Marketing Your Business With A Network

August 25, 2011 by  Filed under: Marketing 

The method I’m about to explain for marketing your business, can be one of the most powerful, if done correctly. You need to decide whether it’s right for your business, however do look at it as a serious potential route to market for your product or service and understand how it works before making a decision.

With most routes to market, we find that they cost money and we don’t know if they are even going to work for our business, or what return we’ll get! If you decide to build a network for your business, you’ll know exactly what your overheads are for gaining new customers, so your pricing can be much keener, as you won’t have to pay out, until customers or clients have been gathered.

What exactly is Network Marketing

Generally your route to market will only be through a network of distributors – people that like your product or service enough to recommend it to their friends, family and other people they know. In return for this you compensate them with part of the profits from that sale. The distributor can also go out and find other distributors to build a team which they then earn from when they make a sale (*Note* in the UK it is illegal to pay distributors for recruiting other distributors as this would make it a pyramid scheme). When someone becomes a distributor for you, they start their own business. you can’t tell them when to work or how many hours they have to do.

There are different structures for network marketing businesses such as Binary, Breakaway, Uni-level, Matrix or a combination of these systems. However I’m not going to go into each system here.

Network Marketing will work with almost any product or service, however it works best with a service that is used on a consistent basis by the consumer, without the distributor having to go back for repeat sales, they then get paid a percentage on those services every month and after a period of time, the distributor can build an excellent residual income. With a product, the distributors has to have to make sales every month, so at the beginning of the month they start at £0.

Like a franchise, generally you will have to charge the prospective distributor, a fee to join your company, this will prove they are serious, but also cover your costs of training them and getting them started with any marketing material, also like a franchise, you may have to charge them a monthly fee, this covers your overheads involved. If you didn’t charge a fee you’d then have a lot of people getting your marketing materials and being trained and then not doing anything with their business, this would eventually put you out of business.

With a network marketing strategy, you’ll need to have your distributors doing a minimum amount of activity, before they get paid, or get paid full commission by retailing the products or the service, otherwise you’d have people just signing up distributors and no one retailing will equal no money coming in to the business.

Tips to start and run a successful Network Marketing system

  1. Always pay your distributor base on time.
  2. Always deliver a great service, it is your distributors friends and family buying the product or service.
  3. Have great training.
  4. It’s best to keep this as your only route to market.
  5. Work with a financial director to cover how much you can pay the distributor base.
  6. Their should be several bonuses available for the distributor base, so the more activity they do the more they can earn.

Misconceptions you’ll find with marketing this way

  1. It’s an illegal pyramid scheme – As I said earlier, It’s only illegal if people get paid for recruiting distributors and there is no product or service involved. Also when you look at any sizeable business they are pyramid like in structure.
  2. Only the people first in earn lots – This not true as in most systems new distributors can overtake the person recruiting them and eventually make more money.
  3. It will eventually saturate and people will lose out – This doesn’t happen because the birth rate exceeds the amount of distributors that join, Not everybody wants to do it and generally people are too lazy! about 20% of the distributors that come into your business will really work at it!

Done and run well a network marketing business will be win/ win/ win for all involved the company, the distributor base and the customers.

About the Author

Paul Jennings is a marketing mentor and business coach based in Hertfordshire in the UK, he helps entrepreneurs and small business owners create marketing that works and helps them develop and marketing strategy. He also helps them to achieve their outcomes with a variety of coaching tools.
Visit his site for loads more tips and resources.

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