Tuesday, July 8, 2008

The MLM Failure Rate??

The following is a post I ran across on www.wahm.com by Tony Rush. (I took that name of his company out - but you can see it on his website if you want to go look.) I thought it was an excellent explanation and I hope to hear your thoughts about it:

"The problem with the 99% so-called "failure" rate is that it's misnamed. The fact that the majority of people don't succeed has nothing to do with them "failing".

Let's say a person wants to be a black belt in Tae Kwon Do. They want to know how many people take Tae Kwon Do classes and -- of those -- how many people achieve the black-belt level. Say that figure is 1% (I have no idea). In their minds, this represents a 1 out of 100 possibility for them. And so this person will assume that their personal "odds" are 1 out of 100.

And this is their mistake. The 1% figure doesn't exist because 99% of people "fail". It exists because most of the 99%ers are just taking up room.

Tae Kwon Do is one of those things that have an easy-entry. You can show up on a Tuesday night, pay some money for a uniform and technically be "in" Tae Kwon Do. But that doesn't mean you're committed.

On the other hand, if you're someone who is seriously passionate about becoming a black belt and you're willing to commit the time, effort and energy to do the work....then your "odds" of becoming a black belt are about 100%. Seriously. 100% success ratio. For every person who says "I'm going to be a black belt" and then actually does what is required to achieve it.

And it's the same thing in our business. I don't regularly see people who who are doing exactly what we teach in XYZ Company who are not getting results. And when I DO run across someone who says, "Hey, why am I not getting results?", I can usually ask them five questions and find that they are skipping one or more basic principles that we teach in our business.

And when they correct their activities and actually start doing what we teach....then the results show up.So, success is not a matter of "odds". It's not a slot machine. It's not a lottery. It's a CHOICE. And since anyone can choose to actually do the things that create results.....then anyone can choose to be successful.

Make sense?"

Although Tony is not with Mary Kay, I thought his post gives an excellent explanation about the supposed failure rate of MLM that we hear so much about.

Thoughts? Comments?

67 comments:

  1. Wow, great post. I also think the principle applies as far as "loosing money" - I guess one could say that because they quit and didn't get to black belt, that the money they paid for the lessons they received, was "a loss" and yet it wasn't because they received the training, for the time they were there. As with MK you receive, whatever training is available (Intouch, Meetings, Guides, etc..) and you also have the ability to purchase the products at a 50% discount, the ability to return products using product replacement, etc.. I feel that many choose not to continue their Mary Kay careers - this doesn't mean that they lost money because they decided not to continue with their biz. (or if they did loose money, it was because of poor money management = not the business model).

    Another thought popped into my head as I was reading pt, I feel that many that have gotten into MK- got in for wrong reasons or moved up the career path for the wrong reasons. Seriously, as much as they knock us directors and the NSD's about being money hungry and greedy and selfish, one of the biggest complaints is they joined MK to make the big bucks for working parttime hours. Is that not in itself greedy? - By the way - does anyone have the exact figure that determines, executive income?? Seems to me that this term is pretty subjective, depending on the view of the individual hearing the statement. If you live in a large metro city, the figure is going to be alot larger than if you live in a very rural community....but both would be considered executive income even if there was a $50,000 difference.

    Good ole' pinkpeace says in her not quite so accurate description of a Saturn Director that they reason she wanted to be a director was to wear the suit! - well?? Because she wanted that suit so badly for so long. Doing things for the wrong reasons, usually don't bring the results most people would like to have (this is based on my experience).

    And the mlm failure rate, - the report seems to leave more questions than answers and... I have yet to see difinitive proof that MK is an mlm. I have consultants in my unit, a couple for 12+ years, that make money from selling the product and have never recruited a single individual. So if they are making money and have never recruited, this would mean be the description that they are not in an mlm, right?

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  2. I studied very carefully Taylor's and Fitzpatrick's writings on this 99% failure rate business. They claimed that only the top 1% made the big money. I think they called it "significant" income. No actual dollar value was given.

    All those consultants who work their MK businesses to earn a couple of hundred extra dollars each month are lumped into that 99%failure rate group.

    All those consultants who are SAHM's and work their MK businesses for grown-up time with other women are lumped into that 99% failure rate group.

    All those consultants and directors who work their MK businesses for a modest income (they are not looking for "significant", they want just enough for their needs) are lumped into that 99% failure rate group.

    For example, MK4Me would be considered part of that 99% failed group simply because she is not making as much money as the top 1%. Same with Speaking the Real Truth. Neither of these women is a "failure" by any stretch of any imagination. (Except Taylor's, Fitzpatrick's, and their followers!)

