Friends/Family Left.” Most people on your warm list don’t want to “work for you” or be in a “pyramid scheme,” as they see it. Therefore they don’t even try to duplicate themselves if they do join. They just sit back and wait for you to make them rich. When that doesn’t happen, they say, “I told you these pyramid schemes don’t work.” Even when they try to duplicate themselves, they often share much of the same warm market list, resulting in diminishing returns. Also as you move down the corporate downline often you have less successful people with less ability trying to train the next generation of recruits. I call this “diluting the gene pool. ”
Most of the people in your warm market list are initially much better candidates for retail sales than as distributors. You will usually earn more retail profits than overrides too. Those who are interested in the opportunity will approach you when they experience benefits of your product or witness your success. That is one reason why party plan distributors, on average, earn more income sooner. They first retail to their warm market.

Warm list can be good
Making a warm list and inviting those on it to a party is a great way to start your business. This can be true in network marketing too (see R&S). Retailing to your warm market sets the perspective that this is a real, legitimate business while screening for those interested in the opportunity. The problem that party plans have is that distributors earn most of their income from retail sales directly at their parties and repeat sales after. They earn much less in management override commissions from building a sales organization than in companies with network marketing and multi-level compensation plans. Therefore they don’t want to recruit people from their local or warm market for parties that may compete with them for the same retail customers. The management overrides are not substantial enough to support long-distance marketing.
Also many of the party plan distributors are women who depend on the income to support their families. Spending their party plan income often creates a personal conflict by making these women fearful of depriving their families to further their careers. This results in many party plans remaining regional with slow growth. There are methods and strategies to overcome these challenges and I have consulted with party plan companies to help them do so.
Although the party plan companies may not expand fast, their distributors usually do earn a higher average income. This is in contrast to direct sales companies with network marketing and multi-level compensation plans. The substantial management overrides create incentive for distributors to build large national organizations. This results in fast growth, but slower growth and lower average incomes for the majority of the distributors. When these facts are combined with the practice of recruiting from warm market lists of people often not enthusiastic about the opportunity, who therefore don’t duplicate, or in other words “recruit others,” there is no wonder the turnover rate is so high.
The situation may be different between direct sales companies with a party plan marketing method and compensation structure and those with a network marketing or muti-level marketing compensation structure, but the solution is similar. All direct sales companies and distributors need a success plan.

My consulting success plan
When I do consulting work with a company or success planning training for a group of distributors, I start a success plan by first determining short- and long-term goals, including exit strategies when appropriate. Too many motivational speakers dwell on goal setting as if it is an end in itself. It is not. It is just an initial starting point that is even typically in flux, especially over time.
Then we list resources. These resources include financial, time, skill, materials and equipment, contacts, etc. We define our primary target markets for the products and opportunities. Based on the resources and goals, we create a marketing strategy, time line, budget and benchmarks to compare future performance. We use realistic projections to compare our goals, resources and marketing strategy to ensure they are in alignment. If not, one or more must be adjusted. Once the goals, resources and marketing strategy seem reasonably adjusted, this becomes the success plan.
The success plan should include aspects to ensure retailing and recruiting strategies are addressed. Market expansion, growth management, functions and responsibilities, in addition the areas mentioned above should be well defined with detailed specifics. I like to end a success planning consultation or training with the party(ies) making a statement of commitment.
Although there are a lot of aspects to a good success plan, it can be completed in a relatively short amount of time. This can be facilitated by having a survey completed by the parties prior to the success planning session. A success plan creates more than just a roadmap to success. It creates realistic expectations and commitments. It can create the confidence needed to succeed. A good realistic success plan with achievable benchmarks can encourage the effect to stay on focus long enough to achieve success. This means less attrition by companies and distributors in direct sales. This means less failure and more success. That, in turn, will create more success for everyone and that is a success plan for the industry.

Keith Laggos has been in the direct sales industry for 38 years, half of that time as a successful distributor. He is one of only three people worldwide chosen for the Hall of Fame Award. He is president of a 24-year-old, multi-level company, which he founded. He is a board member of an industry association as well as other companies, an expert witness and an industry consultant.
His publishing company is the largest in the industry and produces Network Marketing Business Journal (NMBJ), formerly Money Maker’s Monthly, the first direct sales college textbook, Direct Sales – An Overview and Higher Than The Highest Mountain, an inspirational, warm and humorous fictional account of how a Christian family’s love and faith overcome all while facing everyday challenges in today’s society. It also provides a positive example of how network marketing helps families at various aspects and junctures of their lives. Most recently, he has published How to Recruit & Sell in an Over-commercialized Society, a how-to textbook on marketing. The MLMIA, “the association for network marketing,” has awarded Laggos and NMBJ’s predecessor Money Maker’s Monthly, several prestigious awards, including its Global Vision Award, Supplier of the Year and President’s Spirit Award, among others.
Laggos has also been published and quoted in other publications and academic journals around the world. Laggos has a bachelor’s degree in math and computer science, a master’s of business degree in management and marketing, a master’s degree in economics and a doctorate (abd) in public policy analysis and a doctorate in business economics.