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MLM: How To Get Referrals To Make Money For You

By Edited Sep 14, 2015 2 3

Networking marketing programs like MLMs (multi-level-marketing) are more popular than affiliate programs because it appears, at first glance, to be an easier to way to make money online. You make money by leveraging the efforts of your downline, seemingly reducing the amount of work you have to do to market your product or service.

In plain english that means: You make money by being lazy while all the people below you work to make you rich. No wonder this sounds so attractive to our carnal, greedy minds.

If everybody in the referral tree thought this way, nobody would make money. You'd go broke! And when people don't make money, they're quick to declare a program a scam.

Avon and GDI are examples of MLMs that operate on a traditional referral tree structure, meaning a few people at the top and many, many people on the bottom. The people on the top benefit more than the people on the bottom, not because they're more skilled, but simply because they got into the program early.

In response to that, some MLMs started operating as a forced matrix. A forced matrix is designed to make the referral tree more equitable by limiting the number of immediate referrals a person can sign up beneath him. Then any further referrals who join have to spill over onto the level below. This helps build the referral tree.

In other words, if you join a 3 X 8 forced matrix program, you can only have 3 people underneath you. Each of these three referrals can only have 3 people underneath them, so on and so forth.

If a fourth person signs up to your referral link, but you already have 3 people underneath you, then the fourth person will randomly fall beneath any one of your 3 referrals. This continues down the matrix until all eight levels are filled up. You earn money from every single one of them as long as they stay in the program.

The forced matrix MLM appears to be a better set-up because technically, depending on your position in the tree, you can receive random referrals both from above and below you. In general, the people who benefit the most are the ones in the middle of the tree.

People at the bottom don't benefit as much as they think because they're on the widest part of the tree. It could be a while before a referral falls down to them. So the forced matrix structure isn't perfect either.

Both versions are valid. However, in both cases, if nobody bothers to work, the whole tree suffers.

So, in truth, it takes more work to succeed in MLM marketing than in affiliate marketing. Not only do you have to market your product or service, you also have to teach the people in your downline how to maximize their efforts or the whole tree comes to a screeching halt.

So how do you do this?

I'm no MLM expert, but I think the best way to teach your downline is by having them become a part of your list first. Get an autoresponder. Give them daily tutorials about how to market online. The same traffic efforts you apply to affiliate marketing also apply to network marketing. e.g. Facebook, blogging, article marketing, etc.

Keep in mind that some article writing platforms don't allow MLMs because of their close association to pyramid schemes. Therefore you'll find most network marketers on Ning, You Tube, in traffic exchanges like EasyHits4U and text ad exchanges like Leads Leap and Victory Torch traffic.

MLMs tend to be rampant in text ad exchanges because it costs nothing to join and almost nothing to promote them unless you buy more ad impressions.

Here's the bottom line: You are responsible for teaching your referrals to make money online. As their sponsor, you take the lead. Don't assume the people below you have any marketing experience.

I've seen over and over again in MLM forums people complaining about, "My upline sponsor hasn't contacted me yet." They are expecting you to tell them what to do. A recipe for disaster.

This is one of the main reasons why I prefer affiliate marketing.

Additionally, I'm particular about MLMs that promote certain products. I don't feel a person should have to pay a monthly fee for a health drink. It's simply easier to drop by a store and buy one. I don't mind MLMs that promote web hosting, advertising or an autoresponder. Those are services you need year round. But a drink? Come on.

Anyways, this article wasn't meant to knock MLMs. I'm simply pointing out there's more work involved than you might think, and if you really want to make money from it, you can't just sit back on your laurels. In fact, you've got the lions share of the work.



May 18, 2011 11:41am
Thank you for providing an informative article, this was the first time I had heard of a matrix in MLM
Nov 27, 2011 3:56pm
this is a terrific breakdown of how MLM works with details. thanks for sharing.
Jul 22, 2013 7:30am
Pretty cool I did not know how it worked!
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