Multi Level Marketing and Network Marketing explained - vital information for the potential new MLM recruit.
See also: Professor Al Bartlett on understanding the exponential function.
GEOMETRIC PROGRESSIONS, MLM RECRUITING AND THE FAILURE FACTOR
Definition: A geometric progression is a sequence, such as the numbers 1, 3, 9, 27, 81, in which each figure is multiplied by the same factor (in this case 3), in order to obtain the following figure. In MLM, the end result of your geometric progression is the SUM of all the figures from all levels (in this case, 121 people to your 4th level).
If you choose a factor of 6, e.g., if you want to find 6 recruits and you want everyone else in your downline to find 6 recruits each, the resulting geometric progression should look like this:
Oops!! The 7th Line can't exist - there aren't enough people in the world to fill it !!
Whatever failure factor one might experience in real life, it will certainly be more than 1:1. It might vary between 4 and 10 for various MLM's, depending to a great extent on the individual ability and persuasiveness of given distributors in that MLM. Of course, time is also an important factor. It is virtually impossible for members of any level to progress uniformly to the next level at the same moment in time.
Pro-MLM-er's will point to the absurdity of the above figures and say, "Ludicrous! Plain stupid! Can't happen!" And they are right. No-one has ever achieved the desired result, because it IS impossible. Yet geometric progressions in the image of the above example are a common basis for MLM recruiting programs. More importantly, the geometric progression recruiting model is the basis for all MLM promises of great wealth.
Of course, the huge problem for a new distributor is that he or she will never know exactly where they are positioned in the progression, or how large the progression has been in the past, is at the moment, or will be in the future.
You see, an MLM progression is NOT just a static set of figures as represented above. Over time, it is a dynamically evolving and continually mutating morass of people. The structure of most downlines does not look anything like the neat examples above. In a downline of say, 50,000 people, the gaps left by perhaps up to 500,000 people who have come and gone over the years, corrupts the structure completely. But the people at the top still get paid for the purchases and the recruiting efforts of all of those who remain signed up and active beneath them.
In the real world, company growth can only occur when market demand for product rises. In the MLM world, growth is achieved by inducing people to purchase "qualifying" product sales in order to allow them the right to get paid for recruiting others. After initial growth, the ACTUAL number of distributors remains relatively static while new people are sucked in and spat out in an almost continuous and equal stream. Market saturation denies any success to the great majority of these new people. Growth in MLM is based on distributor "churning". For supporting data have a glance at the world wide figures.
It should be clearly understood that instead of being a logical, unlimited growth entity, an MLM recruiting geometric progression is self-limiting in its population growth by design. Yes, it is possible to have a 50,000 person downline, but the cost to the hundreds of thousands of individual "failures" who contributed to its creation over time is an astronomical figure. If it were possible for everyone to have a 50,000 person downline, MLM would perhaps be fairer. It is not possible.
Oops! The population of the world is only just over 7,100,000,000!!
THE FAILURE FACTOR IS A PRIMARY KEY
What is vitally important to know here, is that to recruit ONE successful business builder, on average you might have to recruit between six and seven people. To adjust for this, you should substitute a factor of 42 (7x6), instead of the factor of 6 used in the example above. Then you'll have an idea of the number of people that must be recruited for each true business builder to find his six business builders at any level. The progression will now look like this: