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Best Practices

Value Chain

Are we locked into one way of doing our Network Marketing Business? Network Marketing is a business and you are a business owner.

Our business strategy is an important part of Network Marketing so why not take a look at our company (within a company) from a strategy point of view? In the final outcome, strategy boils down to our “unique” business proposition. How well do we select the “activities” we chose to add value to our business? Business activities can become extremely complex so let us take a look at some very simplistic value chains. For Example, let me explain Mary Kay Cosmetics with the following simplistic value chain:

As you can see, Mary Kay sells products using a Direct Sales business model by selling their products through distributors. They provide quality products, business opportunity, and a culture. Many people participating in a direct sales company understands fully when I include “culture” as a valuable link in the chain. Question: What do you think would happen to sales if the Mary Kay culture was eliminated from the value chain? Do you really think all those distributors earn more than a hobby income? Some are serious business builders but the majority are there for the products and the culture. What attracts people to your business?

Next, we look a typical Network Marketing company value chain:

We could have simply stated culture instead of religion and politics. Of course, companies often have aspects of religion and politics in their culture as an attraction. Some of your recruits may be very interested and attracted by these activities even though the company may define them as “optional.” Even though you may not agree with the religion or politics of your company they can be used to attract people. If it offends your prospects then leave it out of your own value chain. Next, we look at an individual value chain:

You may have joined a company and say, “Where are you getting your leads?” I’m part of the company leads program and get zero leads from the company? Certain activities may be a “perfect” fit for the company and products. For example, being a personal trainer may automatically lead to the business and products.

Lead generation is not a strategy but comes from your strategy.

When it comes to business strategy we hear a lot of hype and experience fallacies related to building our personal business and we conclude that the business doesn’t work. At least, it doesn’t appear to be working for us. For example, the comment is often made in business: “Don’t reinvent the wheel.” And so, you look around and the people winning bonuses, trips, etc. are trainers or coaches. These activities are part of their Network Marketing business. They haven’t reinvented the wheel they have just added value to their business. Don’t decide to become a trainer or coach in order to find success (unless, of course, you want to be one). Always plug into the company’s success system and then ask: What activities can you add to your business value chain?

As you can see, there are “fits” in the value chain and there are “unfits.” We may come to a “fork in the road” and not realize that we have to make a choice. Making good choices is a perfect reason to define your business strategy. Would you add the activity of Guru to your value chain? If you are trying to attract followers instead of leaders that might be a good activity to add.

We don’t need to be the best but we do need to be unique. If you started a hamburger joint would you compete head-to-head with McDonald’s? Good luck if that’s your strategy. Often, determining to be number one or number two in the industry is a competition nightmare. Is your goal growth or profits? Is your goal a race to the bottom when it comes to returns on your efforts and investments? Be like everyone else in the Network Marketing business and you will be a “hobby business.” Don’t reinvent the wheel just add value to your business proposition.

“Network Marketing is the practice field of life and is not something you do but something you are.”

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