Affiliate Marketing Success Blueprint – Your Step-By-Step Blueprint

So you started out with affiliate marketing with the idea that in just a couple months you were going to be making the residual income you were promised, driving the car you want and living the exact life style you choose.

You got so excited with the idea that you jumped at it, why not, it’s basically a no brainer right?. All you have to do is build a quick web page, drive traffic, build a list and BINGO! You just made your first two sales!

Has it gone that way yet? I’m here to share with you my personal experience and also the personal experience of others in how affiliate marketing turns out many people and how to save countless of hours of experimentation and actually go down the path that bring you results.

There are a number of things to keep in mind before starting any business.

I have identified four main points that are crucial to your success. They are:

- Clear Vision

- Focus

- Concrete and applicable material

- Strategic action (emphasis on strategic)

Let’s dissect these key points one by one. So first with clear vision, as with anything in life if you want to go from point A to point B you need to be absolutely clear what point B looks like in order to get there. So how do we do this?

First, identify what you really want in your life? What does you ultimate life look like? If you had all the money and time in the world what would you be doing as a result?

This has to be written down in the present tense as already achieved. The clearer the better because you will then have utmost clarity on your path to success and achieve results much faster than you are now.

Vision boards can be real assets. You cut out images of things you would like to have, a person you would like to be or a lifestyle you would like to live.

The law of clear vision is very powerful and can work for or against you.

Now for the second point, the law of focus…

Seems like everyone has a concept of what focus is nowadays. They say just stay on task and don’t get distracted, I mean I heard that when I was in elementary but do we actually do it…the answer most of the time is no.

This is exactly what I mean (and see if you can relate). You get up in the morning all excited about the next greatest thing you will be spending your time doing in your business, you eagerly open up your email and check new messages whether they be business related or not (30min – 1hr goes by). From checking your email you are curious to explore the website links of cool new products to drive massive amounts of traffic to your website so you start web surfing (1 – 2 hrs go by). Now you find a product you really like and decide to purchase it because of the sale price and then start printing out the ebook (another 30min- 1hr goes by).

The book you just bought is probably the tenth item you purchased already that relates to making more sales and getting your business off the ground, but we have one problem, your business is not even moving and your time, energy and money are going in the opposite direction.

We consume ourselves with all these products and services that all these marketers are offering, spend endless hours surfing the internet and constantly researching things all related to business but we are not moving in the direction that we want.

This very simply is because we don’t have an established plan of specific tasks and actions that will move us forward (more on strategic action bellow).

So ask yourself every day you hop into bed, what was my main focus today? What was my intention? Was it to make modifications to my Google AdWords campaign, was it to create a new thank you page for my website or was it to aimlessly browse the internet, read any and all incoming email messages and wonder around aimlessly.

I’m being quite frank here but that is exactly what is happening on a daily basis to just about everyone. Most of us have no established plan that we can give 110% of their focus and energy to but rather look for the next greatest opportunity, product or service that will make us succeed.

So we covered what we get side tracked from including materials and endless products and offers, I will cover what you should be looking for in business material and how to build a foundation of knowledge that will allow you to move forward powerfully.

So what do you want to learn about? Want to build a list? Drive huge amounts of traffic to your site? Build a profitable website or learn about email marketing? Well how on earth does one do so if there are hundreds of products and services on any given subject to choose from?

You may think that you need to find a host of good products read and study them and go from there? Or you may feel that you need to skip all that and just do the trial and error method and grow from your own experience.

I will share what has worked for me and what is continuing to work for others. The truth (from my side of the field) is to find free or inexpensive material. Go to blogs, forums, and search engines for the information your looking for, let’s say it’s traffic generation.

Find a good information source and study it (this doesn’t have to take days on end). Now this is the crucial point, let’s say you just found one product that talks about list building and another product that talks about how to write effective copy and perhaps that’s all you want to focus on. Well stick to one or two products or information services and DO NOT move on to another one until you have produced decent results with what you already have.

If you picked up a free article that talks about how you can get ten additional subscribers to your list per day in the next week and the person writing it is giving you concrete information, well then apply what he/she says and get an additional ten subscribers to your email list per day before ever moving on to another program or book that talks about another traffic method.

I have gone through this in my experience and without doing the above recommendation I have wasted countless hours spending much more than I was making with no return at all because I was literally drowning in information (commonly known as information overload).

The strategy is to find a good trusted information source, build a strong foundation of knowledge from what you read and develop and action plan highlighting the exact steps to take and start seeing results. The key again is to not move forward onto something else until you have mastered one thing and made it work for you.

This is the most important piece of advice that I can give you at this point in your business growth.

Now, last but not least is taking strategic action. I mention strategic purposely and not just in the traditional term of taking action because we have a common philosophy nowadays and quite frankly it’s flawed.

Everyone takes action towards something, that’s why their day is so busy. But the question is whether your taking the type of action in your business that makes your day busy or that makes your day productive! There is a huge difference.

What you need to do is identify the most productive and effective actions that you can take right now that will bring you closer to your goal. You need to identify with what tasks you are going to spend your time doing.

I once read that the average business person spends between 5-12% of his day doing an income producing activity. Now that’s not 5-12% after a two hour work period, not at all, I’m talking about working for 5-8 hrs.

That’s almost the same as saying that your business day was 5-12% productive on a daily basis. This may come as a shock to many people but there is a solution.

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Creating An Original Brand Identity For Network Marketing And Direct Sales Industry Distributors

In the network marketing, MLM, and direct sales industries there is some conflicting information about how to go about establishing a personal brand in the industry.

Lets look at what a personal brand is. A personal brand is a way of attracting business to you by promoting yourself in addition to or in place of your product. In these industries people do business with individuals they like or feel they can relate to. They also do business with people who come across as having insider knowledge or leadership skills.

While I do not recommend portraying oneself in false terms to establish a powerful brand, it’s a good idea to play up your strengths. If you are just starting out, your brand should be based around the strengths you bring to your new business, not the fact that you are just starting out and haven’t made any money yet.

Portraying oneself as a strong leader does not necessarily mean posing with a sports car or even dressing up for a photograph. It means telling a story that will invite people to relate to you and be curious about your business.

The fact is – there are 100s of income opportunities on the internet these days. They are mostly marketed in very similar, and unoriginal ways. A very effective branding technique is to look at what other people are doing, and do something very different.

In this particular industry there are basically two general types of branding I see a lot.

The first is the “money and cars” type of brand which portrays success in the business as a pleasurable experience and encourages site visitors to imagine having nice things and a lot of money as a part of the home business experience.
The second is the “soft” brand. With this type of brand, often used with health and wellness MLM products, the financial rewards take a back seat to having a “feel good” product. While this type of branding is often instigated by MLM companies to build product loyalty, it often functions to conceal a weak compensation plan where few distributors make much money.
Neither of these types of branding are particularly original. I would suggest that on the internet it’s a good idea to build a brand that goes against the grain of these two types and establishes a more unique sort of image for the distributor.
This is a creative process. The secret to building a loyal following and attracting customers is building a deep brand on the internet. This sort of branding cannot be bought, it must be earned.

How is a deep brand established on the internet?

Through the written word. Distributors who wish to brand themselves but are unwilling to write web content on a regular basis will struggle to create a brand. Blogging is perhaps the most familiar form of content distribution, but getting traffic to a blog requires comprehension of how information is actually distributed on the internet – the sort of marketing knowledge that is never taught in most company-provided marketing training.

In fact, some companies in the industry actively discourage or even prohibit discussion or content marketing on the internet. My only advice is – avoid these companies like the plague.

Branding with content takes time and patience. Distributing the content effectively requires specialized knowledge of how the internet really works.

Who said building a brand is easy?

Building a brand does not have to be hard, but it does take time.

For this reason, brand-building should be piggy-backed with other marketing activity. It is unwise for an independent distributor to invest money in branding-only activity. Still, most promotional activity should be done with an eye to increasing visibility of the brand.

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Key Message Sales Copy Platforms-The Secret To Increasing The Power of Your B2B Marketing Materials

It’s a simple fact. When your customers are presented with inconsistent or muddled marketing messages, they instinctively say ‘no,’ and move on. However, creating consistent selling statements throughout your B2B marketing materials can be difficult. Especially when you’re under the gun to produce a sales letter by the end of the week and a brochure by the end of the month–not to mention a print ad that’s due ASAP.

The solution is creating a comprehensive key message copy platform that serves as the “master message document” for your product, from which you can write all your marketing pieces. Effective key message copy platforms typically include the following sections:

The Problem Your Product Solves.
Every product exists to solve a problem or a meet a need of some kind. Make sure your key message platform includes a clear explanation of the specific need your product addresses, and include it in your marcom materials.

How Your Product Works.
If your customers look at your web site, brochure and data sheet and see three different descriptions of how your product works, you’re in trouble. So develop one good explanation that’s easy to follow, and use it throughout your campaign.

Market Research Facts and Figures.
Your key message platform is the ideal place to list all the key market stats, facts and figures you need to substantiate the marketing claims you want to make about your product.

Unique Selling Proposition (USP).
To effectively market your product, it’s ideal to have a unique selling proposition (USP) that makes it superior to its competition. Write a strong statement about your product’s USP, and use it as the golden thread that is woven throughout your marketing campaign.

