MLM SURVEY RESULTS And What They Mean
| Category: Archive catalogue | Date: 2003-10-09 |
Over the last nine years my company MarketWave, Inc. has conducted surveys, by various means, of active MLM distributors. These methods included personal interview, questionnaires at seminars, single question polls (like those that appear on my newsletter renewal forms), and full page surveys included in the MarketWave Newsletter. Answers to bits and pieces of this survey are also compiled from literally thousands of phone conversations Ive had over the years. Other survey results, if credible, are also merged into our data as well. The more data, the less the margin for error. Here are some of the more startling results:
Average age of distributor: 37.4
And rising! Professionals, white collar workers, vulnerable middle managers, and retired folks are discovering MLM. To place this in proper perspective, the average American is 35.5.
Sex: Male-56%, Female-36%, Business/Trust-5%, Couples-3%
And the number of men are rising, perhaps due to the fact that more of them fall into the categories listed in the section above, the female oriented home party type MLMs are all but gone, and many husband and wife teams are registered only under the mans name (however politically incorrect this may be). In fact, Id guess that if you were to drop the number of men by 10% and increase "couples" by the same amount, you might get an even more accurate picture.
Its interesting to note that the ratio of MarketWave subscribers is 84% men to 12% women, although its unclear as to why.
Primary reason for joining an MLM program:
Men Woman All
More money 59% 29% 49%
More free time 10% 36% 19%
Material Goods 21% 15% 18%
Purchase products 6% 12% 8%
Other 4% 8% 6%
This question asked for a basic, fill in the blank response. "More money" responses included those which involved any financial gain, such as "funds to invest," or "retirement account." "More free time" responses included such goals as "waking up later," "spending more time with family," or "work at home/no more commuting." "Other" usually involved personal goals such as "Security," "Self esteem," or "meet more people."
Men seemed to answer more from the gut, with the first thing that popped in their heads. Women seemed to see money more as a means to an end. They tended to answer more from the heart, with what they wished to achieve with the money they earned.
By the way, the majority of those (both men and women) that answered with just "more money," who were asked why they wished to have more money usually said something to the effect of "to have more free time." This seems to be the real goal most MLM distributors are after -- not money!
Years in MLM: 3.1
Admittedly, we may be responsible for some unintentional data torturing here. Well, more like data irritating actually. Those that would respond to a written survey, which is where most of the data for this question came from, are likely to be a more serious, thus committed group overall. I suspect this number might actually be slightly lower. Also, it should be noted that this is an average, not a mean. In other words, there were a few whod been in for ten or twenty years, and the vast majority had been in for less than three.
MLM participation by state:
Top Ten Bottom Ten
Nevada 4.69% Iowa 0.03%
Hawaii 4.13 W. Virginia 0.08
Florida 4.10 Georgia 1.00
Utah 3.93 Indiana 1.01
Arizona 3.70 Mississippi 1.04
Colorado 3.82 S. Dakota 1.08
Pennsylvania 3.36 Delaware 1.15
Oregon 3.11 N. Dakota 1.20
Washington 3.10 Kentucky 1.37
Michigan 3.03 Tennessee 1.38
Massachusetts 2.90 Vermont 1.43
Here, we did more than just define what states had the most MLM distributors. Obviously, the larger states like California and Texas would come out on top. Instead, we determined what percentage of all MLM distributors were in each state (based on my database of over 18,000 distributors), then figured what the total number of distributors there were in that state, and finally, what percentage of that states population were MLM distributors. This gives us a better idea of which states are hot and cold MLM states. The obvious conclusion: Go west!
By the way, California came in 14th with 2.69%, and Texas was 11th at 2.86%. New York was 37th with 2.29%.
