“Funded Proposals” - and why network marketers should keep away from them

Money-1 A funded proposal, in our context, is (designed as) a way of generating your own leads for your network marketing business without spending money, overall, on doing so. The idea is that you build a list by selling something really low-priced which is of value to its purchasers, and by doing so you build a list of potential “leads” for your main business, the one you actually want to promote. So you offer an e-book, typically, about something relevant and interesting, and you make it look really attractive and good value so that it more or less “sells itself” (allegedly), and this way you end up with a list, and as all the internet marketing people will tell you, “the money is in the list”. But the $3 or whatever you charge for the e-book pays for all your marketing, thus netting you the list “without paying for it”. That's the basic idea, anyway.

This is all well and good (perhaps) if you’re an internet marketer, but if you’re trying to build a network marketing business, it's really a hugely flawed idea and in my opinion something to run a mile away from rather than considering at all.

These are among the reasons why I would never dream of touching one, myself:-

(i) It's a huge distraction from your “real business”

(ii) It means that you're effectively running two businesses instead of one (this is an under-appreciated and actually monumental problem about which I‘ll say a lot more in later posts, so perhaps enough said, for the moment)

(iii) It doesn't duplicate well at all (the people promoting funded proposals claim that it can do, and they're wrong)

(iv) It's basically a “bait and switch” approach. What you're really doing is “baiting” people with one thing (the little e-book or whatever) and then trying eventually to “switch” a proportion of the resulting “leads” over to your main business (which wasn‘t what they were looking for, and that's why they're not really leads, of course). So the reality is that you’re trying to persuade. This in itself is a dreadfully bad idea for a whole number of other reasons. Among them, the key point is perhaps that when you're promoting a business opportunity you should be promoting it only to people who are looking for a business opportunity of that kind (of whom there are an enormous number, especially at the moment), because anything else is really making life difficult for yourself

(v) So, the underlying idea of using a funded proposal is that you're trying to persuade people to look at your business opportunity because it's you who's asking. In other words, you gradually “establish credibility” with them by “building a relationship with them”. That's usually a euphemism for bombarding them with autoresponder email spam until a few of them eventually succumb and are willing to look at your main business just because they feel they “know and trust you”, and as we know, “people do business with people they know and trust”. There is actually something in this last point, but not as I‘ve quoted it here at all, and it‘s a hugely misunderstood and widely misused idea when - as here - it’s used to try to explain away something that was never actually true in the first place. The real point is that only people who have already decided they wanted to do business, do business that lasts: people who join you because you persuaded them are very unlikely, collectively, to be a success. Stable, successful, growing and duplicating downlines are ones in which the majority of distributors understand this point and pass it on

(vi) It's all rather deceptive, and in the early stages (which can last for a year or so) people can actually imagine that it's “really working” because they do get some “leads” this way, and more to the point, they actually manage to sponsor some of them into their main business. This is the point that proponents of funded proposals always make: they weren't sponsoring without using one, and now they're using one and they're “suddenly sponsoring people”. All well and good, you might think? Ah, but no - sadly, this is also wrong. What they usually haven't worked out yet, when they say that, is that most of the people they're sponsoring, who were not really looking for that business opportunity until someone persuaded them, will eventually drop out - it can take two years to learn this!

(vii) So the reality is that all the people who started a year ago, whose sponsor started a year before that, are actually unknowingly copying failure, and they really don't know what they're talking about. You can even see this for yourself if you look around the forum archives of all the online forums where network marketing people discuss and promote their businesses. There are loads of threads with titles like “Funded Proposals Really Work” (a real triumph of hope over experience, this title!). These forum posters, all of whom have either a financial or an emotional investment in getting across their point of view, are not still there 3 years later: they have copied failure and dropped out of the business. They are not among the successful few who have actually worked on one business successfully and consistently and built it up into a highly profitable and ever-expanding source of making a great living.

They all started off thinking they would be, of course, because they had “expert coaching” from a “top mentor”, but strangely enough, the one thing they almost all have in common a couple of years later is that it didn’t work out for them, and they ended up becoming statistics. Of course, understandably enough, you can't tell them this at the time, because they're simply doing what their sponsor (who knew no better) advised them to do. And you can’t tell them later either, because they’re not usually there.

The problem is that the learning-curve with funded proposals is long and most of the self-styled “experts” doing the teaching are not yet even half-way along it.

Funded proposals are, in short, one of the reasons why the overall failure-rate is so high in network marketing: they fool people into believing that they're working for long enough for people to duplicate and promote them. In the long run they achieve almost nothing.

Unfortunately, however, they're really masterfully promoted online by internet marketers who make a fortune out of network marketers and build their own lists in this way. As we all know, it's easier to make some fast money selling a perceived service to network marketers by being an “expert” or a “consultant” or a “guru” or a “mentor” or a “coach” (all people to keep well away from, if that's how they have to describe themselves to do any business!) than it is to make your fortune in network marketing, and some of these people are really good self-promoters, too. So the appearance of the whole thing is terribly deceptive.