    Oh, yeah, the 99% so-called "failure" rate is definately misnamed.

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  3. LOVE this post! I think most of us posting on this blog would fall into the "failure" category. I will be happy just replacing my NONexecutive income with my MK because that means I can leave this J-O-B and work for ME! ;) Plus, although I have not met this goal YET, my business has pulled me and my husband through some very financially trying times in the past two years alone! When I started MK, I was looking for a hobby. I just wanted a way to spend my time since I wasn't dancing anymore. MK seemed like a good fit for me. There's still a sense of purpose and ultimately, goals to strive for. It presents me with challenges. When times got tough, my hobby came through and helped pay our bills! Failure? I don't think so.

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  4. Right on, Shades of Pink! You ARE a success story!

    To just arbitrarily use a dollar figure to define success is, IMO, seriously wrong.

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  5. Rebecca pointed out:
    For example, MK4Me would be considered part of that 99% failed group simply because she is not making as much money as the top 1% -
    oh no, what's a girl to do????

    Excellent point Rebecca

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  6. I would have to think that they are using success in the monetary sense, not the hobby sense. If you are able to make an actual living. If you joined to earn a living wage, not hobby pay, and you are unable to do that, the job is a failure.

    The job, not the person. Calling someone a lazy, loser just because they didn't make you any money shows what type of person the name caller is. Is that they type of person you want representing your company? Or will you do whatever it takes to find these people and get rid of them? After all, the public, who sees the desparate, hungry consultant, does not know they are independant contracters. All they know is that crazy person is the mary kay lady. Run!

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  7. Actually, Judi, success is relative. What you might consider to be a failure, someone else may consider a success (just a small one). It's a glass half full glass half empty deal, IMO.

    I could sulk that I haven't replaced my income with MK and consider myself a failure, or I can be excited about the small successes I have had in MK: better self esteem, a network of friends, rainy day money, time management improvement, money management, better organizational skills, emergency money, etc. Some of the successes are monetary and others are personal. Oh, and I haven't lost thousands of dollars in MK. ;)

    I prefer to enjoy the benefits of MK while regrouping and rethinking and trying new methods to reach my ultimate goal.

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  8. I agree, Shades, that is why I said monetary success. Money that you can live off of, not hobby. Your success in MK has nothing to do with anyone else.

    I was successful in MK in the fact that I have yet to run my director over with my car. :) hee hee

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  9. Judi, (just joking- hehehe) I nominate you for the Go-Give award for having such restraint! From what you have shared, it must quite a challenge some of the time -(not to run her over) -or leave an Avon catalogue on her doorknob!

    Glad you can at least chuckle about it!

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  10. I totally agree that whether or not you are a success depends on your goals. You may just want your products at cost and $ 50 extra per week. If you meet that goal, you are a success!

    Our SD used to set goals that were far above 99% of the rest of the unit (we had 1 DIQ who was full time MK, no other JOB - no small kids). Everyone else worked at least part time & had kids! I felt it was very discouraging and people just quit coming to the meetings.

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  11. So, MK4Me, whatcha gonna do? That money you make, your profit? Must be your imagination! (ROFLMBO!!)

    What irritates the cooty outa me about the 99% failure rate mantra is how it keeps morphing.

    The following is my understanding based on my own reading/research/study:

    First, Taylor claims he called a bunch of CPA's and asked them if any of their clients involved in an MLM made a significant income. Supposedly these CPA's said very few. Thus giving birth to 99% fail, only 1% make significant income.

    This income is NOT defined. i.e. 1% made over $xx,xxx annually. 99% made less than $xxx annually.

    99% do not make significant income; only 1% make significant income.
    morphed into:

    99% failure rate; 1% success rate.
    which morphed into:

    99% fail so that the 1% can succeed.
    which morphed into:

    99% lose money, only 1% make income.
    which morphed into:

    99% must lose money so the 1% can make money.

    So when us Kaybots insist that we are not losing money, we are actually paying bills, vacations, making a profit, it gets morphed into:

    we don't make an executive income therefore we are 99% failures; which morphs into:

    we don't make a living wage therefore we are 99% failures; which morphs into:

    we don't make minimum wage therefore we are 99% failures; which morphs back into:

    99% must lose money so the few 1% can make the big bucks.

    Arrrggg!!

    Which takes us right back to, so sorry, MK4Me, but according to "them", you are losing money and are therefore part of the 99% failure rate. Har har hardy har har!

