Top 6 problems in network marketing companies


Updated on Feb 9th, 2022
11 Mins Read
Top 6 problems in network marketing companies

Today, creating a robust marketing network is a significant goal for any successful organisation, regardless of the field in question. It is all about growing that network with the appropriate resources in place for network marketing.

"Good marketing makes the company look smart. Great marketing makes the customer feel smart." – Joe Chernov

In today's day and age, the affiliate marketing system has become a premium model for promoting products and services. So, it is rather peculiar that network marketing companies that started the trend don't get enough recognition. Even though many such organisations operate within legal bounds, there is still a stigma due to a few bad seeds.

Throughout this article, you'll learn about the possible hurdles that a typical MLM organisation may face, when they might be most common, and how to solve them using practically effective methods.

What are the Different Stages of an MLM?

You can't just register an MLM business and start recruiting people to sell your products directly. In order to make the most of it, you must understand the benefits and disadvantages such a firm has over a run-of-the-mill company.

Unlike traditional markets, products sold through multi-level marketing companies don't need storefronts or enormous supply chains. They comprise an independent system that can directly sell products through affiliates—as such, setting one up remains in stark contrast with other businesses.

Networking marketing companies take shape in a definite method:

1. Preparing

This stage is the most crucial since you have to determine the face of your business model. To ensure that your market practices are fair and legitimate, you have to go through a mountain of paperwork from various agencies, from the FTC to the justice department. It also involves determining the product or service that you wish to provide for direct selling.

2. Launching

This stage is the most crucial since you have to determine the face of your business model. To ensure that your market practices are fair and legitimate, you have to go through a mountain of paperwork from various agencies, from the FTC to the justice department. It also involves determining the product or service that you wish to provide for direct selling.

3. Growing

Once you've successfully set up your MLM organisation, it is time to start recruiting affiliates and expanding it further. It involves creating marketing campaigns, training manuals, and supply modes that keep the products stocked.

Problems in Network Marketing Companies and How to Avoid

Despite spearheading affiliate marketing, many network marketers often find themselves on the bear's end of the business. Many such professionals can face a few critical problems listed below. You'll also find a proven solution for each respective one to alleviate the issue.

1. Building Credibility

The credibility of your marketing network is something that you have to plan from the preparation stage of your organisation. Unlike in earlier days, you can't just sell the idea of your network for monetary benefits. There have to be assets that people outside the firm can observe and acknowledge.

Still, this is a crucial part that amateur network marketers fail to include in their venture. Sure, they can convince their close group of trusted associates for the first few steps, but the program quickly falls apart by the 3rd or 4th cycle without tangible products or services to sell.

It is best to start with creating an online presence for the digital times. According to Stackla, 88% of consumers consider authenticity a critical factor in deciding which brand to support.

That statistic becomes highly relevant for social media. Create a platform that tells your potential associates about the organisation in detail and keeps all commissions transparent. You can generate better results than any chart or in-person pitch.

2. Lead Generation

Once you know what kind of people are interested in your services, it is time for lead generation. It is an enormous hurdle for the fresh recruits in multi-level marketing companies, especially for the ones who have never worked in marketing before.

To generate quality leads, you need a set of recruitment tools that makes the process of generating leads better and faster. Additionally, you need an extensive database that regularly updates the stats for your networking campaigns. You can achieve all that and more from personalised software from Global MLM.

3. Sales Prospecting

Once you gain enough leads, the growing part of your firm begins. Sales prospecting involves studying the leads and filtering them into different categories as per the probability of conversion. You can’t expect to exercise the same approach for everyone and come out on top each time.

Yet, this is where several multi-level marketing companies go wrong. Instead of curating the pitch according to the leads, they pitch the same idea to each one, not knowing that every person has different admirations and expectations. A well-off movie star might not require money, but if you convince them that they can grow their fan base through your MLM, they’ll be more than happy to sign up. On the other hand, a full-time employee might not have the incentive for money, but for the fact that they can set their own working hours.

It can be a difficult task to manage thousands of leads that you've obtained through referrals and online campaigns. But, it is doable within a reasonable timeframe by using MLM CRM System. With it, you don't need to upgrade to another version as your organisation grows, letting you retain a flexible structure that is easy to understand and can filter hundreds of thousands of leads at a time.

4. Recruiting and Retention

Keeping the recruiting process going with consistent customer retentionis essential for all network marketers. It is not enough that you get more people for direct selling. If you don't train them into valuable marketers, your chain can grow cold before you could say, "It is windy in Siberia this time of the year."

A robust Standard Operating Procedure (SOP) should be a priority for your network marketing strategy from day one. It would be best to understand what benefits your products offer from direct selling and how to draw the correct audience to them. To assist in doing that digitally, you can create specific marketing campaigns using social media, search engines, and landing pages in tandem.

Just because a few prospects of your audience didn't convert now, it doesn't mean you can't convert them later. Unfortunately, it is a pressure point for many emerging network marketers who often disregard cold leads entirely.

To remarket or follow up on previous leads, it would be best to use digital automation software that can keep a record of hundreds of thousands of prospective conversions. An MLM marketing system with notes and reminders can help you develop just that.

5. Duplication and Training

You can convert a lead on your own but developing the same skill in others is challenging. You can't expect any of your associates to meet their goals the same way you do. That is why duplication and training become a vital part of any MLM organisation.

However, many fail to replicate the initial boost of success. It is a crucial factor to consider as to why 90% of network marketing initiatives fall within the first 2 years. The first few within a close group of people might recognise their product and recruit dedicated executives, but somewhere down the line, the drive vanishes.

To keep the progress going, it pays to study your previous methods and develop case studies for those that work. Further enhancement comes from focusing on training recruited individuals. It doesn't just mean providing them with the study material but also planning interactions and helping them engage digitally with their audience. MLM Learning management system provides you with an integrated platform to do just that.

6. Technological Adaptation

In the dynamic landscape of network marketing, the challenge of technological adaptation looms large. As digital platforms and communication tools evolve rapidly, network marketers face the imperative to stay technologically agile. Embracing the shift towards digital marketing strategies, optimizing content for mobile consumption, and integrating with e-commerce solutions have become non-negotiable.

Furthermore, the smart utilization of data analytics is pivotal for informed decision-making and crafting personalized customer experiences. The integration of virtual communication tools has become a cornerstone for effective team collaboration and training, particularly in a globalized business environment. Successfully navigating and embracing these technological shifts is not merely a challenge but a prerequisite for network marketers aiming for sustainable growth and success in today's tech-driven landscape.


The key to making your MLM a success is to keep up with the trends. Relating to a digital generation means building a business around the means more familiar to most prospects. Most of the issues that newer firms encounter can be solved digitally. It enables swift solutions without the need for extensive resources.

The objective of any business venture is to turn a profit. But you cannot do that without significant investments in the right areas. Global MLM software can create the perfect package in terms of internet resources. It can help guide your organisation towards success by easing the burden and, in turn, the probability of failure for all your member executives.

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