The Difference Between Traditional Sales and Network Marketing

In my 30 years of sales and marketing I learned to track “the numbers”. In traditional sales, that’s what you do. So many calls would generate so many appointments, which would result in so many presentations, which would generate so many sales, which would average so many dollars, which would bring so much profit. I lived by that formula. Every day we strived to achieve stronger ratios and higher closing and conversion percentages. Back then I could quote my numbers better than I could quote The Bible!

Network Marketing is different.

What about the recruiting part of the business? Let’s just look at that, okay? If you dwell on retail sales in networking, which with most companies will not provide monstrous residual income, you can track numbers the same as we did with traditional sales. Since that’s generally not the path to the big money, let’s not dwell on retail profits in networking.

Sure you can track ratios- how many calls result in how many invitations that turn into how many viewings of the presentation, which leads to how many people signing in. I sat with a skilled internet recruiter last week and she went through her numbers all the way to the bottom line cost per sign-in. But here’s the big difference. In traditional sales, you make the sale and you’re done. Sure you may have to follow through to delivery or installation, but basically you make the sale and move on to the next one. In Network Marketing, you sign somebody into your business and rather than it being an ending, it’s just the beginning. Yea, you may make a retail profit or bonus when you sign them in, but that’s not the objective is it?

Someone signs into your business as a marketer, IBO, business builder, or whatever you want to call it. What you want is a leader. You almost never get a true leader right out of the gate. Leaders have to be developed. And you won’t know if the person you’ve signed in has leadership potential until you work with them, until you develop a relationship. If you operate your business by just signing people in and hoping leaders will emerge on their own, you’re missing all those diamonds in the rough.

A couple companies ago (No, I don’t believe in company hopping- I’m just old. With age has come a ton of experiences.) I met a guy at a trade show. He and I were scheduled to work the same booth selling traditional business opportunities. We hit it off and he recruited me into his nutritional company. What did I do? I came home and told my wife, Kim, and the two of us went out and recruited 278 people in a matter of just a few months. That should have been fantastic, right? It wasn’t, because we were not coached to lead with the opportunity. Every one of those people was an auto-ship customer! Not a business builder in the bunch. If Dan, the guy who recruited me, was expecting that he’d see who emerged as a leader- he missed us. Once we joined a company where our upline had some coaching and mentoring skills, we went to the top. We became leaders because our upline helped us develop. They got the credit- and they got the big money- because they developed leaders. 

In traditional sales, you sell 10 deals, and you make the money. In Network Marketing you recruit 10 people and you can wind up with nothing- no leaders, no residual income- nothing. Or you can recruit 1 star after missing your first 20 people, and you can become wealthy. You can’t go by the numbers.

Don’t make the mistake of trying to fit the Network Marketing model into the traditional sales box. It doesn’t work. In Network Marketing everyone has different "numbers" and you won't know what yours are until after you've succeeded! Judge your business not by the numbers, but by the amount of activity you create. It’s putting the opportunity in front of lots of eyes, and then follow-up. Then onto training. That’s where the money is.