Jim Rohn said once during the seminar that only a small part of the audience implements what he teaches. He estimated that 10% of people who attended his seminars actually read the books he recommended. He also provided other examples: only 3% of people have a library card; only 5% of people in America are financially independent on retirement.
Jeff Olson in The Slight Edge states that only about 5% of people are successful in life.
Both gentlemen used their experience to estimate this success rate and it was more the rule of thumb than any definite number.
The 21st century with its extensive computing power and a new demand for transparency connected with the Internet era allows us to take guesswork out of such estimations. Various companies are publishing their results to be viewed by everyone. I researched several Multi-Level Marketing companies’ data plus any other I could lay my hands on in the quest to get the universal success rate.
Why MLM companies?
Well the concept of MLM is that anybody can have success with it. Distributors are looking for business partners among their acquaintance and friends; among average people, not some business geniuses. So it is as universal branch as you can get. What is more, MLM depends heavily on personal development. Not everyone is capable of giving presentations, being a salesman and building a business network, but anyone can become one if he takes some effort to learn those skills.
Besides, MLM industry is unique in its transparency. It’s hard to find any meaningful data about individuals’ results in any other industry. MLM companies are vitally interested in the success of their distributors, because it translates into their success. They try to advertise their way of doing business, emphasizing their members’ personal successes, thus they publish aggregated and averaged data about their distributors’ results.
A pinch of salt
You need to use your best judgment while analyzing MLM’s data. Rohn and Olson weren’t wrong with their rule of thumb. Success is not common. Companies publishing their members’ incomes try as hard as they can to embellish reality. There is no standard methodology in the reports of various companies. Some of them use weekly data, some monthly, some annual. Luckily most of them also give an annualized average income no matter which methodology they employed.
They use different nomenclature; I chose to call partners of MLM companies “Distributors”.
They also disqualified as many distributors as they can from their statistics, providing their own definition of an Active Distributor. Usually it’s someone who does the business: has some sales, has some distribution network etc.
I tried to standardize those different “standards” to obtain meaningful and comparable metrics.
Success metric
It’s not some contest between MLMs. I don’t try to determine which of them is best. Doing this research I was focused only on finding the universal success rate, not only in developing MLM business, but in life.
I add to the mix as many data from outside the industry as possible. It’s just uncommon for any other ventures to publish such information, thus they are sparse in the research.
There is a lot of guessing involved in forming my conclusion, but it’s guessing based on numbers, not just on gut feelings.
% of reasonable success is a rule of thumb metric providing the percentage of the population who made a few hundred bucks a month. All in all, MLM is usually a part-time business, so part-time results are not something to be frowned upon.
% of significant success is the percentage of the population who reached the level of full-time income (or at least close to it)
Company: Amway
Year: 2010
% of significant success (over $55k annual income): 0,45%
Comment: Amway abstained from publishing the whole ladder of incomes several years ago. The latest data I could find were from 2010 and they detailed only top earners.
Company: MonaVie
Year: 2011
% of reasonable success (over $4k annual income): 10%
% of significant success (over $53k annual income): less than 1%
Company: Nu Skin Enterprises
Year: 2012
% of reasonable success (over $4.8k annual income): less than 6%
% of significant success (over $62.9k annual income): less than 0.37%
Comment: Active Distributors are about 40% of all distributors. Their methodology was confusing; I couldn’t comprehend how the percentage of Active Distributors adds to 100% or at least 40% of all Distributors.
Company: Herbalife
Year: 2012
% of reasonable success (over $5k annual income): 8,2%
% of significant success (over $50k annual income): 2.55%
Comment: Another confusing methodology. They divided their members into “pursuing a business opportunity” (27%), “single level” Distributors (71% of these 27%) and Active Distributors. The above numbers apply only to the Active members.
Company: Orango Gold
Year: 2012
% of reasonable success (over $4k annual income): about 20%
% of significant success (over $30k annual income): 1.4%
Comment: Comment: The above numbers apply only to the Distributors who reached a leadership rank (17% of all Active Distributors).
Company: Vemma
Year: 2013
% of reasonable success (over $3.6k annual income): about 13%
% of significant success (over $42.8k annual income): 1.46%
Comment: Numbers apply to Active Distributors (which were 30% of the whole population).
Company: Young Living
Year: 2013
% of reasonable success (over $3.1k annual income): about 17%
% of significant success (over $78k annual income): 1.4%
Comment: Numbers apply only to top 8% of Distributors, ranked as Stars and above.
Company: Empower Network
Year: 2013+
% of reasonable success (over $4.1k annual income): about 5%
% of significant success (over $42.9k annual income): less than 4%
Comment: Empower Network is not the standard MLM, it works exclusively online. The numbers apply to all Distributors.
