How the Recession Affects MLM
Should you spend time on network marketing when the economy is in a downturn?

Entrepreneur Magazine Online — Ask the MLM Expert

by Michael L. Sheffield
CEO The Sheffield Group

Question: I've been working with a network marketing company and am concerned about what others are saying about us being in a recession. How will this affect my business? Should I be spending my efforts on this part-time business right now in these uncertain times? Should I focus on retail customers or on building my sales organization?

Answer: Whether or not we are in a recession is a topic I'll leave to the economic wizards. However, having worked full time in direct sales and network marketing through several times of faltering economic indicators, inflation, unemployment, layoffs, etc., I have some thoughts on this matter.

In today's news, you get mixed messages. But if we are in a recession, what does it mean to you, the distributor? If you're not doing anything and looking for an excuse not to do anything, a recession is about as good a reason as any.

But if you're serious about your network marketing business, then, believe it or not, a recession could be the best thing that's happened to you in a while. Shaky economic times have historically produced a renewed awareness of the need to make more money. You'll find people who were previously uninterested in your business are suddenly looking for new financial opportunities. They want a business that doesn't require a lot of capital, allows them to establish their own hours and offers rewards that can grow faster than capital or labor requirements.

Sound good to you? It's the business you're in right now!

While other businesses offer one or more of these benefits, only a true network marketing plan can offer all three. The reality is that leveraging your time through the multiplication process of network marketing is the hardest principle to teach others, yet it's the easiest to attain if you're involved with the right company and right product at the right time. It's such a simple concept, people sometimes refuse to accept it as being something that could actually work for them. They suffer from "analysis paralysis," trying to figure out why it won't work rather than why it will, making the whole process more difficult than it really is. But when people are motivated by concern for their financial future, the sponsoring process becomes much easier. Spouses are more supportive of their partner spending extra hours working to create more financial security for the family.

If you're pre-planning for uncertain times, consider that customers scrutinize your product or service more when dollars are tight. Is your product or service a "need to have" or a "nice to have"? Products that are necessities rather than luxuries do better during times of uncertainty.

Do you focus on retail or recruiting? In network marketing, these are never exclusive. Building a strong retail customer base is critical, but you must recruit others to duplicate your efforts. Learn the success formulas for yourself, then teach others to achieve that same success. There is no other way in network marketing. You can't achieve significant success on your own — you only have so many hours each day. Nor can you sponsor that one hotshot person who'll make you a success while you sit back and watch the dollar bill sprout wings and fly into your mailbox. You need a plan to duplicate your efforts through many others. It's a vivid example of the biblical admonishment, "as ye sow, so shall ye reap."

Network marketing is and always has been a person-to-person business, so nothing happens until two people talk. During recessions, talk to people about protecting themselves against an uncertain future via network marketing. As Ralph Waldo Emerson said, "It is one of the most beautiful compensations of this life that no one can sincerely try to help another, without helping themselves."


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About the Author:

Michael L. Sheffield is the CEO of The Sheffield Group, a full-service direct sales and multi level marketing (MLM) consulting firm. He is a Co-Founder and Chairman Emeritus of the Multi Level Marketing International Association and in 2001 he was inducted into the MLMIA Hall of Fame. He and the Sheffield team have assisted in hundreds of national and international MLM corporate start-ups as well as offered a full line of services for established direct sales companies including consultation on MLM Website development. As the most noted expert on compensation plans, he has been a guest lecturer on the subject for the DSA, University of Illinois, University of Texas, Berkeley and Harvard Alumni Association. He has helped launch over 200 new products marketed by direct selling companies around the globe. He can be contacted at 480-968-6199, The Sheffield Group, 2239 N. Hayden Road, Suite 103, Scottsdale, AZ. 85257, website address:


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