Emotional Selling Proposition (ESP).
Next, summarize your emotional selling proposition (ESP). For example, a product that restores a person’s hearing also restores their hope and makes them feel more vibrant and confident. Capture this emotion and put it in words that become a focal point of your marketing campaign.

Product Positioning Statement.
Do you want your customers to think of your product as the high-quality, low-cost alternative to the top brand in the market? Or do you want them to think of it as the premium product that is socially in vogue or has no peer? Describe how you want your target market to perceive your product, and then write your marketing copy using a style and tone that supports your objectives.

Testimonials from industry leaders can be pure gold for your marketing campaign, so collecting them is a must for your key message platform. A renowned industry expert making strong statements in favor of your product will do more to influence the opinion of his or her peers than statements made by your company.

Product Features and Benefits.
Make a detailed list of your product’s features and benefits. Here is an example of a feature/benefit statement from a key message platform I wrote for a product called Axis.(TM) Axis is a solvent-dehydrated, preserved human dermis product that is used in surgical procedures.

oThe omni-directional fibers in Axis (feature) result in consistent high tensile strength and quality (benefit).

Key Message Statements.
Now comes the part of a key message platform where you actually get to write key message statements! The following is an example based on the feature/benefit statement I cited above for Axis.

Axis(TM) Is Strong.
Axis dermis has omni-directional fibers that give it consistent high tensile strength and quality. It’s dense network of collagen bundles interconnect in every direction–making it that much stronger. Every piece. Every time. So why leave strength to chance?

Imagine the power you will have in your hands when you include all this detailed information about your product in a single resource document–before you even begin writing your marcom materials. It’s easy to see why first developing key message copy platforms is a much better strategy than writing marcom pieces one at a time on a make-it-up-as-you-go basis.

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Free Network Marketing Leads – How to Get Free Leads For Your MLM Business

Getting free network marketing leads is a desire you and everyone else involved in network marketing has. Nowadays, most people are aware that web 2.0 (aka social network sites) such as O Jeeze, Facebook, Myspace, Direct Matches, etc. are great place to network as well as build your business.

The problem that occurs is that most people fail to use social networking sites to their advantage. As Mike Lewis in his article entitled, ‘Social Networking… and The Law of Rejection’ says:

“Surely there can’t be anyone who is involved in any social network who has yet to discover the law of attraction?

Then why is it that so many social networkers are so hung up on becoming experts at the Law of Rejection?

The Law of Attraction is all about creating an environment that position you as a very attractive person; it’s about becoming a very attractive person. It’s about showing up in a way that draws people toward you because of WHO you are, NOT what you do.”

Now, for some, those words were very painful to hear. The good news is that you can learn to use the Law of Attraction. If you learn how to do this right, you will not have any problems generating free networking marketing leads for your mlm.

So, using the social network site Direct Matches as an example let me give you a few tips on how to use your membership as a way to attract others to you.

*Do NOT pitch. As a member of Direct Matches, I am sure you have noticed things in people’s profile such as how their biz is the greatest on the planet, how you will make thousands of dollars quickly, etc. When you create your profile, do not pitch like you see other people doing. All you need to do is share your story, give a few personal notes about yourself, and then offer networking and friendship to other members. That’s it. Make sure you include your picture as most people want to see the person they are connecting with. You can put an eye catching signature file in your profile as a way to share in a non-sales way, what your biz is. People will respond to this approach much, much better and will desire to connect with you.

*Offer something of value. Give away your free report, a free ebook, any free something that can benefit people in their business.

*Ask questions as you invite people to connect with you. You can build up a friendship list pretty quickly with Direct Matches. It is best to contact the people who have joined in the last 24 hours since they will be sure to get your message. For the people who have had memberships longer and use free accounts, many will not see your email since they are only allotted a few free messages when they first join with their free membership.

After you ask the person to connect with you, also send them a brief email. In this email, tell a little about yourself, comment on their profile, welcome then to Direct Matches, and then ask what their two biggest challenges are as they build a biz. You will find that people will respond to you. This is a great way to begin to network and develop friendships.

Using social networking sites such as Direct Matches and the many others are a great way to not only meet new people, but also find free networking marketing leads for your mlm home based business. The people who ask questions will be the ones who are serious and trust you because you have a solid relationship with them.

What a great way to build a biz in a relaxed, fun, and stress free way!

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MLM Vs Direct Sales

When looking at online opportunities, most companies fall into one of two categories:

1) Multi Level Marketing (MLM) or Network Marketing

2) Direct Sales / Top Tier Sales

Anyone who decides to join either MLM or Direct Sales clearly has drive, motivation, and wants to make money online. Tens of thousands of entrepreneurs have created massive wealth with both vehicles. So what is the difference between these two?