Total distributors recruited in MLM career: 2.1
Here is one of the biggest statistical fallacies in this industry. Ive heard other figures ranging from 2.6 to as high as 3. Unfortunately, we fall victim to the same bias as all others who have tried to determine this number. First of all, we are only surveying current, active distributors. Obviously, if everyone who ever participated in MLM over the last 53 years recruited just two, we would have, in fact, reached world wide saturation. Also, considering the number of people who participate in two or more programs at once (or whove been in dozens over the years), many of those 2.6 or 2.7 (the most common mythical numbers quoted my MLMers) are undoubtedly the same people getting counted more than once. Furthermore, determining an "average" creates the illusion that most or all distributors are recruiting around two or three people. In fact, well over half of all MLM distributors never recruit a sole, and drop out within weeks. Many recruit just one. In fact, very few recruit exactly two people. What causes this average to reach above the 2.0 level are those very few who recruit 4, 5, 10, 20 or perhaps over 100 people.
In fact, it is technically impossible for the recruitment "average" of all distributors who have ever pursued network marketing to be greater than one. Lets say you are the very first MLM distributor. You recruit two people. There are now three distributors and two recruits. Thats an average of .67. Now the two you recruit also recruit two. There are now seven MLM distributors, all have recruited two people for a total of six recruits, but the "average" is only .86. Even if every new recruit were to continue to recruit two others, this average would only proceed to get closer and closer to, but never reaching, one-point-zero.
Average number of MLM programs pursued in career: 3.6
You might be surprised at this low number. We certainly were. However, we found that there were many distributors who were still with their first or second company, and only a few who had been with several. Those few just seemed to stand out more since they tended to be either well known veterans of MLM, or junkies who had been in dozens of programs. Actually, we found that most new distributors just didnt hang around the industry long enough to involve themselves with more than one or two companies.
Number of MLM programs pursued at the same time:
One 53%
Two 28%
Three 11%
Four 5%
Five or more 3%
Record for most opportunities pursued in career: 36
Record for most opportunities pursued at the same time: 18
Both of these folks are still looking for the "right" MLM opportunity.
Percent of each type of compensation plan:
Break-Away 49%
Unilevel 28%
Binary 11%
Matrix 9%
Hybrid 2%
Australian (2-Up) >1%
Despite the doomsday predictions of some break-away bashers, the ol stair-step has only dropped 17% over the last nine years, and thats primarily due to the massive influx of new companies who have adopted non-break-away plans, rather than any significant reduction in companies employing break-away plans. To wit: 84% of all companies over nine years old are break-aways. Matrix plans have also dropped likely due to the increase in popularity of the binary plan, which is actually a form of matrix (they hate it when I say that). Besides the binary, only the unilevel seems to be gaining a slow but steady increase in popularity. Fortunately, Australian plans have never exceeded 1% since Ive been keeping track.
On a scale of 1-5 (5 being the highest, 3 meaning indifferent, 1 you hate it), here are how various types of compensation plans were rated:
Unilevel 3.44
Hybrid 3.36*
Matrix 3.05
Break-Away 2.98
Binary 2.79
Australian (2-Up) 1.88
* Hybrid was included in only about 33% of total surveyed.
This question was especially interesting considering almost half of all comp plans currently being used today are break-aways, and well over three-fourths of all MLM distributors are working a break-away program. This means that a sizable number of distributors involved in a break-away program would have had to rate their own plan type as being less than a 3!
Binaries ratings were also very curious. It seems MLMers either love em or they hate em. Most ratings were either ones or fives, with very few threes.
On a scale of 1-5 (again 5 being the highest, 3 meaning indifferent, 1 you hate it), here are how various types of product lines were rated:
Health Care 4.44
Weight Loss 3.89
Skin Care 3.83
Hair care 3.49
Cookies/Snacks 3.31
Dental/Medical 3.24
Educational 3.17
Cosmetics 3.14
Legal Services 3.05*
Pet Care 2.99
Travel 2.90*
Gold/Jewelry 2.88
Publications 2.74
Benefits Packages 2.74
Water/Air Purifiers 2.67
Automotive 2.66*
MLM Portfolios 2.63
Internet Services 2.55*
Tax/Record Keeping 2.44
Telecommunications 2.28
Lead Generation 2.22
Toys/Games 1.85
Cigarettes 1.57*
Downline Builders 1.54
Chain Letters 1.00
* Recent additions to survey -- figures based on less than 100 responses.
