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Buying leads for Network Marketing

Leads are, in a sense, the life-blood of your business if you're building by attracting those interested in a home-based business opportunity rather than simply by promoting your products and gradually turning regularly re-ordering customers into distributors (we do both).

It doesn't actually matter in principle whether they're self-generated leads or bought-in leads - they're all "leads".

I use mostly self-generated leads and have, overall, done better with them than with bought-in leads, but I have used bought-in leads on four (or possibly five) occasions over the last seven years and done ok with them, and may do so again some time in future.

From my own experiences with bought-in leads and those of others in my group, my little tips about buying leads are something like as shown below (all opinion, of course) - some of them are based on ensuring that the people concerned are genuinely already looking for a home-based business opportunity (if not, they are not "leads" in any meaningful sense of the word):-

(i) You need to check the type of wording to which they have responded ("business opportunity" type of wording is good, "work-at-home" type of wording is useless: you can sponsor these anyway but a high proportion of them will drop out pretty quickly because they weren't really looking in the first place for a "business opportunity" per se)

(ii) They need to be relatively recent

(iii) It's better if they have not yet been contacted (from that source, anyway) by anyone else offering a business opportunity and will not be sold to more than one other person

(iv) Phone numbers are essential: there's little point trying to do this by email

(v) They must not have been incentivized in their collection-process (people wanting a free entry to a prize-draw are not "leads")

(vi) They must come from a reliable source which you or people in your company have previously used beneficially

(vii) They must not be sold by an MLM-based process in which others in anything like an "upline" are earning commissions on their sale (the prices will be artifically inflated to allow for the payment of commissions and a high proportion of these, in practice, will turn out to be "business opportunity jumpers", too)

I have had much better experience with leads costing about $5 - $6 each than any other, cheaper types, though obviously there's quite a lot of luck in it.

My self-generated leads are roughly on a par (in overall quality terms) with the very best leads I've ever bought (which were $8 each) and they cost me a lot less than that to generate. So mostly I just use my own. But there's nothing "wrong" with delegating/outsourcing the lead-generation function of your business to a specialist - if you can find the right one.

My overall impression: don't expect very cheap leads to turn out, in the long run (though they may appear the opposite in the initial stages when you sponsor some of them) to be anything much more than a waste of time. Just my perspective.

Online and/or offline lead generation?

Are you generating leads online or offline?

The retention-rate of distributors sponsored as online leads is significantly worse.

At the Network Marketing Forum two successful US-resident network marketers (in different successful companies) both of whom I respect greatly have recently told me (quite independently and spontaneously) that they've eventually and reluctantly taken the decision to concentrate on building internationally, and no longer to sponsor any internet-derived domestic US leads at all, because they're fed up to the back teeth of putting time, effort and energy into training people almost all of whom drop out of the business within their first 3 - 6 months.

All the people in my own company who have tried using the internet to generate leads (and we have no rules against it at all) have found that what they have ended up with is a collection of people who have been in many MLM's previously, never managed to make a living in any of them, dropped out of them, and moved on to another company, probably thinking that "this will be the one", without ever quite making the connection and realising that the unifying theme in all their previous experiences was that they tried to build their businesses online exclusively.

My belief is that "internet leads" who do express interest in a home-based business opportunity have usually expressed interest in many, over long periods of time, and the reality is that they're very high risk for continuing to do so after you put your time/effort/energy into getting them started in your business. Some (perhaps many) will inevitably be lured away to the latest, most hyped, most flashy new "pre-launch". This very rarely happens in the case of offline-generated leads, whose retention-rate is therefore much higher, partly perhaps because they're so much less likely to be continually exposed to all the hype-promotions.

My feeling about this is that it's a bit like dating a philanderer rather than a man who's actually looking for a long-term partner: whatever their apparent intentions on joining you, quite often their behaviour-patterns will subsequently repeat themselves.

I don't do anything difficult or clever or complicated at all in building my own business, but since I've been on the internet myself, more than 2 years of chat with other MLM distributors (in the two forums I frequent), some of them rather successful ones and many more not earning a living at all, have convinced me that our own retention-rates (for both distributors and customers, actually) are dramatically higher than average, which I attribute partly to the fact that we're not doing our business-building online at all. We're generating "real leads" rather than "virtual leads".