Infoproduct
I also found the results of The Keyword Academy—an online program for people who want to make money online via niche sites and SEO skills. The premise of TKA is that anyone can start it; there is no skill set or capital required upfront—similar to MLM.
It’s interesting to analyze their data, because it’s a whole different realm. In MLM you need social skills. Even if your business is done through impersonal means, blogs, shopping carts, etc., once you recruit some partners it becomes “people’s business”. The TKA’s students work mostly alone, use sophisticated technical means and a completely different set of skills among which analytical thinking is the most important.
Company: The Keyword Academy
Year: 2011?
% of reasonable success (over $3.6k annual income): about 9%
% of significant success (over $60k annual income): 0.84%
Comment: The detailed rules of tracking the students’ results are not explained. I only know that 837 of them provided their numbers. I have no idea how many of them took part in the Academy and what the exact percentage of those who provided their results was. The numbers above apply to those who did it.
Universal success rate
Success is less common than we are inclined to think.
In both MLM and TKA cases it heavily depends on individual effort and grit, in other words, on personal development.
The word “personal” indicates it depends on a specific person.
And only from 0.37% to less than 4% people are successful. That’s why, even in such a technical challenge like driving SEO traffic to sites, less than 1% succeeds.
Conclusion
Let’s make this ratio higher. This is my dream. Jim Rohn said that the numbers throughout the years are the same, only the faces change. But I want to change the numbers.
It may be impossible to change them overall. Maybe they are coded into the fabric of human society. Maybe just 0.5% can be on the top of things no matter what. Who knows?
But I’m against this point of view. Every kid has a creative genius potential. It’s later in life that we lose it. Every one of us has the potential to expand beyond our wildest dreams. It is just hidden very deep inside of us.
It’s not that your fate is already determined, that you are a success or failure because of your past. We all know the sad stories of people who made it big and slipped back to obscurity, we hear about rock stars, sportsmen or actors who achieved a lot only to waste it by alcohol or drug abuse.
We all know rags to riches stories, the media are very fond of them because they speak vividly to our imagination — talent shows, multi-million businesses started in garages, a newbie beating the master in a prestigious tournament.
But neither great failures nor rapid successes are common. In his book The Millionaire Next Door
Gradual growth or decline is common and normal. They are caused by consistently practiced disciplines or small errors in judgment repeated over time.
Personal philosophy
The power behind all the successes and failures is an individual’s personal philosophy, an operating system for his life. It consists of all his experiences gathered from the various sources through sensory and mental inputs plus his self-talk. Two people can see exactly the same thing, but their interpretation of what they see may be totally different. The internal dialog matters.
In order to increase the ” universal success rate”, the overall awareness of the importance of personal philosophy must be increased.
You can do it
Incremental development of your personal philosophy is possible. It happened to me. It happened to Jim Rohn and many others. In fact, any transformation story is likely to be a result of adjusting one’s personal philosophy. Whether it’s a businessman who went from a struggling to a thriving business or an alcoholic who dealt with his drinking problem, the results they got were the effect of changing the way they thought.
You don’t have to wait for an enlightenment or breakthrough. You can start where you are with what you have. Change the media you consume, the people you interact with, pay attention to your internal dialog and in the end you will increase the success rate by becoming a success yourself.
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“Jim Rohn said once during the seminar that only a small part of the audience implements what he teaches. ”
–Interesting coincidence to read this here. Because just yesterday I watched the (famous) youtube vid with Tony Robbin, Frank Kern, and John Reese where they talk about “why some take action and others don’t.”
It’s the same topic basically.
The end point is a self-reinforcing 4-step framework:
Potential —> Action —> Result —-> Belief —-> (potential again)
And it becomes a feedback loop.
You’re either in it and going up, or not, and going down.
Very similar reasoning to my “momentum machine” article.
What can I say? “Great minds think alike” 😉
I think the clue of my thesis is action. Everyone has potential. We just don’t realize how tiny action can push us in the right direction. Once pushed we can start the positive feedback loop.
Hi Michal,
“Jim Rohn said once during the seminar that only a small part of the audience implements what he teaches. ”
I’m so not surprised at this. the problem is people are lazy, unrealistic and want miracles these days.
They attend a Jim Rohn seminar with the mindset “I’m attending an seminar of a successful man, who will show me how to do the same”. But when they get there and they realise they have to listen, take notes, purchase books are read more…. they simply get bored.
If this success stuff was easy, everyone would have it. Seminars are an aid, not the solution. But on a positive note… If you don’t take action at least you know it’s something you don’t really want.
Naomi
That’s surprisingly cynical coming from you Naomi.
I put your positive note in my quotes depository 😉