This is a question that most current or prospective network marketers do not think enough about before they get involved with a home based business opportunity.
High ticket verses MLM has been debated in the corridors of marketing conferences for years and both programs hold merit.
Let's look at the MLM model.
Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a down line of distributors and a hierarchy of multiple levels of compensation
A traditional MLM compensation plan is based on recruiting a down line, building a large team and earning residual commissions. The cost to get started is generally around $50 - $500. For me, this is one of the first problems with a traditional MLM. This is an attractive price, but what does your new distributor stand to lose when they walk away from the opportunity? You guessed it, $50. So it becomes easy for your distributors to drop out of these low cost systems.
Frightening statistics show that out of 100 people that join a MLM company in a year, approximately 80-90 will quit! Terrifying! Why?
These MLM companies can attract the hobbyist and non-serious marketers or people who get caught up in the company's hype about the pretty replicated website that they will receive once they sign up. Once their warm market i.e. family and friends, dries up, so unfortunately does their enthusiasm and they quit.
The MLM compensation plan is another factor that, I believe, contributes to high attrition rates.
Most new marketers get caught up to trying to explain their new company's compensation plan. This can be a nightmare for the new marketer. Here what I mean. Ever heard of these compensation plans? Unilevel – Binary –Matrix – Compressed and Australian 2UP. It really does take time to get your head around these compensation plan structures.
Now, I'm not saying that there is anything wrong with these, after all people have been making some pretty good money using these comp plans but it is a challenge for the new marketer. New marketers can fall into the explain game – and this is deadly! MLM companies will tell you that all the explaining is done via their presentation but this has never been the case for me. Most people who have contacted me directly, want that questioned answered and if you struggle to explain it – your new rep is gone! Just telling a new prospect to view the compensation plan again just won't cut it.
Another MLM staple is the 3way! This is a nightmare! This is where you're up- line speaks to a new rep to "get them over the line" on your behalf. I don't know about you but I started working online for time freedom not to spend my days and nights on the phone convincing someone to join a MLM company. Leaders are located all around the world and connecting with your up-line on the phone, in a different time zone, can be frustrating and more than likely your new rep will feel the same.
Another point to note about MLM companies is that they can and do, go out of business. So...you spend years building you down line and BANG! They change their already complicated compensation plan or re-brand themselves to something completely different to when you joined. This happened to me personally. My company changed their name and leadership without notice. People left that company in droves.
Now...High Ticket Programs
A high ticket program is a "one time purchase" product that can cost anywhere from $1000 – $10, 000 or more. In this business model, you get paid a large commission upfront and sometimes additional income based on team members production but do not receive on-going residual commissions. I like this model for a couple of reasons.
I have always been a high ticket person. It just makes sense to me. Why? Firstly, you are in control of your own destiny. Your income is directly proportioned to your efforts.
No need to build an enormous team. Wouldn't you rather work with 50 committed people than 500 flaky reps? It's a no brainer for me! Here are a couple of the pros.
Of course there are some cons as well. A high ticket program can create a longer sales cycle. People will naturally want to think more about it before joining you. You will not be building a residual income and due to the higher buy-in, your market is smaller. Worth mentioning here again that with a high ticket program you will not have to recruit hundreds of people into your business to replace your annual income.
For me, the pros definitely outweigh the cons. High ticket programs use tight sales funnels that sort the serious from the flaky. Serious people just "get it". You spend less time on the phone explaining compensation plans and doing 3ways, leaving you with that time freedom which is exactly what you wanted when you started marketing online in the first place. In my experience, people generally call you! That's pretty cool J
One last thing I will mention; is that really it doesn't matter which you choose, MLM or high ticket, you still need to market the company enthusiastically and consistently. If you are ready to take action and turn your network marketing business into a full time income from home - visit http://thisismlm101.com for everything you need to make massive profits online. It's the same system that I use to market my business. It works for me and I can show you how it can work for you too.
I am here to help.
Please like and share if you enjoyed this article.
High ticket verses MLM has been debated in the corridors of marketing conferences for years and both programs hold merit.
