By Praveen Panghal Kumar

More than 90% people who join network marketing fail. This figure is common to all businesses and not limited to MLM. These figures by themselves should not dissuade people from joining network marketing because even a little bit of correct education on marketing and lead generation can lift any average person with normal intelligence into the top ten percent and you can make a great life style change as you will be working flexi hours from home.

The two main reasons why people fail in MLM are because sooner than later they either run out of Quality Leads or Cash Flow to run their business. It takes time, money and effort to build a network that will start paying back. In network marketing you are like a rocket which burns 90% of its fuel at the time of take off. Once you reach the outer orbit it is cruise control.

Leads are lifeline of MLM business. In the traditional approach we are asked by our up line leaders to make a list of all our friends and family members. We are told that we will never run out of leads because once we sponsor a few people into our business then we can start working with their warm market list. For this approach to work one has to be very persistent with their effort and face a lot of rejection. Most of the leads generated through this approach are also of very poor quality because they join the business due to the relationship they have with the sponsor rather than any desire to improve their financial life. Although warm market leads are free it takes a herculean effort to build a network because leads lack the right motivation and also the attrition rate is very high. Sometimes people get lucky and catch a heavy hitter in their net but this is normally an exception and not a rule. Until and unless you are a bull dog with lion’s heart you will find it very difficult to become successful using this model. Some do succeed but it is not for a normal person.

Leads generated through marketing approach have the advantage of being better motivated as they are looking for a business opportunity. The problem with such leads is that there is no relationship of trust with the sponsor which is very important if one is to succeed in network marketing. The leads generated through marketing can also be very expensive. Until and unless you have very deep pockets you will soon run out of cash to fund your business. This is because 95% of the lead you generate will not even join your business opportunity. For example if it costs $10 to generate a lead through online or offline advertising then 100 leads will cost $1000 to generate. Statistics show that around 5% of the leads you generate will eventually join your business. This would mean that it will cost you $200 to sponsor one person into your network. This is definitely not a sustainable or a duplicable model until and unless the returns from the opportunity are very high. In most cases companies want to keep the cost of auto ship reasonably priced and money disbursed to the network is correspondingly limited.

So what is the answer to this problem? The solution lies in the concept of ‘Funded Proposal’ wherein you generate cash by making upfront sales to 95% of the leads who don’t join your business. In Funded Proposal you make low value sale of information product to your leads. In doing so you recover the cost of your advertising and generating leads through marketing model becomes sustainable. In fact Funded Proposal has given new lease of life to the MLM business.

Praveen Kumar is an Online Business and Lifestyle Coach. You can access Free Internet Marketing Training Videos and can also get your The FIRST EVER Fully Branded, Customizable, Lead Generation & Attraction Marketing System Of Its Kind That Combines Attraction Marketing, Affiliate Marketing, CashFlow Programs And Traditional MLM into ONE Super Powered Profit Pulling Machine. You can plug in your business opportunity into this amazing marketing system. http://www.spiderwebguru.net

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