Founders of network companies often face certain difficulties in the process of development that can affect the viability of their business. The FlawlessMLM team has identified the top 6 key factors that determine the stability and growth of an MLM company.

#1. Readiness for Scaling

The network marketing methods used should allow for quick increases in product sales volumes through the development of the distribution network. By developing effective marketing strategies and establishing a well-functioning structure, a company can scale up rapidly in just a year and continue to increase its growth rates.

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

For information on what an MLM landing page should look like, refer to the article "Site for MLM. A Guide to Attracting Partners in 2020".

As the company grows, routine work processes should be automated. This will relieve leaders and free up resources for more important tasks. In network projects, referral systems, distributor training, and analytics collection are usually automated.

Usability of web resources and software directly affects business growth. Therefore, if a problem with technical nuances arises, it is best not to delay in resolving it. To avoid potential problems, it is recommended to hire contractors with practical experience in network marketing to work on websites and MLM systems.

As an alternative, a young project can try its hand at using the Recruiting.biz platform. This platform brings together all the necessary tools for working with a structure into a single system.

 

#2. Quality training for distributors

 

Training partners plays a crucial role in the development of MLM companies. Often, knowledge gaps become the reason for failures and the departure of distributors from the business.

To find an approach to a novice, it is important to clearly understand the level of their skill development. During online webinars with a chat, you can promptly answer the questions of listeners with different levels of knowledge. At such seminars, you can conduct an introductory briefing for beginners, present new product items, discuss cases and company news. Also, we recommend combining the webinar training format with other methods, such as:

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

  • individual lessons. Zoom and Skype calls will eliminate knowledge gaps for a specific partner and correct the learning process;

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

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

Remember that the success of each distributor is an indicator of your work. For effective theory assimilation, present information in a dosed manner, in the right order, and give homework to beginners. Step-by-step training of partners will positively influence duplication (the principle when a partner repeats the actions leading to success that his sponsor taught him).

#3. Structure activity

The progress of the business actively grows when every member of the structure participates in the work. If the lion's share of distributors is inactive, the business risks failure.

By importing as many gamification elements as possible into business processes, you can interest and involve people in cooperation with the company. Network business itself is already based on certain game mechanics (the most obvious one being the presence of bonuses for sales and attracting people). However, the combination and intertwining of MLM basic tactics with other game methods will help stimulate partners to activity. As an option, try working with:

  • competitions. Add a rating or table to each user's personal account, where the achievements of leaders will be displayed. Alternatively, you can make 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 in the stream;

  • collecting. Many people like to collect badges and various awards, to improve their personal qualifications;

  • non-obvious gifts. Users are excited when they can receive an unexpected bonus

The FlawlessMLM team constantly monitors trends in the network marketing industry and how they stimulate activity within structures. In practice, companies often come to optimize their compensation plan to align with the interests of target partners and the niche in which they operate.



 

#4. Internationalization

In today's world, anyone from anywhere on 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. It is especially important to coordinate all the nuances with the legislation and cultural peculiarities of each country.

The government of certain countries, such as China, pursues a rather tough policy towards the legalization of MLM companies. The legislation of other countries, such as India, only promotes the entry of new network companies into the market.

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

#5. Competent marketing promotion

At the start, it is important to set the goals of the company and the list of actions through which you will achieve them. Judging by our observations, very often, despite a promising idea, founders do not want to deal with marketing promotion and end up with nothing. When starting a business from scratch, it is important to:

  1. Analyze the market and niche. Search engine query statistics (Yandex Wordstat, Google Trends) will help you find out if there is demand for the product, whether the seasonality principle works for a particular 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. You can always learn something 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 those interested in it. Influencing the target audience should be the basis of the entire business promotion strategy.

Read the article "Target audience in MLM. A guide to identifying and attracting" to learn how to identify your target customer.

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

  • develop a compensation plan;

  • think through the interface of the website and personal partner offices;

  • set up a funnel for attracting potential partners and clients, and much more.

#6. Compensation plan development

A compensation plan is the main vector for promoting products and services in an MLM company. It's the algorithm that determines the amount of compensation for distributors and the scheme of their accruals. It's through the marketing plan that the business:

  • Ensures its profitability. A quality marketing calculation is important for ensuring turnover, proportional distribution of profits, and optimizing the number and amount of payments compared to the income received.

  • Forms a distributor network. A partnership structure is created, the participants of which promote the product directly to the end consumer.

  • Stimulates salespeople's activity. The conditions of the compensation plan imply that increasing turnover and scaling the partnership structure become the direct interest of each individual sales agent.

Unfortunately, there is no universal plan that would suit any company, and basic types of marketing are rarely encountered in their pure form. The main types (linear, matrix, binary, and stair-step) are used as components of hybrid marketing. When undertaking such a responsible task as developing a mixed compensation plan, it's important to have practical experience in writing different marketing plans for different projects.


 

At the same time, it is important to regularly review and update the conditions of the compensation plan, removing or introducing new types of bonuses and partner motivation programs as necessary. The more diverse the bonuses included in the marketing, the wider the audience it can attract. The most basic types of rewards in network marketing are:

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

  2. Matching - literally, this is "payment from payment". When a structure participant receives any bonus, their sponsor receives a percentage of that amount;

  3. Cycle closing bonus - a one-time, fixed reward for achieving a certain volume of sales.

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

A competent approach to implementing a project from scratch involves meticulous work, specialized knowledge in the field of partner sales, and practical experience in implementing MLM projects. Note that most contractors are not familiar with the nuances of the MLM industry and have not previously dealt with the import of referral systems into business processes.

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