Which one makes the most sense for you and your financial needs? Here are 4 major differences between these two wealth vehicles. My intention is that this will clarify any confusion you have and empower you to choose which vehicle suits you the best.

Difference 1: Cost of Entry
MLM’s typically cost anywhere from $150 to $1500 to become a distributor.
Direct Sales companies can range from $3000 to $20000 to become a distributor.

Difference 2: Up Front Cash
MLM’s typically pay you much less than a direct sales company to sign someone up. MLM’s often pay you anywhere from $30 – $100 to enroll a new member, where Direct Sales companies pay up between $1000 to $9500 for one sale. Therefore, direct sales organizations will give you more money on the front end to enroll someone.

Difference 3: Residual Wealth
The true power of the MLM model is in residual income. This occurs when your organization automatically purchases your companies products or services each and every month. When a member of your downline’s Autoship kicks in, you get a small percentage. This small percentage multiplied by hundreds or thousands of people on an automatic basis is where massive and sustainable residual wealth begins.

Some Direct Sales organizations have residual pay plans now. Due your due diligence into that companies specific pay plan to know how the pay structure is set up.

Difference 4: Mentality/Production
If you are someone who likes being more accountable for your income, direct sales may be for you.

If setting up a huge passive income is for you, then MLM may be your best option. The downside of MLM is it often takes longer to start producing a professional income.

Some follow up questions:
1) Do you love leading a team of hundreds or thousands of distributors? Are you OK with not making a full time income at first, yet love the idea of building a stable residual income? MLM may be for you.

2) Do you like being paid on your own efforts, your own marketing and lead generation knowledge, and want to make more money faster? Direct sales may make more sense.

Both vehicles can, and do, make people massively wealthy. Weigh the pros and cons and determine which model fits your goals, needs, and aspirations.

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Direct Marketing VS Conventional Advertising

There has always been a great debate between businesses and account executives that sell advertising. Which is better; direct marketing or conventional print advertising? Does one pull in more customers than the other?

Is one more cost effective than the other? And what is conventional advertising anyway? Well, for starters let’s call conventional advertising things like; yellow page advertising, local radio and local newspaper display ads.

Direct marketing of course is direct mail pieces being sent to the customer’s home or business. Direct-mail marketing can also be in the form of those package coupon mailings that are often sent out. Each type of advertising probably has its place and its best strategies for your particular type of business.

Do direct marketing mailings cost less than conventional print advertising? Actually, for the number of impressions in the customer’s mind the answer would be no. However, carefully designed coupons in these mailing packages do result in a large number of new customers coming into your business; more so then an advertising display ad in the newspaper.

Direct mail marketing works and it works quite well and for the price it probably is a better value for most types of businesses, so perhaps you will consider all this in 2006.

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Must Know Marketing Tips For Real Estate Investors

Good marketing as a real estate investor is more than just being able to place an ad on Craigslist for a 3 bedroom 2 bathroom home available June 1st. What you really need to understand is direct response marketing. And if you’re a real estate investor and you’re not investing significant time, energy and money into your direct response marketing efforts then you’re leaving money on the table.

You see direct response marketing is different than advertising. It is the form of marketing that is designed carefully to illicit an immediate and specific response. It has a response you can actually measure and track and improve upon over time.

Master direct response marketing and you’ll find that it’s easier to attract qualified tenants, willing lenders, motivated sellers, eager buyers, and enthusiastic partners with investment capital.

The best part is, with just the following three tips, you’ll be able to do this with less time, effort and money than you would otherwise have to spend with more traditional methods of advertising.

1. Know your market

Direct response marketing is focused on the prospect. Telling people what a great partner you are, or what a wonderful rent to own program you have doesn’t work. You have to help prospects understand the benefits of working with you. Explain what’s in it for them. In order to do that you have to understand what they want.

Research what that person wants and then use that information to attract the motivated sellers that have the property type you’re looking for and to find the tenants who want to live in that area – and maybe even will pay a premium to be there.

2. Always Be Testing!

Track where your leads come from and which leads convert into tenants, partners, lenders, sellers and buyers.

Some sources provide a lot of leads but they are never qualified. Other sources send very few leads but they are all qualified.

For example, you may devote a lot resources to placing ads in a magazine to find new joint venture partners. Those ads may send you dozens of prospects every week but very few ever invest with you. On the other hand, your referral program may only send you a lead every month but almost all of those leads invest with you. Instinctively you may be happier with the magazine ad but really you should spend more time developing your referral system because the quality of leads are better.

The only way you would spot something like this is if you are tracking your marketing efforts – and not just tracking the number of responses but tracking the number of responses that convert to your desired outcome.

3. Understand the elements of great copywriting

AWAI (the American Writers and Artists Institute) teaches their writers to create messages that are useful, unique, ultra-specific and urgent. Each message must be benefit driven with a compelling idea that inspires people to take action.