We have no "autoship" but my company audits very accurately (and accordingly to very strictly defined parameters) on a month-to-month basis the sales volumes, sponsoring numbers, personal purchases and so on of all its distributors. This information is (understandably) not publicised, and I can therefore do no more than invite you to take my word for it that it makes very impressive reading, with the notable exceptions of people venturing online to try to promote their businesses.

Many people, especially in the early stages of building their MLM business, make the mistake of measuring how well they're doing according to the number of people they're sponsoring. The learning curve is sometimes slow and difficult. People imagine that if their distributor-numbers grow steadily over their first few months, that they must be doing the right thing and securing their future. Sadly, it ain't necessarily so. All too often people are earning no more after 12 months than they were earning after 6 months. I believe that this "syndrome" is very common in businesses built up from online-generated leads and much rarer in businesses built up from offline-generated leads, because the medium-term retention-rates are wildly different and one can all too easily get a entirely false picture from the short term, which is all that many people ever really see because they change companies so often and never actually achieve anything stable, let alone duplicable.

Sponsoring from Genealogy Lists

In my opinion, trying to sponsor people from MLM company "genealogy lists" (lists of distributors of former and/or current companies) is absolutely the very top of the list of things not to do.

These are people we are not willing to sponsor.

A proportion of them will be "jumpers". Others will have multiple businesses, and/or a history of multiple businesses. Others will already be working another network marketing company at the moment, in which case we wouldn't be willing to sponsor them anyway.

Unless possibly you have a genealogy-list from a company that's just very recently gone under leaving all the distributors afloat, or something very similar, all you know for sure about such "leads" is that they've failed to make a living in companies in which other people have managed to make a living, and/or they already have an MLM business.

I suspect (some will disagree with this and consider it "judgmental") that it all comes down to whether you're willing to spend your time/effort looking for and sponsoring and coaching and getting started with "floundering network marketers" and people with a history of bad previous judgments. I'm not. And we don't want people in our downlines who are, either.

Someone very successful indeed in my group says that it's a bit like dating married guys: they're not going to leave their wife for you and if they do, within a couple of years they'll be leaving you for the younger/flashier/newer/more-hyped-up model anyway, so why get involved with them in the first place.

All the successful people in my company have done best, over the long term, by building their business with people who have never been involved in network marketing before. They're entirely fresh and unprejudiced (the ones willing to join you, anyway!), and they'll be able to learn your company's duplicable system and build a business without being full of all sorts of nonsense they've "learned" elsewhere and not made a living with because the people teaching them didn't know what they were talking about. (This is also one of the reasons why the overall success-rate in network marketing is so low among people trying to build their businesses predominantly online: they're dealing, to a greater or a lesser extent with "previous failure".)

It's (relatively) easy to sponsor people from genealogy-lists, of course, but very difficult to retain a significant proportion of them.

Unfortunately, it's easy to find people in internet forums saying "I wasn't sponsoring anyone at all until I started using genealogy-lists, and now I'm sponsoring plenty". This may be so, but two or three years later those people are not still in the business because their downlines dropped to bits. In the short-term they thought it was working, and the learning-curve is long and slow with this.

You can't tell them that at the time because they're only copying what they've been told to do (by someone who knew no better and was only half-way along the learning-curve) and you can't tell them later either, because they're not still there. So appearances can be very deceptive indeed over this issue.

I suspect that if you ask "network marketers" in general whether or not this is a reasonable idea worth trying, quite a lot of them will tell you that it is. But if instead you ask only "network marketers earning over $15,000 per month" (or whatever - in other words just the successful ones), you'll look long and hard to find anyone at all recommending this "technique", and when you do find one, he'll be trying to sell you something.

What is a "lead"?

I see, in our forum and others, many discussions exchanging ideas and suggestions for lead-generation for network marketing businesses.

My friend Robin van der Merwe makes the good point that where she sees most people dropping the ball is in their Marketing Plan (or lack of it!). They fly by the seat of their pants each day, starting the day with some question like “Well, what shall I do today?”. If you’re starting the day with this question, Robin rightly observes, you’ve already lost the race.