As in any other sort of endeavour, people have an enormous emotional investment in “not having screwed up with what they're doing”. So I was really surprised when I posted sentiments very similar to the above in two different internet forums recently and actually found a large succession of people agreeing with me and almost nobody dissenting at all. Perhaps a bit cynically, I’d been expecting a succession of posts saying “No, Yuliya, you've got it all wrong: I built my whole business with a funded proposal” (offered, of course, by people conveniently not mentioning that they've been doing it for two years already and they're only earning $500 or $800 per month, i.e. not even making a living yet). Well, I didn’t really expect that at The Network Marketing Forum, because a high proportion of our members there are among the more successful representatives of network marketing, who obviously know better, but I expected it elsewhere, and I was wrong.

If you ask only people who are truly successful in network marketing (if indeed you can identify them to start with) you'll get a very different impression of this whole subject from the one you’d form just from seeing the “Funded Proposals Really Work” forum posts (usually of recent members).

Not that I have strong feelings about this subject, of course. Just strong enough for me not knowingly to be willing to sponsor into my own business anyone who's planning to use a funded proposal to build their (and therefore my) business, because it's just not worth my while in the long run, and is far more likely to lead to time-consuming problems than to future income.


Building your business with drop-cards

Drop-card-specimen I've built a lot of my business over the last 6 years using leads generated with drop-cards (some people call them “sizzle cards“), and so have many of my downline. It’s a simple, duplicable idea, and the results from this method are actually improving over time. I think that’s because so many people are trying to generate leads online, often none-too-successfully, so there’s less competition now for those of us generating real leads in the real world in preference to online opportunity-seekers who have often replied to 100 different things.

I can offer a few little observations/suggestions but they may not be fully relevant to your situation because (i) I am in Europe (well, nearly - and my business is, and the drop-cards are) and (ii) we actually use them with a phone-number (7-minute recorded message line, and not on a free-to-call 800 number) rather than with a website as some people do.

1. Think big. To get anything quantifiable back from drop-cards, you need to be monitoring them by the thousand, not by the hundred.

2. Think eye-catching. As much colour as possible and as few words as possible, to get people's attention.

3. Think up-market. For a business opportunity, try to avoid "poverty-consciousness" and seek out "aspirational thinkers". Expensive areas are better than cheap areas where you think people "need" your opportunity. Brand new BMW's (which are often not yet fully paid for) are better than old Ford Fiestas. I don't think putting them on cars is a great way to do this, actually: I'm just trying to illustrate a point.

4. Think classy and professional. No flambuoyant typefaces and fonts. Nothing that's difficult to read. No attempted jokey/witty wording (believe me: we’ve tried and it doesn't work).

5. Think interrogatory. We’ve done well with one-liners that ask a question to which the obvious answer is "yes", with affirmative thinking prompting the follow-up.

6. Think Vista (the printer, not the PC operating system: think XP for that!). I get all mine delivered to London from VistaPrint Europe in Holland, 250 in a little box, always printed free, all you pay for is postage and packaging, and you can order absolutely unlimited numbers, using their free offers as many times as you like. Two things about VistaPrint, though: they send a lot of email (about one every day, almost always with some free offers), and you need to keep a careful eye on their check-out pages and verify the amount carefully before paying the shipping costs. Some people have complained about “unauthorised credit-card charges” from VistaPrint, but these are people who haven’t paid attention to the check-out process and have bought something they didn’t intend to buy (usually address labels); a minor inconvenience to have to be so careful, but you get used to it pretty quickly, and actually it’s worth it to deal with Vista because the quality and reliability of their printing is so impressive.

7. Think “polybag”: you can buy little see-through bags with a peel-off sticky back to leave “drop-card dispensers” around so people can take one. It’s potentially a good way to multiply your drop-card distribution and start to qualify the recipients (they’ll take one only if they’re interested), but be careful with them when sticking them on others’ property: if they stay there for long enough they can damage the paint when they’re taken off!

An introduction of sorts

My dear friend Robin van der Merwe (blog; website) has encouraged me to start a blog. (Maybe partly because my posts will offend fewer people here than in a forum, or at least because those people will be less well-placed to argue here, though Robin was of course far too tactful to suggest this reason). So, here we are: my first ever post in my first ever blog.

My plan is to chat about Network Marketing (and maybe some other stuff), which is how I’ve been making my living since leaving high school - and a surprisingly good living it’s turned out to be, too. I’m not using this blog for my business at all, though: I don’t do business on the internet. So you won’t find any more than incidental, anecdotal references to my company or its products. At the moment, it’s not my intention to include any affiliate links here, either (actually I have none to include), so if you see me recommending and/or linking to anything, it’s because I think it’s relevant and useful, not because I’m earning anything from it. Nor, as you can see from the absence of a “contact me” form, am I trying to build a list.

Comments are in principle very welcome, though they’re held for approval and moderated.

For anyone wishing to contact me directly, my email address is given in my profile (and shown as a clickable button in all my posts) at The Network Marketing Forum.

Free report