To best explain the 7 Laws
of MLM we will take an excerpt from the MLM Myth:
We are now back
where we began. This journey through the toolbox of a revolutionary
has led us back to the model of the Universe. Just like Copernicus
and Galileo, we too must change the center of our universe.
To make this leap
we must look to another Scientist who made it all come together
– Sir Isaac Newton. Newton was the first to explain the
invisible forces that hold our planets and our solar system within
space by defining and explaining the Laws of Gravity and Motion.
He revealed our Solar System as a series of objects moving along
orderly paths, directed by the invisible force of gravity.
This is our objective
as well - to create a model of laws by which we can understand
and bring order to the motion and action our industry creates.
The MLM industry does not lack energy nor motion. What it lacks
is a system of order that operates within the proper boundaries
of psychology and other laws in proper effective balance.
Our MLM M.O.D.E.L. is just that: a
Method Of
Determining the Equilibrium
of Laws. Here we are referring
specifically to the Laws that govern the MLM industry.
Equilibrium
: 2 : a
state of balance between opposing forces or actions that is either
static (as in a body acted on by forces whose resultant is zero)
or dynamic (as in a reversible chemical reaction when the rates
of reaction in both directions are equal)
This model will
allow us to understand the laws that make up the MLM Industry,
how they relate to each other in an interdependent whole, and
how their Equilibrium, or state of balance, is achieved through
the use of our system.
We will return to our story of Ray Kroc - back
to our MAP - but now with a new set of tools and a new set of
glasses or paradigm. We will look through the lens of the L.E.D.
Principle and the
E.A.R.N. Continuum in
order to establish our MLM M.O.D.E.L.
of the Network Marketing Universe that will enable the
proper “flow” through our P.I.P.E.S.
for optimum success.
Our objective here is to combine all the laws
we have discussed into one workable model – combining all
the information to give you complete confidence in the system
that has been developed through the reality of these laws.
Four of the seven laws are found within Kroc’s
Map of the Turn-Key Revolution. These Laws alone could propel
us towards tremendous success but we will go further and explore
3 additional laws specific to the Network Marketing Industry.
Step
1: The Prototype is Born
The first revelation that Ray Kroc had in the
beginning of the Turn-Key Revolution was the discovery of his
Prototype! An ordinary hamburger stand that contained all the
components of a successful system. It simply required refinement.
We have the same thing today in the Network Marketing
Industry. Our prototype is waiting for us in the hundreds of Network
Marketing companies that have everything together. The company
systems are right; the products and services are right; pay structures
are in place; they are legally stable, they are debt free; they
are able to deliver the same results to their marketers and customers
consistently.
The whole industry really is like the MacDonald
brother’s hamburger stand years ago. It is waiting for the
right person to find it and discover how to finally make it work
– waiting for the spark that will ignite its potential.
The needed spark is the system that will produce duplication –
creating at least a 70% success rate within the industry.
We have all seen and experienced great businesses,
however the skills needed to develop a great business are not
the same skills needed to consistently duplicate that business.
What is needed is to understand the Laws that are the pillars
of a truly duplicable system.
The
Law Of The Shift
The problems that
Kroc faced in the development of his system, were also the seeds
for his super success. Once
he understood his primary problem he also discovered his prime
opportunity. He
was forced to develop a business system that worked every time
in order to attract other business owners who wanted guarantees
of success. His “System Centered” business model is
the secret of the Franchise industry and the Turn Key Revolution.
It is here we find our first law - the
Law of the Shift:
Network Marketing organizations must shift from a People Center
to a System Center.
It is the central law of our model and rightfully
so. Without having the proper center there can be no balance of
the other laws that make up our industry and our model.
Any chain is only as good as its weakest link.
This same truth applies to the Network Marketing industry. Our
success is only assured if success is assured for at least 70%
of our team, no matter their skill level. We have talked quite
a bit in the book about People
Centered Systems and System
Centered Systems but just for clarification:
A People
Centered organization
is one where their success depends on the skills, knowledge and
efforts of their people. In contrast, a System
Centered organization
focuses on the system by which it’s people operate. Its
success hinges totally on the system - not the people who operate
the system.
It
is imperative there first be a shift within the industry –
as well as within each person in the industry.