Notice that Chain Letters never received even one rating of higher than a 1. Im impressed, but a little skeptical too. Does this mean no one would ever participate in one, or they have and failed miserably with it?
Of course, the real question here is: do distributors claim to prefer skin/hair/health care lines because thats what the company theyre involved in sells, or are they involved with these companies because they sell the products they prefer?
What seems to be obvious is that Discovery Toys distributors need to participate in more MLM surveys.
Number of total MLM distributors (U.S. only): 7,134,500
A far cry from the 10-15 million we keep hearing about. I computed this figure by adding up all the distributor totals for each of the 458 companies in my database (about half are estimates, but theyre close estimates). These are the 458 most prominent companies and do not include any who are under six months old. So, I then assumed, very optimistically, that there were 300 more companies with an average of 1,000 distributors each. I have also included quasi-MLM operations such as Avon and Tupperware to the mix. I did everything I could, within reason, to justify the "15 million distributor" claim - and couldnt even come close to 10-15 million.
What is even more revealing is that the top 2.5% of all MLM companies (by size) comprised 66% of all the distributors! They averaged 465,500 distributors each, whereas the other 97.5% of companies averaged only 5,910.
And the most scathing evidence against the "15 million" claim is the fact that 49% of all network marketers are currently enrolled in more than one MLM program, so we are actually counting about 2.3 million of these folks more than once!
In other words...
Actual number of current MLM distributors: 4,834,500
Where are MLM companies based -- top ten states:
California 76
Texas 44
Florida 38
Utah 28
Nevada 25
Arizona 22
Illinois 16
New York 12
Ohio 11
Washington 10
Top five reasons given for leaving an MLM opportunity:
1. Didnt make any money.
2. Found a better opportunity.
3. Company went out of business.
4. No upline support.
5. Didnt like the products.
Number of MLM companies whos name ends with "way": 9
Number of MLM companies with "Life" in their name: 38
Can you name them?
Number of MLM companies whos name starts with each letter of the alphabet:
A 66
B 38
C 64... Okay, Im getting ridiculous.
Obviously, Ive hit the bottom of the barrel as far as MLM related statistics.
Copyright 1991, 1996, 1999 © MarketWave, Inc.
Text by Leonard W. Clements © 1999
About the Author
Mr. Clements has been involved in the MLM industry for sixteen years and is a successful distributor for a prominent MLM program
lenc@network-marketing.com
http://www.network-marketing.com
Average age of distributor: 37.4
And rising! Professionals, white collar workers, vulnerable middle managers, and retired folks are discovering MLM. To place this in proper perspective, the average American is 35.5.
Sex: Male-56%, Female-36%, Business/Trust-5%, Couples-3%
And the number of men are rising, perhaps due to the fact that more of them fall into the categories listed in the section above, the female oriented home party type MLMs are all but gone, and many husband and wife teams are registered only under the mans name (however politically incorrect this may be). In fact, Id guess that if you were to drop the number of men by 10% and increase "couples" by the same amount, you might get an even more accurate picture.
Its interesting to note that the ratio of MarketWave subscribers is 84% men to 12% women, although its unclear as to why.
Primary reason for joining an MLM program:
Men Woman All
More money 59% 29% 49%
More free time 10% 36% 19%
Material Goods 21% 15% 18%
Purchase products 6% 12% 8%
Other 4% 8% 6%
This question asked for a basic, fill in the blank response. "More money" responses included those which involved any financial gain, such as "funds to invest," or "retirement account." "More free time" responses included such goals as "waking up later," "spending more time with family," or "work at home/no more commuting." "Other" usually involved personal goals such as "Security," "Self esteem," or "meet more people."
Men seemed to answer more from the gut, with the first thing that popped in their heads. Women seemed to see money more as a means to an end. They tended to answer more from the heart, with what they wished to achieve with the money they earned.
By the way, the majority of those (both men and women) that answered with just "more money," who were asked why they wished to have more money usually said something to the effect of "to have more free time." This seems to be the real goal most MLM distributors are after -- not money!