    On the other hand, if the anti-MLM people were saying that only 1% make the big bucks and 99% don't make near as much, then I could accept that. Why? Because also in my research I found some pro-MLM sites and one said that 85% join a MLM for the social aspects and for a little bit of cash. (Sorry, I don't remember the web site and I have not been able to find it and I no longer have any inclination to continue to look for it. At this point, I am merely relying on my memory.) This also is affirmed to me by my own observations of MK people and hearing their satisfaction with their goals and achievements.

    Which tells me that the anti-MLM, anti-MK bunch consider us to all be insignicant. Which also tells me that the anti-MLM, anti-MK bunch are greedy materialists because the only thing that matters to them is very large ("significant"!) sums of money.

    It tells me, too, that they apparently think we are too stupid to know if we are making a net profit or a net loss. I can only speculate based on the comments here on this blog, but I'm guessing that we all find it very easy to tell the difference between a net loss and a net profit.

    :D

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  12. OMG Rebecca, what an astute observation and well documentated explanation.

    But I am hanging my head, I just don't know what to do, I am still in the 99% group! ;)

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  13. A few thoughts:

    On your way to achieving your black belt, how much will the others in your class benefit from the hard work you are putting in?

    Will your instructor receive a Dan grade because of the help he has given you?

    Have you had to purchase more suits and equipment than you will ever personally use?

    My issue with mlm is that, even if you fail, it is likely someone else will have profited from your efforts.

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  14. I don't know about achieving a black belt, but I can relate to the dance world. You pay literally thousands to go to classes, buy leotards, tights, and pointe shoes are NOT cheap (and if you're strong you are buying at least 1-2 pair per month at $60/pair)! If you decide to audition for companies you are paying travel costs plus audition fees. You have to pay a photographer for your headshot and other photos.
    Then you get to the auditions and you are literally up against THOUSANDS of others with the same goal as you. The company you're auditioning for may only have room for 2 dancers. Little do you know that your counterpart already in the company is 5'2" and you are 5'5". You're already not getting the job.
    Let's say you are studying with a school that is part of a company. You're good enough to be a professional, but your artistic director would rather take your money than pay you. Then she uses the revenue from you to pay professionals from other states and pay their way to come in.
    Her efforts benefit herself and only herself.
    And what percentage of the dance world are principle dancers? It's not large.
    And in order to get anywhere in the dance world and be GOOD you MUST be dancing at least 25 hrs/wk and that is a very conservative number. And you success as far as a career is concerned is dependent on someone else's opinion.
    Hmmm....

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  15. Oh, and I'll add that a dancer's "salary" is typically $18K-$25K and that's if you're lucky. And you have no say in your pay. The budget is what it is. You can't "dance harder" and make more money if you're at the top already.

    So, by some people's standards, all dancers are monetary failures. Most dancers work other jobs to supplement their incomes. Many wait tables at night or teach dance classes or work more than 2 side jobs. Others marry rich. ;)

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  16. There's no way I'd call a sexy dancer in a leotard a failure! :D

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  17. Hey Scam, do you feel the same about male dancers in leotards as you do female dancers????

    hehheeeeehhhheeee

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  18. mk4me - 99% of male dancers in leotards do absolutely nothing for me!

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  19. hahhaaahaaa.....
    Now we see how easily statements can get turned !around....heeeehhheeeee

    Thanks for the chuckle Scam!
    Off to the grocery store.

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  20. LOL! 99% of male dancers in leotards do nothing for me either. Hee hee! Just not sexy!

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  21. Whilst we're on the subject, and I know David is rather shy about this, but has he shown you his leotard photos yet?

    He is the 1% that looks rather fetching :)

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  22. Hey man... I thought we had an agreement.

    I am sure you don't want me telling everyone about.... well... you know.

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  23. you "guys" are too funny.

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  24. Too right I don't want you telling anyone about.. you know..

    (If you did, I'm sure the sheep would sue you anyway)

    ;)

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  25. oh yeah, there's the sheep thing too.

    No, I was talking about... the other... well... you know... the other thing.

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  26. Look David, I told you before, that thing with the skunk. It was just a misunderstanding, ok?

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  27. Right... We've all heard YOUR side of the story...

    ;D

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  28. No, you mean you've heard HALF of my story - I haven't told them about you and the.. ahem.. hmmm.. how do I say this politely?

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  29. Like I said, we both have stuff that we have agreed to keep between us.

    You start talking leotards and pretty soon every one reading this blog is going to be an innocent turned casualty in a war no one wants... wait a second... that sounds... oh, never mind.

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  30. This comment has been removed by a blog administrator.

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  31. tut tut, editing out your dirty little secrets!

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  32. Sorry man, I had to delete it. Very funny, but I am really trying to keep this site "safe" and I don't have time to really explore that site to make sure it is not endorsing... what am I talking about... that is gross and I don't want a link to that site from my site.

