Its Good Business Tip #5
How large your business will grow depends on your ability to increase your percentage of customer retention. Have you ever thought about why the failure rate is so high in starting a home business using the typical MLM distributor based business model?
The failure rate is alarming.
When talking about starting a home business using an MLM distributor based business be aware that 95% of these small businesses fail and contrary to what you have been made to believe the problem most likely isn’t you.
It’s the MLM Industry as a whole.
If you have chosen to begin a work from home MLM distributorship – affiliate marketing business you will noticed that for all intent and purposes every business model is practically the same. There may be some slight variations but basically they are the same, only the products or the compensation structure change.
We generally choose one of the many existing MLM companies as our entry point into the home business market because it is presented as a “business in a box” because of the low startup costs, ease to get started, we are attracted to the product and with those spiffy replicated websites, well who wouldn’t want to join your team. Soon after starting your work at home MLM distributorship you generally find that it really isn’t easy, it isn’t that cheap and the people that you sell to aren’t really customers, no matter how hard your MLM your upline tries to make you believe.
When you add other distributors into your MLM business you haven’t added any customers in the true definition of a customer, you have added another distributor. Like you these other distributors are only purchasing product in order to do the same thing as you, they also want to make money from their home business. These are not customers, these are sales persons and they are your competition.
Read that again……
When you add distributors to your downline, you are adding competition – not customers and here is what I mean.
To keep the numbers manageable lets say that the size of the market is 100 people. Initially you have the opportunity to convert 100 people as distributors of your opportunity. Let’s say that you are a Mr. or Ms. Smartypants Mega-Closer and you successfully add 100 new distributors to tour business.
You now have added 100 people trying to earn money doing what you do in an already oversaturated market. They can’t make any money so they quit one by one and your business shrinks until it dies. How do you retain a distributor if he is not making any money?
The answer is simple…
You can’t!
The point is that unless a distributor is making money there is no retention and you have to begin again. Unfortunately whatever MLM opportunity you choose will eventually stumble, trip over its own feet and finally collapse under the weight of its own sales force and die. The only winner here is the MLM Company.
An alternative
Before you throw in the towel and say that building a small business on the Internet is just too difficult you might want to consider an MLM Company of a different color and what makes this opportunity different is really worth some of your valuable time to investigate.
Unlike a traditional MLM Company who is prohibited to market to an end user (customer) this company is a hybrid. That means that although their compensation is based on a MLM type scale the hybrid has been designed to market to the end user (customer) then they in turn market those customers and sell them to you.
Why would they do that?
When you purchase customers you are buying that person’s established customer account. That means that they are already familiar with the company and their products. It also means that they have purchased those goods and or services and are beginning to build a relationship with that company.
This type of business building model is called a customer based business model which allows you to build a stable home based business on established customers and not recruiting distributors/sales persons. Another bonus of this business model is that you don’t have to buy leads. If you want a larger business just buy more customers.
By buying customers you help the parent company fund their advertising costs and expand their market share. It is called co-operative marketing. The company then acquires even more customers through these advertising campaigns and sells them to you to grow your business.
Everybody wins!
In this process the company wins because your purchase of customers helps to lower their customer acquisition costs. You win because you are adding additional customers at a cost that is lower than what it would cost you to buy leads, advertise opportunities and recruit distributors.
This gives you the freedom that you were looking for when first starting your home based business – more time. Wasn’t that a big reason for entering the work from home business arena anyway? It also gives you an established customer base of people who buy what you have for sale. This is the only business model that I have found on the Internet that allows you to open a business today and have real customers within 24 hours.
Customer Retention
Customer retention is a key element in building your home based business. MLM or not you need a strong customer base to build a solid business for the long haul. As was discussed earlier building there is very little if any retention ability when bringing distributors into your business. Contrary to what you have been led to believe they are not customers – they are your competition.
When you buy customers it opens a whole new dimension of opportunity to build a viable business that uses the power of customer retention to build solid streams of residual income without the hassle of recruiting distributors or purchasing leads. Not only is buying customers a smart way to approach starting a small business it is also a good business.
For complete information (absolutely free) on this outstanding business opportunity. Visit:// http://itsgoodbusiness.net
