What’s the “Model” of MLM?
In our previous article, you will remember that MLM is also referred to as Network Marketing. As the name implies, it has multiple numbers of people or networks marketing a product to customers.
Here is a simple way to explain. Under MLM a company employes an independent salesperson also referred to as an or affiliate who performs the following basic tasks.
- Getting customers and generating sales for the company.
- Recruiting and training other people as sales reps to get customers and generate sales.
In that specific order.
Let’s discuss a little more in detail how the MLM model works.
Multi-Level Marketing Model
Step 1: Sales representatives get the customers.
Initially, the MLM company appoints a lead salesperson or distributor whose primary motive is to sell the product to the prospective customers. The number of customers he has to secure varies with the company’s sales plan and commission structure. But it’s usually better to get as many customers as a person can retain effectively. And also make repeat sales to them.
Step 2: Train and recruit a sales representative.
After generating a few customers and making a few sales to them as done by normal direct marketing, your job as an MLM is then to train a person to act as a sales rep and convince him to generate more sales for your company. In this case, that person would be called your “downline”. Your job is now to be a recruiter instead of a retailer or distributor.
Step 3: You then teach that person to recruit and train another person.
Once your sales rep gets a big enough number of sales and customers at will and generates sufficient sales, it’s time for you to train them to get a sales rep. Your job as a leader has now multiple dimensions such as generating further sales, training people to become sales reps, and training the sales reps to train future sales reps. The focus of your efforts will again depend on your commission plan. You as a marketer would, of course, focus your efforts on higher commissions.
Step 4: Repeat the above steps to generate a chain.
Once you recruit and train your sales rep to recruit and train other sales reps to generate more customers, you now growing the downline. Because of that, you are generating more and more customers, so, in return, sales.
This is why it is called Multi-Level or Network Marketing and hence companies through MLM tactics cannot only generate reliable customers but also can get its products and or services to masses of people with minimal costs and in a relatively short period of time.
So in this article, we explained the Multi-Level marketing model rather well.
I have something for you today! I have a free webinar called “Automated Sales Success” which my personal friend John Thornhill put together. This is the webinar I used to help me with many of my products.
All you need to do is register for the free webinar, which you can do by clicking right here!
I will see you in the next one!