The other area where I see a lot of people dropping the ball is that they're putting time and/or effort and/or money into finding people who are not really leads for their businesses: they're just people whose email addresses and/or phone numbers they were able to get. I think this is yet another illustration of what a huge mistake it can be to go fishing in the wrong pond (as Robin also puts it).

Lead generation is a significant part of all of our businesses, whether we do it ourselves or delegate that function of our business to an outside source.

Just as it’s a mistake, when sponsoring distributors, to aim at the ones most easily sponsored (“jumpers”, people looking for “work-at-home”, people who have been in 5 other companies, regular internet forum-posters and so on, all of whose collective turnover as distributors is dramatically high), it can also be a big mistake, when trying to generate leads, to target those most easily generated, because in reality they may not be “leads” at all.

I think all such discussions really need to start from the perspective of a clear understanding of what a lead is. We will all (perhaps rightly and understandably) have our own definition of this concept, some of us more clearly defined than others. Some people think that the email address/phone number of someone who has requested free information about “xyz-problem” is a lead for the purposes of building a network marketing business. Those people really have their work cut out for them, in my opinion, and will have “fun” trying to duplicate it, too, because these are not business-building leads at all: they’re simply the email addresses and phone numbers of people who wanted free information about “xyz-problem”.

When you’re building a home-based business, a lead is someone who is already looking for a home-based business opportunity. There are such huge numbers of these people around at the moment that it makes little sense to accumulate a “list” of email addresses of other groups, hoping that bombarding them with enough autoresponder messages will eventually “convert” a small proportion of them into becoming interested in your business opportunity. It will, surely, but will they still be with you and building your business for you 2 years later, if they weren’t actually looking for a home-based business opportunity in the first place?

Overcoming objections and resistance

When you're talking to prospective business associates, what are the most common objections you get and how do you overcome them?

Does it sound as if I’ve suddenly turned into a 1950’s used car salesman? Relax: the question above is ironic!

“Objections” are something caused by the person eliciting them from the respondent, and I would never try to “overcome” any reservations or observations someone might have, when I’m showing them my business opportunity: I don't get “objections” at all, and my potential business associates don't say anything that I have to “overcome”. These terms don't begin to describe anything I do, would be willing to do, or would be willing to teach others to do. They are part of the techniques that rightly and understandably (albeit very unfortunately for the rest of us) contribute toward to our whole industry's shady reputation.

Objections are actually caused by the person talking/presenting to a prospective associate, if they proceed manipulatively, from a perspective of leading the conversation oppressively, by trying to “close a sale”. These old-fashioned, heavy-handed, disrespectful, manipulative sales tactics, brilliantly discussed and explained in Jacques Werth's High Probability Selling, of which the first chapters can be read online free of charge, have absolutely no place in modern network marketing at all. The way we talk to people, present our business opportunity to them and answer their questions does not give rise to any “objections” either; nor do we wish to “overcome” anything people say.

I would not be comfortable at all  looking at this process in those terms - and I don't think it's just being semantic or pedantic, either: I think that the terms in which you look at it (and the words you use to describe it and to think about it) are very significant indeed to the outcome and especially to the duplication of your work. People who see themselves as needing to overcome objections are going to have some real difficulties in our line of business.

If you show your business opportunity only to people who are already looking for a business opportunity (and people who don’t do that are often among the majority who drop out of our “industry”), you’ll normally find that they know what you’re talking about - at least to some extent - before you talk, and if they don't like it they would have declined or disqualified themselves already (if not, it’s an indication that your screening process, whether it’s online or offline, isn’t doing its job and you might want to re-think it).

This isn’t really about having lots of experience, or being good at it: even a new distributor can easily do this after only a modicum of tuition.

If you encounter “resistance”, you’re talking to the wrong people.

These points don’t really relate to our skill-level or experience-level at talking to prospective associates at all: it’s something even more fundamental than that.

Nor do people have resistance because they’re unfamiliar with network marketing. They may have misunderstandings about what it is (which ought to have been dealt with by your screening materials, before you even speak to them). Don’t forget that newcomers to network marketing are traditionally the ones who do best. They’re not full of sales-orientated perceptions and they don't know enough to give themselves these problems of “objections” and “resistance”.

