I was just reading a thread on a forum I like about whether it’s better to prospect and sponsor in your warm market or your cold market. The writer was puzzled by the fact that his upline strongly advised focusing on his cold market, while most MLM companies advise focusing on your warm market (making lists of family, friends, colleagues, neighbours, etc).

What you have to remember is that MLM companies handle marketing. They do NOT handle selling. They’re absolutely useless at selling.

That’s why they outsource ALL selling to their independent sales networks.

(Kind of makes a joke of all those folks assuring you that you don’t have to sell, right?)

Their web sites — including company-provided member sites — are hopeless at selling.

So it figures that their advice on selling is also pretty useless.

Quick recap on marketing vs selling:

The role of the marketer is to identify a need and find a way to satisfy that need. (Needs define markets.)

The role of the seller is to get people to WANT what they need, because no matter how much they NEED it, until they WANT it, they won’t BUY it!

But here’s the twist… I only ever talk to people in my warm market. Unless they’re in my warm market, I refuse to sponsor them.

There’s a lot spoken and written about the pros and cons of prospecting in either your “warm” market or your “cold” market.

Some people are adamant that the “warm” market – your family, friends, work colleagues, neighbours – is the logical place to start, because you know them and they know you, so they’re likely to give you a more sympathetic hearing.

Others are just as adamant that it’s more intelligent to prospect your “cold” market – people you don’t know – because there are no relationships under threat.

For a start, I regard the traditional “warm” and “cold” market categories as much too broad. They’re nowhere near specific enough. “When we deal in generalities, we will rarely succeed. But when we deal in specifics, we will rarely fail.” (Thomas S. Monson)

I teach my own people that there are actually FIVE markets out there, and they’d better know what they are and how to sort the people they meet into those five categories, quickly and accurately, if they want to prospect with genuine success and minimize any wasted time.

Once you’ve sorted them into one of the five markets, you need to know what to actually DO with them, or you risk doing the wrong things for the wrong reasons – a guaranteed recipe for disaster.

Here are the five markets:

1. Your “Hot” market

These are people who are “hot to trot”. They may have even approached you, rather than the other way around. Regardless of whether they’re interested in your products or your business opportunity, all you have to do is give them good reasons to justify their interest.

2. Your “Warm” market

These are your family, friends, neighbors, work colleagues and others who know you well. You have existing relationships with these people.

3. Your “Lukewarm” market

These are acquaintances – people you say ‘hello’ to, but don’t know more than superficially. They know who you are, but they don’t know much more about you than that. You have no real relationship with them.

4. Your “Cold” market

These are strangers. People you don’t know and who don’t know you.

5. Your “Frigid” market

These are people, friends or strangers, who are hostile to network marketing for one reason or another. It may be the result of a bad personal experience, a bad experience of a friend or relative, prejudice, hearsay or deliberate misinformation. Whatever the cause, the outcome is much the same: you risk frostbite by trying to prospect them. They need thawing slowly.

Here’s what to do with people in each market…

1. Your “Hot” market

Pinpoint exactly what they’re looking for and show them how your business opportunity can deliver it. Show them the exact steps and actions needed, and draw up a detailed action plan. If they’re ready to commit to that, in return for your training and support, sign them up. If they’re not, don’t.

The quickest way to lose them is to insist on giving them a long, boring presentation designed to educate people with no exposure to your products or network marketing. You just proved your own incompetence. Get to the point, fast!

2. Your “Warm” market

Offer to supply them with the products only at this stage. There are two critical perspectives to bear in mind with these people, despite the fact that you’re close to them and they’re the obvious people to share your excitement…

“Familiarity breeds contempt.”

“A prophet is without honor in his own country

These people know you. They’re more likely to take you seriously when your situation changes as a result of your new business – when you have some runs on the board.

In the meantime, they’re happy to help out with product purchases, but they’re concerned that your relationship will change. Is profit now your primary motive for being friends? Will you ever have a normal conversation with them again, without banging on about your MLM business?

The best way to show them that the relationship is more important than profit is this:

First, offer to supply them with products at distributor price instead of retail. The trade-off is that they pay with their order, and they collect their orders from you. Otherwise, YOU have to finance their purchases, and they’ll be in no hurry to collect them. This way, it doesn’t matter if they don’t collect their products for a couple of weeks. Spell it out, though. Money with order in return for distributor prices! Win-Win.

Second, assure them that, except when it’s time to place orders with the company and to notify them that their products are ready for collection, the only way your business will come into any conversation between you will be if THEY raise it! Then stand by that commitment, no matter how tempted you are.

They’re going to check you out to see if you’re serious.

They won’t say a word, just to see if you will. But you’ll find that, by the third or fourth conversation, they’ll feel safe raising it, because they know you won’t. And they’ll raise it almost every time! (People are contrary… get used to it.)

WARNING! Whatever you do, don’t make the mistake of sponsoring them just so they can get their products at distributor prices!

By the time they pay for registration and renewals, go to the trouble of ordering from the company, paying freight, etc, any savings will be illusory to them. After all, they’re only buying to do YOU a favour – to help you with your business. You have to follow up every month. Take their order (and their payment), then call them to tell them it’s ready to collect. Of course, if you work with them or see them regularly, cement the relationship by taking their order with you. But don’t make a special trip. This has to be a genuine win-win trade-off to protect the relationship.

3. Your “Lukewarm” market

Supply these people with products, too. But at full retail price. Tell them the same as you told your “warm” market friends and family… that, apart from the times you contact them specifically on business (to take their order and arrange delivery of their order), your business will never come into a conversation between you unless THEY raise it.

Of course, as normal retail customers, you’ll deliver their orders and collect payment on delivery. They’re paying for that service.

Be on the lookout for those in this group who show an interest in your business, but don’t rush it. They’re more likely to watch how you handle things, then express interest if they feel that it’s something they could safely and comfortably do themselves.

Keep your contacts simple. Don’t spout technical details every time they ask a question. Look it up in your manual or product information, in front of them. That way you reinforce the fact that ANYONE can do this business – even them. Prove by your words and actions that there’s no risk of them losing or damaging their relationships if they decide to join you… that this business is SAFE and SIMPLE. They can’t make fools of themselves.

4. Your “Cold” market

This is your sponsoring marketplace. These are the people who don’t know you, so there are no barriers to building a business relationship. They have no preconceived notions about you.

Sure, they may have preconceived notions about network marketing or your company. But so what? There’s no existing relationship, so you can walk away – or even try to change their view – without risk to a friendship. And there’s every chance that you’ll actually gain a friend.

The secret here is to bring them progressively into your HOT market by thawing and warming them up over time. Build the relationship. Invest time and effort. Show them – by your ACTIONS, not just your words – that you VALUE THEM, not just their usefulness to you as a means to an end.

(For an outstanding, real-life example of this approach in action, click here.)

If they’re hostile or frosty, they don’t belong in this market anyway. They belong in the fifth and final market….

5. Your “Frigid” market

Don’t even try to prospect these people, either for the products or the business. Your only involvement here should be to tackle anyone from this market who’s giving any of your new customers or distributors a hard time with their ignorant, prejudiced or malicious comments.

Hit ’em with the FACTS.

Not because you want to change their minds or sponsor them. You need to shut them up, fast, before they do any more damage! They need to be kept on the back foot so that they think twice before mouthing off again. The best way to do this is explained here.

Now that you know how to identify these markets, and what to do with each one, the priority needs to be given to actually finding them.

Hope this helps.

John

4 Responses to “Warm or cold market? Which is better for sponsoring?”