Years in MLM: 3.1
Admittedly, we may be responsible for some unintentional data torturing here. Well, more like data irritating actually. Those that would respond to a written survey, which is where most of the data for this question came from, are likely to be a more serious, thus committed group overall. I suspect this number might actually be slightly lower. Also, it should be noted that this is an average, not a mean. In other words, there were a few whod been in for ten or twenty years, and the vast majority had been in for less than three.
MLM participation by state:
Top Ten Bottom Ten
Nevada 4.69% Iowa 0.03%
Hawaii 4.13 W. Virginia 0.08
Florida 4.10 Georgia 1.00
Utah 3.93 Indiana 1.01
Arizona 3.70 Mississippi 1.04
Colorado 3.82 S. Dakota 1.08
Pennsylvania 3.36 Delaware 1.15
Oregon 3.11 N. Dakota 1.20
Washington 3.10 Kentucky 1.37
Michigan 3.03 Tennessee 1.38
Massachusetts 2.90 Vermont 1.43
Here, we did more than just define what states had the most MLM distributors. Obviously, the larger states like California and Texas would come out on top. Instead, we determined what percentage of all MLM distributors were in each state (based on my database of over 18,000 distributors), then figured what the total number of distributors there were in that state, and finally, what percentage of that states population were MLM distributors. This gives us a better idea of which states are hot and cold MLM states. The obvious conclusion: Go west!
By the way, California came in 14th with 2.69%, and Texas was 11th at 2.86%. New York was 37th with 2.29%.
Total distributors recruited in MLM career: 2.1
Here is one of the biggest statistical fallacies in this industry. Ive heard other figures ranging from 2.6 to as high as 3. Unfortunately, we fall victim to the same bias as all others who have tried to determine this number. First of all, we are only surveying current, active distributors. Obviously, if everyone who ever participated in MLM over the last 53 years recruited just two, we would have, in fact, reached world wide saturation. Also, considering the number of people who participate in two or more programs at once (or whove been in dozens over the years), many of those 2.6 or 2.7 (the most common mythical numbers quoted my MLMers) are undoubtedly the same people getting counted more than once. Furthermore, determining an "average" creates the illusion that most or all distributors are recruiting around two or three people. In fact, well over half of all MLM distributors never recruit a sole, and drop out within weeks. Many recruit just one. In fact, very few recruit exactly two people. What causes this average to reach above the 2.0 level are those very few who recruit 4, 5, 10, 20 or perhaps over 100 people.
In fact, it is technically impossible for the recruitment "average" of all distributors who have ever pursued network marketing to be greater than one. Lets say you are the very first MLM distributor. You recruit two people. There are now three distributors and two recruits. Thats an average of .67. Now the two you recruit also recruit two. There are now seven MLM distributors, all have recruited two people for a total of six recruits, but the "average" is only .86. Even if every new recruit were to continue to recruit two others, this average would only proceed to get closer and closer to, but never reaching, one-point-zero.
Average number of MLM programs pursued in career: 3.6
You might be surprised at this low number. We certainly were. However, we found that there were many distributors who were still with their first or second company, and only a few who had been with several. Those few just seemed to stand out more since they tended to be either well known veterans of MLM, or junkies who had been in dozens of programs. Actually, we found that most new distributors just didnt hang around the industry long enough to involve themselves with more than one or two companies.
Number of MLM programs pursued at the same time:
One 53%
Two 28%
Three 11%
Four 5%
Five or more 3%
Record for most opportunities pursued in career: 36
Record for most opportunities pursued at the same time: 18
Both of these folks are still looking for the "right" MLM opportunity.
Percent of each type of compensation plan:
Break-Away 49%
Unilevel 28%
Binary 11%
Matrix 9%
Hybrid 2%
Australian (2-Up) >1%
Despite the doomsday predictions of some break-away bashers, the ol stair-step has only dropped 17% over the last nine years, and thats primarily due to the massive influx of new companies who have adopted non-break-away plans, rather than any significant reduction in companies employing break-away plans. To wit: 84% of all companies over nine years old are break-aways. Matrix plans have also dropped likely due to the increase in popularity of the binary plan, which is actually a form of matrix (they hate it when I say that). Besides the binary, only the unilevel seems to be gaining a slow but steady increase in popularity. Fortunately, Australian plans have never exceeded 1% since Ive been keeping track.
