How to avoid mistakes in MLM. TOP 6 factors for network companies development

Founders of network companies periodically face certain difficulties in the development process that can affect the viability of the business. The FlawlessMLM team has identified the TOP 6 main factors on which the stability and growth of an MLM company depend.

#1. Readiness for Scaling

The methods of network marketing used should allow for quickly increasing product sales volumes through the development of the distributor network. By skillfully developing marketing and organizing the structure, you can scale up literally within a year and only increase the pace of your growth.

To manage a large structure, it is important to consider certain technical nuances. The entire business system must be able to withstand a sharp influx of newcomers and be prepared for scalability. Websites need to be adapted for sharp traffic spikes.

Information on what a landing page in MLM should be like can be found in the article MLM Website. Partner Attraction Guide in 2020

Also, as your business grows, it is worth automating routine work processes. This way, you will relieve your leaders and free up resources that can be used for more important tasks. In network projects, they usually automate:

- referral system;

- training of distributors;

- collecting analytical data, etc.

The usability of the website and software directly affects business growth. Therefore, when you notice a problem in technical details, try not to delay its solution. To avoid possible issues, we recommend involving contractors with practical experience in network marketing in working on websites and MLM systems.

As an alternative, a young project can try its hand by deploying on the Recruit platform (recruting.biz). All the relevant tools for working with the structure are collected and combined into a single system there.

#2. Quality training for distributors

Training partners plays an extremely important role in the development of an MLM company. Often, it is the gaps in education that become the reason for the failure and departure of distributors from the business.

To find an approach to a newcomer, it is important to clearly grasp the level of development of their skills. During an online webinar with a chat, you will be able to promptly answer questions from listeners with different levels of knowledge. At such seminars, you can conduct introductory briefings for beginners, present product updates, discuss cases, and company news. We also recommend combining the webinar training format with other methods, for example:

- video course recordings. They are no less effective than online webinars and are available at any time of day or night;

- individual sessions. Zoom and Skype calls will fill the knowledge gaps of a specific partner and adjust the learning process;

- communication in closed groups. Use social networks and messengers for communication and discussion of important points with the structure;

- with text or article training. This method has proven its effectiveness in educational projects such as Tilda, Netpeak, etc.

Don't forget that the success of each distributor is a reflection of your work. For a quality assimilation of theory, present information in a measured way, in the right order, and give newcomers homework. Phased training of partners will positively influence duplication (the principle where a partner repeats the success-driving actions taught by their sponsor).

#3. Structure Activity

Business progressiveness actively grows when every participant in the structure is involved in the work. If the lion's share of distributors is inactive, the business risks failure.

By incorporating as many gamification elements into business processes as possible, you will be able to engage and captivate people in cooperation with the company. Network marketing itself is already based on certain game mechanics (from the most obvious, the presence of bonuses for sales and recruiting people). However, interweaving and combining basic MLM tactics with other gaming methodologies will help stimulate partners to be more active. For example, try working with:

- competitions. Add a rating or table to each user's personal account, displaying the achievements of leaders. For example, you can create several tables for each important achievement. At the end of the week/month/quarter, it is important to give valuable bonuses and gifts to the winners;

- collecting.Many people enjoy collecting badges and various awards, improving their personal qualifications;

- unexpected gifts.Users are excited when they can receive an unexpected bonus, for example, for helping a team member.

The FlawlessMLM team constantly monitors trends in the network marketing industry and how they stimulate structure activity. In practice, companies most often come to optimizing the compensation plan to suit the interests of target partners and the niche in which they operate.

More about these motivation methods structures, read in the article How to increase MLM structure activity

#4. Internationalization

In our time, any resident of the planet can become a partner of a particular network company. However, when scaling and entering the international arena, it is necessary to optimize the business according to the MLM development trends in a specific region. Especially it is important to coordinate all the nuances with the legislation and cultural characteristics of each individual country. 