These elements are critical to every ad you run and every presentation you make.

Test it out! Post two ads for the same rental property online. Title one:

3 Bedroom, 2 Bathroom Home for Rent to Own June 1st, $1200 per month

Title the other one:

Stop Paying Your Landlords Rent! Move in to this Oceanview Home Today!

Put the same content inside the ad but just change that title. Then track which one gets the best response.

Maybe it’s obvious which ad is going to perform better, yet a quick look at any online advertising website will tell you that 90% of the folks placing ads for rental properties and homes for sale don’t get it! This makes it even more lucrative for you, if you do understand what makes a great proposition!

Begin applying these simple direct response marketing principles to your real estate investing business today and you’ll immediately see an improvement in the quality of tenants, partners, lenders and sellers that you’re attracting. And over time you just might start to find some of the money you’ve been leaving on the table as well!!

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Essential Direct Marketing Tips for Your Business

Direct marketing is not as difficult as it seems. Test, track and count your profits, that’s how I do it. Let’s break down some of the details in some of my most powerful direct marketing tips.

Make sure you know your numbers… Figure how much income and units you need to sell in order to break even. Money matters first, the percentage rate follows. Our goal is to make money, not watch out for percentage rates. The standard is 1%. Say if we get a .5% but still make money, are we going to quit? I don’t think so.

Next, you’re going to want to key code just about everything you can. This way you can track what works, what doesn’t and in the long run will help you produce a better converting direct mail campaign.
You’re also going to want to test everything. The copy, the design of the package, the offer itself, the pricing and the time you mail out. This is where they key codes will help since they will be tracking everything for you.

Be an informed list buyer. Lists are typically used for one time, as they belong to the list owner. However, once they reply to your offer, they’re yours. You’re going to have to be flexible. The list owners also require a sample of your offer, even just a rough sample to give them a heads up of what you’re going to be mailing to their list. Other things to keep in mind when dealing with lists, is the time. Sometimes lists get delivered in 24 hours, sometimes a week or two. Most list companies have a minimum of 5000 names. And almost always a prepayment is required. So keep all those things in mind when dealing with list brokers and list owners.

Start building your own mailing list. Using your customers, leads from trade shows, inquires, etc.
You need to focus on the wants of your audience. A good list professional will also be specific.
Be knowledgeable of each list type. There are email lists, direct mail lists, telemarketing lists, etc.
Consider other sources as well. There are plenty of places you can rent a list of names from. Associations, subscribers, compiled, etc.

You should determine the list price. Typically in direct mail, the lists have a base price per thousand, or “M”.

How are these lists supplied? CD, email, label stock? This can all have an effect on the timing of your campaign.

To get your envelope opened, I suggest you use a live stamp. This is one of the most important direct marketing tips I can share with you now… it’s worth the extra expense. That way your envelope will not get mistaken for junk mail. You’re also going to want to consider using a short teaser copy to entice the recipient to open your letter.

Use color in your letter effectively by using a blue signature or use different colors sparingly throughout to help emphasize your important points.

Give your recipients all the information they need in the direct mail piece. Tell them about the features, functions and benefits of your offer, the more the better!

If you’re sending out an email, be short and to the point. Use the subject as the teaser and link to your homepage in your email.

Next up, you’re going to want to use a professional. Use a list broker or company that has years of experience. You don’t want to start off using another company just looking to rip you off, therefore leaving you with no more money to pursue your project.

Hopefully you’ll consider these direct marketing tips when working on your own direct response campaign. They work for me and I’m confident they will work for you as well.

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How Much Money Should A Residential HVAC Company Spend On Marketing?

For residential heating and air conditioning business owners, a common question that I hear is, “How much money should I spend on my residential marketing efforts this year?” Most business owners should want to spend the least amount of money while attaining the highest manageable growth and net profit possible. There are target levels you want to shoot for, so let’s take a look at where you want those levels.

Before establishing what you want to spend on marketing, it is more important to know how much annual revenue you plan on making first. If you do not have an annual revenue goal, you should calculate this first, it is the single most important figure in setting up any type of annual budget. If you are unsure how to project your annual revenue goal, ask for help, there are those of us who will give you easy to understand tools and ways to set your own corporate budget!

Your target marketing budget is not always a simple decision, it largely depends on many factors like, do you sell service agreements? Is your company demand service focused or do you focus mostly only on replacements? Regardless of these answers however, a good and safe target range is 4% – 6% of your projected revenue. Some business models are much lower on that percentage, however unless you have a strong service agreement foundation, you should not go below 4%, ever!

