Well. This is not a new term anymore but I know a lot of people are still a bit confused and not quite sure how it works. Essentially this is a way to solve the problem people face when doing direct response marketing for their MLM business.
The way most MLM compensation plans are structured is that most of the commissions are paid out as residual income, which means there is little or no upfront commission. This makes direct response marketing difficult for 2 reasons:
1. It is difficult to measure return on investment or ROI.
2. You need to have enough money to invest in it otherwise you will have cashflow problem.
Funded proposal is a concept where you try to make money from the leads you generated by promoting some sort of affiliate products to them. These products have to be relevant to the market you are working on. For example, if you are marketing to existing network marketers and most of your prospects are existing network marketers, then you are going to market products which are useful for their businesses, examples are marketing tools, ebooks, business card services etc. By doing this, you actually make money from these people before they even look at your business.
Will this put them off from looking at my business? The answer is no. 90% of these leads will not join your business anyway, regardless if you sell them anything or not. This can be due to various reasons like wrong timing, lack of fund, want to stay focus on current business etc. By promoting useful products to them, you might actually increase the chance of them looking at your business especially if the products you recommend to them are actually of good value. This will build a relationship between you and your prospects and they will look at your business when the timing is right.
So how do you go about doing that? Well, it is not hard. All you need to do is start using a capture page and market the capture page. Start building a list and then market to the list. You can set everything up yourself or use a marketing system. I personally use a fantastic system called MLSP and I highly recommend it to everyone.
To Your Success,
Ket-Sang Tai
I wrote on my previous post that Internet marketing is not the holy grail of network marketing. In term of building a MLM organization, combining online and offline strategies is extremely important. However, instead of categorizing your marketing effort as online or offline, it is better to divide it into 4 stages.
1. Prospecting to Warm Marketing
Despite what everyone says, prospecting to warm market is still the fastest way to get started and start sponsoring new distributors. Prospecting to warm market doesn’t mean chasing friends or family. First of all, you don’t have to chase. All you want to do is sharing. Secondly, warm market doesn’t mean friends and family only, it includes your business contacts, previous associates, other network marketers you already met online or offline and so on. This is really the fastest way to get your business to a quick start, especially if you have some business or MLM contacts. This is best done when the excitement and emotion is still at its highest level. Share with enthusiasm and people will feel it. Use simple tools like DVD, audio CD or business presentation website.
2. Direct Response Marketing
Basically it means marketing your business online or offline directly. Per Pay Click is a good example of online direct response marketing. It works really well if your company has a good compensation plan which allows you to get cash flow quickly. You will be targeting opportunity seekers who are looking for a way to get out of the rat race. Leads you get with direct response marketing are generally very targeted because they responded to your direct marketing. A good example of offline direct response marketing is direct mail.
3. Attraction Marketing
This is where the magic happens. You are taking your marketing to the next level. Instead of marketing your business, you are marketing yourself online and offline. By marketing and branding yourself, you will attract people to you and your business effortlessly. Combining this with a funded proposal system, you can generate leads with zero cost and even make money before your prospects join your business. This takes months to learn and that is why I do not encourage new distributors to do this as their first marketing method. New distributors need to start making money as soon as possible and therefore prospecting and direct marketing should be their marketing of choice initially.
4. Mentoring
Here you come to a stage where your organization is growing on autopilot. This happens when you have enough people and leaders in your organization. What you do now is simply training and mentoring.
It is not a matter of choice. I believe every new MLM distributors should go through these 4 stages in strict order to achieve success in their MLM business.
To Your Success,
Ket-Sang Tai