Resistance is something you cause yourself when you try to impose something on someone, to manipulate someone, to dominate the conversation by steering them toward a certain conclusion. For successful network marketers, that isn't what network marketing is about at all. I don’t encounter resistance because I'm not imposing anything on anyone for them to resist. The newer people are to this process, and the less they know about it (apart from perhaps the occasional person from a professional sales background, and they don't do nearly so well in MLM anyway, in my experience), the less likely they are to be able to have problems with this.

I didn't ever try to “close sales” because I knew right from the start that that skill would never be duplicable anyway, even in the extremely unlikely event of my being both able and willing to do it myself. So I never acquired the behavioural patterns that produce resistance in people. These things, “objections” and “resistance”, are really encountered only by people trying to persuade others who were not already interested in a business opportunity to become interested in a business opportunity. And that’s inevitably the path to disappointment, frustration and disillusionment.

What’s needed is to develop the appropriate lead-generation skills so that you're talking only to people who've already decided that they need a home business. Once you do that, you'll rarely encounter objections or resistance again. Your opportunity may not be the right one for everyone, of course, but when that's so for someone, you don't want them anyway because they'll use up your time and effort and never produce income for you. You can only ever lose by trying to persuade people.

Talking with the right people turns the process from persuasion into informing. Informing doesn't cause objections or resistance. This is an almost overwhelming concept. Once you really get it, and drop the manipulative persuading thinking and the language that inevitably accompanies it, it changes your life and your business forever, and in a really good way. And it duplicates well, too, because there are far more people around who can learn to inform people than people who can learn to travel back in time to the 1950's and sell used cars!

Building your business with drop-cards

I've built a lot of my business over the last 6 years using leads generated with drop-cards (some people call them “sizzle cards“), and so have many of my downline. It’s a simple, duplicable idea, and the results from this method are actually improving over time. I think that’s because so many people are trying to generate leads online, often none-too-successfully, so there’s less competition now for those of us generating real leads in the real world in preference to online opportunity-seekers who have often replied to 100 different things.

I can offer a few little observations/suggestions but they may not be fully relevant to your situation because (i) I am in Europe (well, nearly - and my business is, and the drop-cards are) and (ii) we actually use them with a phone-number (7-minute recorded message line, and not on a free-to-call 800 number) rather than with a website as some people do.

1. Think big. To get anything quantifiable back from drop-cards, you need to be monitoring them by the thousand, not by the hundred.

2. Think eye-catching. As much colour as possible and as few words as possible, to get people's attention.

3. Think up-market. For a business opportunity, try to avoid "poverty-consciousness" and seek out "aspirational thinkers". Expensive areas are better than cheap areas where you think people "need" your opportunity. Brand new BMW's (which are often not yet fully paid for) are better than old Ford Fiestas. I don't think putting them on cars is a great way to do this, actually: I'm just trying to illustrate a point.

4. Think classy and professional. No flambuoyant typefaces and fonts. Nothing that's difficult to read. No attempted jokey/witty wording (believe me: we’ve tried and it doesn't work).

5. Think interrogatory. We’ve done well with one-liners that ask a question to which the obvious answer is "yes", with affirmative thinking prompting the follow-up.

6. Think Vista (the printer, not the PC operating system: think XP for that!). I get all mine delivered to London from VistaPrint Europe in Holland, 250 in a little box, always printed free, all you pay for is postage and packaging, and you can order absolutely unlimited numbers, using their free offers as many times as you like. Two things about VistaPrint, though: they send a lot of email (about one every day, almost always with some free offers), and you need to keep a careful eye on their check-out pages and verify the amount carefully before paying the shipping costs. Some people have complained about “unauthorised credit-card charges” from VistaPrint, but these are people who haven’t paid attention to the check-out process and have bought something they didn’t intend to buy (usually address labels); a minor inconvenience to have to be so careful, but you get used to it pretty quickly, and actually it’s worth it to deal with Vista because the quality and reliability of their printing is so impressive.

7. Think “polybag”: you can buy little see-through bags with a peel-off sticky back to leave “drop-card dispensers” around so people can take one. It’s potentially a good way to multiply your drop-card distribution and start to qualify the recipients (they’ll take one only if they’re interested), but be careful with them when sticking them on others’ property: if they stay there for long enough they can damage the paint when they’re taken off!