The
Law of Leverage states that: leverage is power and a successful
MLM organization must identify, and then leverage, the strengths
and assets of each member of the network to maximize success.
With a clear understanding of the need to create a System
Centered System, Kroc now had to consider just how to make
that happen. His system would only be successful if he was able
to maximize the strengths, while eliminating the weaknesses, of
everyone involved – from the franchisee to the least-skilled
employee.
There are three main areas of leverage that can be utilized in
Network Marketing:
OPS
– Other
People’s Skills
It takes too long for the unexperienced or average
person to learn the skills necessary to be successful in this
industry. Systems must be in place to leverage and maximize the
existing skills of the experienced members of the team.
OPT
– Other People’s Time
No matter what you have been told, to be truly
successful in MLM takes time. Yet the reality is that the average
person doesn’t have a lot of time to invest into a secondary
business. Systems must be in place to do two things:
OPN
– Other People’s Network
A new person may not have time or skill, but they
do have an asset you need – their
contacts or network. Systems must be in place to empower those
who have the skill and the time to leverage and network thorough
other people’s networks.
It
is imperative the correct system be able to leverage the skills
and time of everyone on your team in order to achieve the success
you desire.
Law
of Skill
The Law of Skill states that
you must have a system by which the participant must be able to
be successful with little or no skill. They must be enabled to
produce success by training last, not first.
Would
you all agree that in order to reverse a 97% failure rate we must
develop a system where anyone can succeed? No matter what their
current skill level is?
Ray Kroc was faced with the same dilemma. In order
for his system to operate efficiently and successfully, it had
to be doable by those with the lowest level of skill. Why the
lowest possible level of skill? Simple. His system would be too
expensive and inefficient if it hinged on highly-skilled workers
requiring top wages. In order to achieve the results he was after
his business had to become System Centered instead of People Centered.
It was imperative that he apply the principles of the E.A.R.N.
Continuum discussed earlier.
The same is true within our industry. If we don’t
have a system anyone can use successfully then we will not have
a formula for true growth and residual income. All of your efforts
will fade away – just as the members of your team fade away
in failure. Our system will turn this around for you!
5%
of the people in MLM produce 95% of the results.
This is similar to the commonly understood 80/20
law or what is known as Pareto’s law. It states that 20%
of the inputs results in 80% of the outputs. But in the case of
MLM this ratio is magnified.
The Law of 95/5
is the essence of what happens when the Law of Skill and the Law
of Leverage are adhered to - the natural outcropping of these
two laws working in harmony.
It is imperative to create a system that utilizes
this reality – maximizing the skill and efforts of the 95%
to create success for everyone!
Laws
Summary
These
four laws are the essence of Ray Kroc’s System
Centered System – the nuggets of truth and seeds of
possibilities that made his system so successful.
The next three laws are not taken from Kroc’s
map because they are specific to the MLM industry. These laws
may appear self evident but in reality they are seldom used or
regularly violated.
Three
Laws of MLM
You
have to get a new team member making at least $300 dollars a month
for them to stay with you. You normally only have 60 days of a team
member’s attention and focus to accomplish this in.
$300 is a figure that the Direct Selling Association discovered
in one of their studies. 60 days is a common observation by anyone
who has been involved with MLM. Some people say this range could
be from 30 – 90 days. We have taken the average of 60.
If you are a leader you realize the importance
of this law. You also realize how seldom it happens – obviously
contributing to our industry’s high failure rate. For any
system to be effective it has to address the reality of this law...
70%
of a prospects decision to join your company is based on how they
are presented the opportunity. Only 30% is determined by the company,
the compensation plan, or the products and services.
It
becomes rather obvious then how critically important the presentation
is. If a system can not produce a top-notch presentation for even
the most inexperienced networker, it will never produce the results
you desire.
The
Law of Follow-up
The
fortune is in the follow-up. No follow-up = no conversion = no check!
In order for any system to be effective – in order for it
to be a map anyone can follow to success, it must adhere to the
reality of all these laws. It must take into account every consideration
from psychological, to business, to emotional, to societal norms,
all the way to the most pragmatic industry considerations. To do
any less than that would be to create a system that will disappear
into the same sinking hole of
failure that has swallowed so many other systems.
Our system truly meets all the criteria for success...