Some governments, such as China, have rather strict policies towards the legalization of MLM companies. The legislation of other countries, like India, only facilitates the entry of new network companies into the market.

Before internationalizing your company, consult with our manager in the website chat FlawlessMLM. Our specialists take into account the nuances and peculiarities of local laws, monitor industry trends worldwide, and help minimize potential risks when entering a new market. Also, in our blog, you can read about the intricacies of doing business in countries like Ukraine, Russia, Russia.

America, China and India.

#5. Competent marketing promotion

At the start, it is important to set the company's goals and a list of actions through which you will achieve them. Based on our observations, very often, despite a promising idea, founders did not want to engage in marketing promotion and ended up with nothing. When starting a business from scratch, it is important:

1. Analyze the market and niche. Search queries statistics (Yandex Wordstat, Google Trends) will help determine if there is demand for the product, whether seasonality principle works for a specific group of goods, the number of potential consumers, and their region of residence. 

2. Study the competitors. Study the existing market - who occupies the niche and who among the players can become your real competitor. There is always something to learn from them and in the future, avoid their obvious mistakes. 

3. Define the target audience. Promoting any business involves spreading information about the company among people interested in it. Influencing the target audience should be the foundation of the entire business promotion strategy. 

To learn how to identify your target client, read the article Target Audience in MLM. Guide to Definition and Attraction

4. Set short-term and long-term goals. Every entrepreneur sets one global goal for themselves, which is achieved through smaller ones. For example, to create your MLM company, you need:

- develop a compensation plan.

- design the website interface and personal partner accounts;

- set up attraction funnel for potential partners and clients and much more.

If you need expert support, contact our website chat manager flawlessmlm.com. With over 16 years of practical experience and 280+ completed projects of various types behind our team, by receiving a free consultation from a competent specialist, you will be able to determine the most optimal marketing solution for promoting your company.

#6. Compensation Plan Development

The compensation plan is the main vector for promoting products and services in an MLM company. It's about the very algorithm that determines the volume of distributor rewards and the scheme of their accrual. It is precisely through the marketing plan that a business:

- ensures its profitability. A quality marketing calculation is important to ensure turnover, proportionality of profit distribution, optimization of the quantity and amounts of payments compared to the income received;

- forms a distribution network. A partnership structure is created, the participants of which promote the product directly to the end consumer;

- stimulates the activity of sellers. The terms of the reward plan imply that increasing turnover and scaling the partnership structure becomes a direct interest of each individual sales agent.

Unfortunately, there is no universal plan that would fit any company, and basic types of marketing are rarely encountered in pure form. The main types ( linear, matrix, binary, and stairstep) are used as components of hybrid marketing. When embarking on such a responsible task as developing a mixed compensation plan, it is important to have practical experience in writing various marketings for different projects.

At the same time, it is important to regularly review and update the terms of the reward plan as needed, remove or introduce new types of bonuses and partner motivation programs. The more diverse the bonuses included in marketing, the wider audience it will be able to attract. The most basic types of rewards in network marketing:

1. sponsor (referral) bonus - reward for connecting new participants to the structure. Each team member is responsible for recruiting;

2. matching - in a literal sense, it means "payment from payment." When a participant in the structure receives any bonus, their sponsor receives a percentage of that amount;

3. cycle closing bonus - a one-time, fixed reward for achieving a certain turnover.

The more types of bonus rewards are provided in marketing, the more stable and active the structure develops.

A competent approach to implementing a project from scratch implies meticulous work, the presence of specialized knowledge in the field of affiliate sales, and practical experience in implementing MLM projects. Keep in mind that most contractors do not understand the nuances of the MLM industry and have not dealt with importing referral systems into business processes before.

The team FlawlessMLM will help minimize potential risks, reduce the likelihood of errors, optimize the website according to niche development trends and the specifics of your project. Contact our manager in the website chat flawlessmlm.com and get a free consultation on solutions for your business.