    Sorry to everyone that is following along with great interest... scam will now have to be "deleted (2)"

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  33. Well at least I don't pretend that I didn't do it...

    or are you still pretending that you never deleted MY comments on YOUR site?

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  34. You know me - I wouldn't link to something unsafe on your blog.

    Gross maybe, but not unsafe!

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  35. Have I deleted your comments on my site before???

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  36. True, and I trust you for the "safeness" factor, but I like to maintain a "family" style site and well I am trying to stay away from "duh" territory!

    **

    I knew you would pretend to not remember deleting my comments

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  37. I honestly don't recall deleting any of your comments - if I have then I apologise.

    I'm gonna butt out of this now because I don't want to hijack the comments on what is a very good post.

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  38. Fair enough. It was a joke. I told you "It feels really great to delete a comment" (or something very similar) and then "dared" you to try it.

    You deleted that comment.

    I said, "see, feels good doesn't it"

    And you said, "what are you talking about"


    And we went back and forth.

    **

    Also, you are right, we should not hijack this great post with our silliness. Good times though, thanks for bringing back the good memories! Nice to host the "chat" over here too!

    Have a great day scam... say "hi" to scametta for me!

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  39. hmmmm...
    Scam are you saying David is part of the 1% of the males that look sexy in a leotard!!! Do you both have "dirty Little secrets"??
    Okay really off to the grocery store this time.

    rotflmoa... deleted (2) - good one!

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  40. Secrets?

    Bah!

    Mine's bigger than David's !!!

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  41. You ARE referring to your secret, right? Because if you were referring to something else, I might have to delete another comment.

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  42. This post has been removed by a blog administrator.

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  43. well, I guess that saves everyone some time!

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  44. I don't know what you were thinking of David but I was referring to the size of my...

    ...

    ....

    .....

    ......

    ....... EGO!

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  45. Than I shall let you live...

    (from arrested development)

    " Michael: Great. I was wondering if you might be willing to go somewhere with me. I would pay you.
    Rita: You’ll pay me?
    Michael: Not... Not for sex. You’re going to think that I’m Jack the Ripper, right? Didn’t he kill prostitutes or...?
    Rita: I’m not a prostitute.
    Michael: Then I shall let you live. "

    http://en.wikiquote.org/wiki/Arrested_Development

    almost to the bottom...

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  46. MK4Me, I'd rather be in the 99% group that includes you than be in a 1% group that includes "them". Ew.

    Oh, wait... I AM in that 99% "failure" group, too, right along with you, MK4Me! Shucks. I guess that money I've made in my MK business that I use to pay bills and buy groceries is just my imagination, too. Oh, woe is me some more.....

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  47. Just got back from the bank making a deposit into my MK account. I'm turning a profit (however big or small), having fun with friends and doing it all ethically.

    I have personally chosen not to be one of the 1% since I am not willing at this point in time to put the effort and hours into it that I realize it would take. But that does not mean that it is not possible, just not my choice at this time. So call me a failure if you wish, but I know I am a success in this business.

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  48. I feel quite honored to be "one of them" Rebecca, though I'm not quite sure what I'm meant to be one of?!?

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  49. aawww shucks, thank you muchly Rebecca, and I am proud to be a part of the 99% er's that hand around on this blog!

    And, I couldn't agree more, I make good money, pay my bills , have money for vacations have no credit card debit, (ok - I have a little but it ain't from MK) it is from my shoe and purse fettish! I am $3500 dollars away from paying off a $40,000+ Dodge Diesel Extentded Cab Short Bed truck that my hubby adores (almost as much as me) thanks to the Cash Compensation from MK - work less than I did in Corporate, have the flexibility that I LOVE (hubby works third shift) - and love working with my clients and unit members. I do it honestly and ethically, if it isn't good for the consultant it isn't good for me. Our production comes from working consultants, new consultants build their inventory as they build their client base. and.... we are all happy. We are a high selling, not high recruiting unit, I have consultants that have been with me 13 years - all happy in their MK business. One more kiddo to graduate high school and then I will be willing to work more. My "reason" for MK was not to have babysitters rasining my kids and then I found the teenagers actually need you around more when they get out of school then the little ones.

    I can live with being in the 99% that fail! I okay with it!!

    And... if being in the 1% club means I have to sacrifice my integrity and change - then I will choose to stay in the 99% club.

    Okay, I'm off my soapbox.

    -Glad to see David and Scam settled down - "Ego" yeah, right!!

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  50. Ha! Glad to see everyone having fun while I was gone!