You can overspend in marketing and you definitely can under spend as well. You always want to have a nice healthy growth in your business and you deserve double-digit net profits and a healthy happy customer base! Every year though you have to market if you want growth and want to have new customers to take care of and help keep comfortable.

So now that you know your budget should target 4% – 6%, the next question probably is, “What should I spend that money in?” In my years of experience marketing in our wonderful industry, the best answer to this I believe is, “Depends.”

No one likes that answer and it really is true, the answer depends on your consumer base and your goals. I have found however, that not putting all your eggs in one basket is a good way to market. It does not mean you will not heavily favor one type of marketing over another. In 2011′s terms, most areas still find a lot of success in direct mail, specifically postcard marketing, so for your company you might spend half of your marketing budget on direct mail, some may choose to spend 80% and then again some may not spend any on direct mail.

I believe the best mix for a company that does do direct mail, would be to have about 50% of your marketing budget in direct mail and then a percentage of your marketing in some that calls behind your direct mail. (Following all federal guidelines as the do not call registry of course). When you use this mix, the call center or person designated to call behind a mailing piece will on average double the response rate!

In addition you should have money put into online advertising and social media! The HVAC market is changing fast and a well designed website, a focus on organic results and even some PPC (Pay per click) marketing and of course social media is critical. You might also consider newsletters for retaining customers, possibly yellow pages (The internet is the yellow pages of today) and other marketing forums, it all really depends on your market. As long as you focus on targeting 4% – 6% figure then you are not overspending or under spending..

Once you begin marketing, you will want to track your expenses and your results! Decisions on where to market becomes much easier once you learn and know what is working for you. Give your marketing efforts time, some direct mail campaigns may take 5 or more exposures before you really start to see solid results.

As always, offer superior service, sell you and not your product! Take care of your customers and you will gain referral’s and enjoy caring for those precious customers who call on our ability to keep them comfortable!

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Network Marketing – What Do You REALLY Know About It?

~ Network Marketing is a method of marketing products, services, and/or ‘opportunities’ to other people you know, you know of, your relatives know, your friends know, or your cousin’s boyfriend’s mother’s sister’s co-worker’s mailman’s aunt’s father-in-law, etc., etc. knows. “Word-of-mouth” has been proven to be the most effective form of marketing. There are all sorts of names and terminology associated with “network marketing”, such as “relationship marketing” or “referral marketing”, but most of them are redundant. The two main ‘types’, or subsets, of network marketing are “MLM” or “Multi-Level Marketing”, and single-tier marketing.

~ MLM, or “Multi-Level Marketing” – This is a type of network marketing that uses a multi-tiered compensation plan. Unless you were one of the people who formed the company, you will have an ‘upline’. Normally, the person who signed you up for the MLM ‘opportunity’ is the next person above you in your ‘upline’. This is not always the case as you will find some people higher up in the company, perhaps even one of the original founders, will be out giving seminars (usually sales presentations with the fervor of an evangelist) and aggressively recruiting interested parties like yourself, and possibly anybody who came with you, to become new participants / distributors / representatives or other similar titles, now that you have heard the hype about becoming an ‘instant success’; a ‘millionaire’ who gets that way by making ‘money 24 hours a day’ while only actually working a ‘couple of hours a week’. Exciting, isn’t it? “Take your time. Promoters of fraudulent business opportunities are likely to use high-pressure sales tactics to get you to buy in.

If the business opportunity is legitimate, it’ll still be around when you’re ready to decide.” -(from the FTC)- “Consult an attorney, accountant or other business advisor before you put any money down or sign any papers. Entering into a business opportunity can be costly, so it’s best to have an expert check out the contract first. If the promoter requires a deposit, ask your attorney to establish an escrow account where the deposit can be maintained by a third party until you make the deal.” Once you have signed on, you will be expected to build a ‘downline’ of equally passionate ‘followers’ (participants / distributors / representatives / etc.) underneath you who will purchase DVD’s, magazines, flip charts, order forms, websites and other training / selling aids, just like you did when you signed up, and of course, inventory. Your ‘downline’ in an MLM will usually consist of one, two, three, or even sometimes more, people directly under you.

Each of those people will be expected to build a similar ‘downline’, for which you will usually receive some form of compensation or company ‘credit’ whenever they make a sale or recruit a new participant / distributor / representative / etc. This first tier (under you) may provide a source of ‘residual income’ for you as long as they are actively selling &/or recruiting in the organization. Historically, that is not long. ‘Downlines’ are typically the factor most critical to your success in most MLMs. Depending on the compensation plan of the MLM, you may receive compensation, or ‘bonuses’, as far down as seven levels. In the meantime, your efforts will most likely be providing compensation to the members of an equal number of levels above you – your ‘upline’. In the U.S., there is little actual regulation of MLMs, other than on a state level, and that is usually complaint driven after-the-fact. In California, there are some legal requirements spelled out in its Seller Assisted Marketing Plan requirements, but they are only applicable when the initial investment to participate in a company’s MLM ‘opportunity’ exceeds $500, an obstacle that most MLMs easily navigate around with a ‘did you want fries with that?’ strategy.