Let's look at the MLM model.
Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a down line of distributors and a hierarchy of multiple levels of compensation
A traditional MLM compensation plan is based on recruiting a down line, building a large team and earning residual commissions. The cost to get started is generally around $50 - $500. For me, this is one of the first problems with a traditional MLM. This is an attractive price, but what does your new distributor stand to lose when they walk away from the opportunity? You guessed it, $50. So it becomes easy for your distributors to drop out of these low cost systems.
Frightening statistics show that out of 100 people that join a MLM company in a year, approximately 80-90 will quit! Terrifying! Why?
These MLM companies can attract the hobbyist and non-serious marketers or people who get caught up in the company's hype about the pretty replicated website that they will receive once they sign up. Once their warm market i.e. family and friends, dries up, so unfortunately does their enthusiasm and they quit.
The MLM compensation plan is another factor that, I believe, contributes to high attrition rates.
Most new marketers get caught up to trying to explain their new company's compensation plan. This can be a nightmare for the new marketer. Here what I mean. Ever heard of these compensation plans? Unilevel – Binary –Matrix – Compressed and Australian 2UP. It really does take time to get your head around these compensation plan structures.
Now, I'm not saying that there is anything wrong with these, after all people have been making some pretty good money using these comp plans but it is a challenge for the new marketer. New marketers can fall into the explain game – and this is deadly! MLM companies will tell you that all the explaining is done via their presentation but this has never been the case for me. Most people who have contacted me directly, want that questioned answered and if you struggle to explain it – your new rep is gone! Just telling a new prospect to view the compensation plan again just won't cut it.
Another MLM staple is the 3way! This is a nightmare! This is where you're up- line speaks to a new rep to "get them over the line" on your behalf. I don't know about you but I started working online for time freedom not to spend my days and nights on the phone convincing someone to join a MLM company. Leaders are located all around the world and connecting with your up-line on the phone, in a different time zone, can be frustrating and more than likely your new rep will feel the same.
Another point to note about MLM companies is that they can and do, go out of business. So...you spend years building you down line and BANG! They change their already complicated compensation plan or re-brand themselves to something completely different to when you joined. This happened to me personally. My company changed their name and leadership without notice. People left that company in droves.
Now...High Ticket Programs
A high ticket program is a "one time purchase" product that can cost anywhere from $1000 – $10, 000 or more. In this business model, you get paid a large commission upfront and sometimes additional income based on team members production but do not receive on-going residual commissions. I like this model for a couple of reasons.
I have always been a high ticket person. It just makes sense to me. Why? Firstly, you are in control of your own destiny. Your income is directly proportioned to your efforts.
No need to build an enormous team. Wouldn't you rather work with 50 committed people than 500 flaky reps? It's a no brainer for me! Here are a couple of the pros.
- You get paid a substantial commission when you make a sale – immediately
- Your new team members can duplicate the process and move into "income replacement" very quickly
- The higher cost will attract a more professional and serious marketer – the big thinkers - leading to lower attrition rate.
Of course there are some cons as well. A high ticket program can create a longer sales cycle. People will naturally want to think more about it before joining you. You will not be building a residual income and due to the higher buy-in, your market is smaller. Worth mentioning here again that with a high ticket program you will not have to recruit hundreds of people into your business to replace your annual income.
For me, the pros definitely outweigh the cons. High ticket programs use tight sales funnels that sort the serious from the flaky. Serious people just "get it". You spend less time on the phone explaining compensation plans and doing 3ways, leaving you with that time freedom which is exactly what you wanted when you started marketing online in the first place. In my experience, people generally call you! That's pretty cool J
One last thing I will mention; is that really it doesn't matter which you choose, MLM or high ticket, you still need to market the company enthusiastically and consistently. If you are ready to take action and turn your network marketing business into a full time income from home - visit http://thisismlm101.com for everything you need to make massive profits online. It's the same system that I use to market my business. It works for me and I can show you how it can work for you too.
I am here to help.
Please like and share if you enjoyed this article.