On a scale of 1-5 (5 being the highest, 3 meaning indifferent, 1 you hate it), here are how various types of compensation plans were rated:
Unilevel 3.44
Hybrid 3.36*
Matrix 3.05
Break-Away 2.98
Binary 2.79
Australian (2-Up) 1.88
* Hybrid was included in only about 33% of total surveyed.
This question was especially interesting considering almost half of all comp plans currently being used today are break-aways, and well over three-fourths of all MLM distributors are working a break-away program. This means that a sizable number of distributors involved in a break-away program would have had to rate their own plan type as being less than a 3!
Binaries ratings were also very curious. It seems MLMers either love em or they hate em. Most ratings were either ones or fives, with very few threes.
On a scale of 1-5 (again 5 being the highest, 3 meaning indifferent, 1 you hate it), here are how various types of product lines were rated:
Health Care 4.44
Weight Loss 3.89
Skin Care 3.83
Hair care 3.49
Cookies/Snacks 3.31
Dental/Medical 3.24
Educational 3.17
Cosmetics 3.14
Legal Services 3.05*
Pet Care 2.99
Travel 2.90*
Gold/Jewelry 2.88
Publications 2.74
Benefits Packages 2.74
Water/Air Purifiers 2.67
Automotive 2.66*
MLM Portfolios 2.63
Internet Services 2.55*
Tax/Record Keeping 2.44
Telecommunications 2.28
Lead Generation 2.22
Toys/Games 1.85
Cigarettes 1.57*
Downline Builders 1.54
Chain Letters 1.00
* Recent additions to survey -- figures based on less than 100 responses.
Notice that Chain Letters never received even one rating of higher than a 1. Im impressed, but a little skeptical too. Does this mean no one would ever participate in one, or they have and failed miserably with it?
Of course, the real question here is: do distributors claim to prefer skin/hair/health care lines because thats what the company theyre involved in sells, or are they involved with these companies because they sell the products they prefer?
What seems to be obvious is that Discovery Toys distributors need to participate in more MLM surveys.
Number of total MLM distributors (U.S. only): 7,134,500
A far cry from the 10-15 million we keep hearing about. I computed this figure by adding up all the distributor totals for each of the 458 companies in my database (about half are estimates, but theyre close estimates). These are the 458 most prominent companies and do not include any who are under six months old. So, I then assumed, very optimistically, that there were 300 more companies with an average of 1,000 distributors each. I have also included quasi-MLM operations such as Avon and Tupperware to the mix. I did everything I could, within reason, to justify the "15 million distributor" claim - and couldnt even come close to 10-15 million.
What is even more revealing is that the top 2.5% of all MLM companies (by size) comprised 66% of all the distributors! They averaged 465,500 distributors each, whereas the other 97.5% of companies averaged only 5,910.
And the most scathing evidence against the "15 million" claim is the fact that 49% of all network marketers are currently enrolled in more than one MLM program, so we are actually counting about 2.3 million of these folks more than once!
In other words...
Actual number of current MLM distributors: 4,834,500
Where are MLM companies based -- top ten states:
California 76
Texas 44
Florida 38
Utah 28
Nevada 25
Arizona 22
Illinois 16
New York 12
Ohio 11
Washington 10
Top five reasons given for leaving an MLM opportunity:
1. Didnt make any money.
2. Found a better opportunity.
3. Company went out of business.
4. No upline support.
5. Didnt like the products.
Number of MLM companies whos name ends with "way": 9
Number of MLM companies with "Life" in their name: 38
Can you name them?
Number of MLM companies whos name starts with each letter of the alphabet:
A 66
B 38
C 64... Okay, Im getting ridiculous.
Obviously, Ive hit the bottom of the barrel as far as MLM related statistics.
Copyright 1991, 1996, 1999 © MarketWave, Inc.
Text by Leonard W. Clements © 1999
About the Author
Mr. Clements has been involved in the MLM industry for sixteen years and is a successful distributor for a prominent MLM program
lenc@network-marketing.com
http://www.network-marketing.com
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