~ Single-tier marketing (a term not widely used) is also network marketing to other people, similar to MLM, but without the complicated compensation plans. It is a more traditional approach to marketing and selling and is more prone to be successful with total strangers (like the old ‘door-to-door’ business model and the current in-home-party / presentation model) than MLM as it usually does not involve aggressively recruiting or selling an ‘opportunity’ – just a product. If the product is a good product, usually so is your compensation. That compensation is based primarily on the success of your own efforts and sometimes those of a sales force under your direct control, but not the thousands of participants that MLMs can potentially involve. You are almost never more than three levels down from the main office or supplier (Ownership / Regional Manager / General Distributor or such structure). Your commissions on products are usually many multiple times that of those in MLMs.

~ Many people use the term “Direct Selling” or “CDM” (“Consumer Direct Marketing”) interchangeably with Network Marketing and MLM, and there is even a Direct Selling Association that seems to be trying to be all things to all network marketers. But calling most MLMs ‘direct selling’ companies seems to be somewhat spurious when most MLMs make more than 80% of their, and their participants’, monies by recruiting, rather than by selling products. This never-ending recruiting by so many MLMs and their complicated compensation plans is what has gotten the entire business of network marketing associated with the term, “pyramid scheme”. Regardless of whether a compensation plan is structured for you to have two, three, or more people on the first tier directly under you, diagramming the plan on paper gives it the appearance of a pyramid. Most single-tier network marketing companies that provide a good product at a fair price are still unfairly looked at by most of the general population as being pyramid-like in nature and thus share the negative connotation. But this is no more true for them than it is for any business employing independent sales people. In reality, Network and Multi-Level marketing has been around for more than half a century, with three of the top 25 companies based in the U.S., according to Nexera, still going strong after all that time. Eight of them have been in business at least 30 years. Many famous businessmen, such as Robert Allen, Donald Trump, Mark Victor Hansen, Robert Kiyosaki, etc., are proponents of network marketing.

~ One other term that many people use in error when discussing Network Marketing is “Attraction Marketing”. This is a style of marketing that can be used in nearly any venue and is not limited to network marketing.

~ Some of the attractions of network marketing are the ideas of working for yourself (being your own boss, setting your own hours/schedule), creating residual income, and (usually) little up-front investment (unlike franchising). The idea that you can create a business and an income solely from your own efforts has always been part of the entrepreneurial, or pioneer, spirit. But are you really your own boss if you want to be successful in network marketing, particularly MLM? How many hours a day or week will you have to work at this? Are you seeking an alternative source of income? What are your motives? Do you like people? Can you accept the responsibility for the failures and mistakes as well at the rewards?

BE YOUR OWN BOSS: Robert L. FitzPatrick of reports in his “The 10 Big Lies of Multi-Level Marketing” that “MLM is not true self-employment. ‘Owning’ an MLM distributorship is an illusion. Some MLM companies forbid distributors from carrying additional lines. Most MLM contracts make termination of the distributorship easy and immediate for the company. Short of termination, downlines can be taken away with a variety of means. Participation requires rigid adherence to the ‘duplication’ model, not independence and individuality. MLM distributors are not entrepreneurs but joiners in a complex hierarchical system over which they have little control.” To be your own boss, you will have to be able to generate the same amount or more of the hype, excitement, and passion that attracted you to this business in the first place. Even if you are a gregarious person by nature, you will still have to develop the marketing and ‘people skills’ that it takes to gain followers.

SET YOUR OWN SCHEDULE: Will you be joining a network marketing company on a full-time basis or continue to maintain your current work schedule and ‘work the business’ on a part-time basis? For success in any venture, you will have to put in the hours. Can you spare the time without losing any income? In network marketing, by definition, you have to ‘press the flesh’ with your potential customers. In MLM, as ‘downlines’ are crucial to your success, that interaction requirement will be magnified immensely for you to acquire, not only customers, but, new recruits on an ongoing basis. Your schedule will be dictated by when they are available and when your ‘upline’ is having sales and/or training meetings. At some point, when you are educated enough in your product or promotion, your marketing methods and routines, and the business end of networking / relationship-building, you will have to start scheduling your own presentation meetings, based on the availability of your potential customers &/or recruits. Almost all of these meetings will be in the evenings and on weekends.