    :D

    I love Tony's explanation about the 99% thing.

    Scam said:

    "My issue with mlm is that, even if you fail, it is likely someone else will have profited from your efforts."

    So what? People profit from your efforts in a regular job - why not MLM/Network Marketing?

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  51. OOOOHHH I love you when you're fiesty Shay :D

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  52. Ha! Shay said so simply what I was depicting with my huge dance analogy! LOL

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  53. speaking the real truthJuly 10, 2008 at 7:46 PM

    I haven't had much time to comment on this or anything else lately. I haven't shared it here, but my son was recently in a very serious auto accident and will have more surgery next week, my father in law will have a cardiac cath in the am, my husband's uncle is on his death bed, and my new Saturn Vue was hit by a Hummer in a parking lot. What a Summer so far!

    BUT, I have to comment about this 99% thing. Since he has no access to Mary Kay's numbers, how can these people even come up with this 99% number? Also, why doesn't anyone ever talk about how many people never come into the company to make a profit? that skews the numbers greatly. And also, the other benefits, with all that has been going on in my life, to have the flexibility that I have right now is PRICELESS, and I would venture to say that at least 90% of working women do not have that kind of flexibility!

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  54. oh STRT, you just brought tears to me eyes as I recall what we went thru this year with our son and a horrific automobile accident. God is good and our boy is about 95% complete and it truely a walking miracle. I was amazed at the support from the MK world, we got cards from all across the Nation, plants and flowers from Corporate, offers from other directors to help my unit members. - It was absolutely overwhelming and after sick and vacation time was wiped out, there was one person that could sit beside the bed and was still earning money!!


    Please know I will be keeping you in my prayers. It sounds like you are getting your yearly vitamin dosage. Remember, what does kills you, makes you stronger, so I always figure when I get thrown a whole bunch of yuck, it is my vitamin to make me stronger!!

    Make sure you check out the above post, I finally got it written but tried ot to make is 4 pages long and figured the cmments would prompt more discussion.

    Hope you month settles down.

    Pink hugs, mk4me

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  55. And before anyone makes fun of me, I end up with tears in my eyes alot, I am highly sensitive, Did any of you see the Greatest America's Dog??? Oh, when they decided which doggie and owner to eliminate , I felt so made for them, I cried!

    Just an old softie!

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  56. speaking the real truthJuly 11, 2008 at 6:33 AM

    Thanks mk4me. Your story is partly why I get so sensitive about our Mary Kay world. The friendships and support that I have there are amazing. The morning after my son's accident I received a call at the hospital from my Sr. NSD, and one of the few cards that my son has received (people just don't send cards as much anymore) was from a Mary Kay friend. We have had as much or more outpouring from the Mary Kay world than from our own church.

    Am I protective of Mary Kay? Yes. It means a lot to mean, in a lot of ways.

    I am so glad that your son is improving. God was very merciful that my son's injuries were not worse. He still has a ways to go, but he will be fine.

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  57. STRT -

    So sorry to hear how things have been for you! (((((((((((((((HUGS))))))))))))

    You will be in my prayers.

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  58. Scam -

    You are such a flirt. ;)

    Stop before Scametta gets jealous. :p

    :D

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  59. You love it!!

    Are you feeling better yet Shay?

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  60. Scam -

    Yep, you're right. I do love it. ;)

    Yes, I am feeling better. I have been sick (bronchitis) for 2 weeks, but I am finally feeling human again.

    I plan on getting my post count back up on your blog soon. ;)

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  61. I'm looking forward to that.. I enjoy flirting with the older women :D

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  62. That works out great! I like younger men. ;)

    Hubby is a younger man. Hehehehehe

    Come to think of it, the Ex was a younger man, too.

    Hmmmmmmmmmmmmmmmmmmmmm.......

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  63. Would it not be fair to say, considering your age, that EVERY man is a younger man? :D

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  64. Wow, Scam. That's mean. :o(

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  65. It's late.. think I'm going cuckoo crazy!!

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  66. speaking the real truthJuly 11, 2008 at 3:51 PM

    This failure has sold over $300 today without even taking a shower, HAHAHAHA! All while waiting to hear when FIL will be having bypass surgery and waiting for word that UIL has passed.

    Thanks Shay, you are always so sweet!

    Everyone have a great weekend and week, family calls!

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For Further Reading...

This Week On Pink Truth - Click Here
Pros and Cons of Mary Kay - Read or Contribute or Both!
First Post - Why I Started This Blog
The Article I Wrote For ScamTypes.com (here) (there)
If this is your first visit please leave a comment here. I would love to hear from you!
If you want to email me: balancedmarykay@gmail.com
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