UNDERSTANDING THE MLM MODEL

As we have discussed earlier that MLM marketing is also
referred to as Network Marketing and as the name implies it
has multiple number of people (and/ or networks)
marketing a product to the consumers. In very simple words
under multiple-level marketing a company employees a sales
representative (sometimes referred to as a distributor, an affiliate
or an associate) who performs the following basic tasks,
Firstly getting customers and generating sales.
Secondly generating, recruiting and training other people
as sales reps to get customers or generate sales.
Let’s discuss in detail how the Multi-Level marketing model
works?
MULTI-LEVEL MARKETING MODEL
The following four step model will demonstrate how a multilevel marketing model works:
• • •
MLM Success Guide 7
• STEP I: Sales Representatives gets the customers
Initially the MLM Company appoints a sales representative and /
or distributor whose primary motive is to sell the product or service
to the prospective customers. The initial number of customers he
has to get varies with the company’s plan and commission
structure. But it is usually better to get as many customers as the
person can retain effectively and can make repeat sales to them.
Also if your company’s payment structure is more rewarding
towards training people to get more customers than as a MLM
marketer you should limit your efforts towards getting a few
customers first at this stage and than focus on next stage that is
getting them trained to promote sales. This strategy is well
appropriate for companies who pay you to “duplicate your self”.
• STEP II: Train and recruit a person as a sales representative:
After generating a few customers and making sales to them as
done by normal direct marketing or direct sales, a multi-level
marketer next job is to train a person to act as sales representative
and to convince him to bring more prospects and generate more
sales for the company. This person would be called your downline.
Here your role is of a recruiter rather than a retailer or distributor.
• STEP III: You teach the rep to train and recruit another
person as sales rep:
Once your sales rep get enough number of customers at will
and generates sufficient sales, it is time for you to train them to
get a sales rep. Your job as a leader has now multiple
dimensions such as gener-ating further sales, training people to
become sales rep and training the sales rep to train future
people as sales rep. The focus of your efforts will again depends
on your commission plan, you as a marketer would off course
concentrate your efforts where you can get higher commissions.
• • •
8 CALVIN CLARKE
• STEP IV: Repeat the above steps to generate a chain:
Once you recruit and train your sales rep to train further
people and generate more customers, now you can recruit
another sales rep and follow the same procedure making a
network of distributors within you downline. This is the reason
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 rela-tively shorter
period of time as compared to the tradition marketing methods.
The above procedure well explains the MLM model but is it
always that easier to get as it appears? Or how is it possible for
a company to promote MLM marketing? A well-designed
compensa-tion plan is the only answer to the above questions.
In our next chapter we will discuss guidelines to develop an
effective compensa-tion plan.

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Author: HOMEPROFITCOACH

I have been marketing online for 24 years helping people do it right with education, and list building tools and procedures.