CREATE RESIDUAL INCOME: “Residual Income” is cash flow that recurs continually as a result of your initial efforts. This is the goal of almost any participant in MLM, but is statistically rarely achieved. Other than the entertainment industry, there are few industries that can claim success at generating residual income without additional action, such as servicing their clients by way of maintenance. To help achieve this goal, most network marketing companies deal in “consumables” – products that, once used up by your happy customer, will be automatically sent out to the customer for as long as the customer likes without saying, “NO!” A few well-known network marketing companies have been very successful at this with their own unique lines of products, but not many MLMs; particularly those who provide a mediocre product at an inflated price to more recruits or participants than actual retail customers.

WORK FROM HOME: As long as you are working with a ‘small circle of friends’ you can probably hold most of your meetings/presentations in your home or theirs (if they’re looking at joining into your business model). But to actually make a profit in network marketing, you will probably have to widen that circle substantially, or augment your marketing with brilliant use of the Internet (The FTC offers some excellent advice to consumers considering an Internet-related business opportunity). The demographics simply don’t work to support yourself on sales of nearly any single line of products by staying in your own neighborhood. Although you can start out with a ‘localism’ approach, success with limited products &/or services will require you at some point to extend a broad reach. Some network marketers are leveraging the Internet for sales as far away as China. Credible research from the Consumer Awareness Institute and others has deduced that less than 1% of U.S. participants in MLMs make an annual profit. You will likely have to leave home to increase your income to the point of profit.

~ The odds of making a profit in an MLM (remember, not ALL network marketing is MLM) are worse than making a profit from gambling in Las Vegas. The rewards can be very high if you are one of the early-adopters in a company, are gregarious and people “know, like, and trust you”, if you have a large pool of potential customers &/or recruits to work with, and can provide all the support your ‘downline’ needs to prosper. Most network marketing companies have a very low initial investment requirement, or ‘buy-in to play the game’, so the cost to you up front is one of time more than cash. But to increase your odds of success, there are a few things you should try to find out about the ‘opportunity’ before you jump in with both feet:

1. Can the company show that they sell more products directly to consumers than to recruits &/or distributors / representatives / agents / participants / etc.? Most MLMs sell 80% or more of their products to their ‘downlines’ and less than 20% to retail customers. This is why the term, “pyramid scheme” is frequently applied to MLMs and why many of them are sued in states’ courts for their questionable business practices. Do your research.

2. Are the company’s products the same ones you can find somewhere else for less money? If they’re not the same, are they similar? Do they have the same makeup or contents? Besides you, what would be your customers’ motivation for dealing with you as opposed to just picking up the same or similar product on their next trip to the grocery store or mall? The FTC says, “If the business opportunity involves selling products from well-known companies, call the legal department of the company whose merchandise would be promoted. Find out whether the business opportunity and its promoter are affiliated with the company. Ask whether the company has ever threatened trademark action against the business opportunity promoter.” Do your research.

3. What kind of support and warranty does the company provide for both you and its products (They must provide excellent support)? Does it accept returns? Are there restocking fees? Is there 24/7 access to someone in customer support and your ‘upline’ management? Have there been any product recalls? What kind of history does the company have? How long has it been in business? What is its rating with the BBB? Have there been lawsuits against the company? Has Consumer Reports reported on the company or any of its products? What kind of marketing & advertising budget / plan does the company have over & above what you would have to do on your own? What kind of publicity has the company produced or plans to produce? If the company is new and you are looking to ‘get in on the ground floor’, what can you find out about its founders and top-line management and their history and backgrounds? DO YOUR RESEARCH.

4. Who actually makes the money? Make sure that you completely understand the company’s compensation plan and just how & where you will fit into it, and what you will have to achieve to become a “success” with that company. How is that success measured (you can’t eat blue ribbons and trophies)? What percentage of participants in the company are successful. What is the dropout rate? Is the person who interested you in this venture making any money? The FTC says, “If a company claims its participants can earn a certain income, then it also must give the number and percentage of previous purchasers who achieved the earnings. Get these earning claims in writing.” “Results may vary.” The FTC requires most business opportunity promoters to give potential purchasers the names, addresses and phone numbers of at least 10 previous purchasers who live the closest to the potential purchaser. Ask questions. DO YOUR RESEARCH.

~ Besides the FTC, another government agency, the Bureau of Labor Statistics, has information online in their Occupational Outlook Handbook, 2010-11 Edition – This covers Direct Selling vs. MLM, Network Marketing, etc.

~ You CAN find well-established, reputable companies out there that depend on sales of their products &/or services to consumers more than recruitment or sales to distributors / representatives / agents / participants / etc. You will appeal to them because of your network of friends, relatives, and acquaintances (your ‘warm market’) who are more likely to listen to your views of a product or service – your ‘word-of-mouth’ – than they are proven to be from conventional advertising. Just remember to

Copyright 2010 – IMSI / Bite The Recession

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