SFR 73: MLM Funnels! Special Interview with Jon Penkert

Ever wonder how the top guys actually make fortunes in MLM? Join us now to hear secrets of the "big guys"...

Steve Larsen:

What's going on everyone? This is Steve Larsen and you're listening to Sales Funnel Radio. Now this is part six of six. This is the last segment of this whole series. We're gonna talk about MLM funnels. MLM funnels, this is gonna be a little bit of a different sub interview than the other five so far, and the reason being is because in the other five, I have always been interviewing an actual funnel builder, right? Somebody who put the funnel together for their business, their industry, whatever it was.

This is a little bit of a different scenario, I have an opportunity to interview an amazing gentleman who has built MLM the traditional way, but without bothering the family members and friends...

You guys know that's my whole thing and so, we're gonna learn how he did that without using heavy tech like I use. Does that make sense? So it's kind of a rare look at this. He's done both seven figures personally, both in his MLM, but also in traditional business. Anyway, he's a very, very rare take on MLM and what it takes to be successful with it.

Then what I'm gonna do is I'm actually gonna show you guys, or rather talk about and teach, why I have an MLM funnel myself and what it does and what it's done for me, and the whole psychology behind it because it's amazing. I've never seen anybody else do it. There's one other guy who kind of came close, but even then, it actually won't do the full thing that this does. Anyway, I'm excited for this interview.

Even if you're not an MLM, I think you'll enjoy the tactics that he uses and how he manages his own business, 'cause I think if we were all to manage his MLM business the way we manage our personal ones, our actual lives would get mentally quieter.

There wouldn't be so much noise in our head. Anyway, let's get into the interview...

Announcer:

Welcome to Sales Funnel Radio where you'll learn marketing strategies to grow your online business using today's best internet sales funnels. And now, here's your host, Steve Larsen.

Steve Larsen:

Alright you guys, I am super excited that you're here listening with me today. We have a very unique opportunity to hear from, honestly, one of the most brilliant people I've ever met. I actually only met him only a month or two ago, but right off the bat I could tell something was different.

I have on the call with me Mr. Jon Penkert, who alone inside of the MLM industry, he's one of the top income earners. He's one of those rare guys that has done both seven figures in regular business, but also seven figures in the network marketing business.

One of the things he's taught me is that most people only recruit two and half, two to three people into their MLM business ever. And to say that he's done, which is true, over $500 million in his own downline is absolutely amazing. Anyway, I'm excited to have Mr. Jon Penkert here with me. How are you doing man?

Jon Penkert:

Hey! Good morning Steve and thanks for having me on the call. It's a privilege to be speaking with you.

Steve Larsen:

I'm really excited that you're here. This is a very unique take. Most of the time when you hear the word MLM, I'm sure you were the exact same, you tend to run the other way.

Most people do anyway, and I know that you've figured out though the way that this whole thing works. But before we jump into that, I actually wanted to ask, how did you get into MLM?

Jon Penkert:

Well, I was an entrepreneur out of college and moved to southern California. I wanted to take advantage of the business opportunities there and leverage my skills and my degree. When I arrived in California, you know it's kind of the mecca for network marketing, I never really heard of MLM.

So, a friend of mine invited me to a meeting and I was very skeptical...

It just seemed too good to be true. I couldn't believe all the money they were making. I was like, "Man, I gotta check this out." And it's funny, you say that people run from MLM. What happened is, I started getting involved in network marketing and then people started running from me.

Steve Larsen:

Exactly!

Jon Penkert:

I learned very quickly that this MLM business, it's rife with problems. You end up losing a lot of your friends in the beginning 'cause you don't understand what's required to be successful, you don't understand that the key ingredients to network marketing that makes successful champions are no different than any other facet of life.

Whether it's business or music or sports, there's a formula to success. Once you figure that out, and you embrace the formula, then guess what?

You begin to have this success that you long for...

Steve Larsen:

Now, did you know what that formula was when you first started?

Jon Penkert:

No. As a matter of fact, I have about 10 years of pain, which means failure. I learned that success is built on the back of failure. I used to tell people, "I'm the biggest loser in network marketing," because I tried everything and did it wrong. So, I got about 10 years of pain before I figured out, "You know what? There's gotta be a smarter way to do this."

Steve Larsen:

That's amazing. So, when you first joined though, what happened? What was all that failure? Most people don't talk about the failure parts, but I think we can all relate to it.

Jon Penkert:

Well, I don't fail small. I failed big. Back in the 80's people in California were making $30,000 a month in network marketing and there was a company called FundAmerica.

You can research it...

It actually is the case that all the case law studies. It changed the industry, because back then, you paid a lot of money for your membership fees. It was high membership fee to get involved in these clubs, these MLM clubs. The federal government shut them down for illegal Ponzi scheme, and so the big boys like Herbalife and Amway, they all went to school on that and they changed how they come to market. So all the case law for network marketing was really centered around that FundAmerica.

You can do the research on the lawsuit. They came out on the other side nine months later innocent and not being convicted of a Ponzi scheme 'cause it wasn't, but it ruined the business opportunity and all the downline had dissipated. All of us that got involved and began to build saw the rug literally pulled out from under us in what we thought was the biggest opportunity of our life and we were all gonna become millionaires.

The truth is, you realize if you don't have experienced leaders that have set a foundation to do it right, you're gonna get taken out and there's a lot of examples of that today but the case law began with that FundAmerica opportunity that I was knee deep in and got the rug pulled out from under me.

Steve Larsen:

So you came in while that was all going on then?

Jon Penkert:

Yeah, actually I had the misfortune of coming in at the end. I got all my guys in and we started running right as they closed the doors.

Steve Larsen:

Oh man! Oh my gosh.

Jon Penkert:

Yeah.

Steve Larsen:

Did you pick up and go obviously to somewhere else then I'm sure?

Jon Penkert:

Yeah. Then I got into a couple other companies. I tried the travel industry, it's big in network marketing, and I tried supplements. That's also big in network marketing. The number one product in network marketing is weight loss.

We live in a culture that suffers from obesity and everybody wants the quick fix. There's a formula to losing weight, but everybody wants to take a pill so often times in network marketing, companies begin with weight loss. It's very common.

The problem with weight loss, for those of you that are in weight loss know that 90 to 120 days into the journey people do one of two things. They lose the weight and get off your product, or they don't lose the weight and they blame your product. You lose your residual income often times in weight loss 'cause people don't stay loyal to the product. Weight loss is a tough way to create residual income.

Steve Larsen:

Interesting. That is fascinating. So did you deliberately steer away from that? You're asking questions that most people who are brand new in MLM never ask. You know? An awareness of the economy and the market and what's selling and what isn't, it's through the roof. It probably wasn't like that at the beginning though I'm sure, was it?

Jon Penkert:

Well, it's not. When you look at an opportunity, most people get involved in an opportunity because it's based on hype, right? My really good friend found this product they love and now I love it. We're gonna get rich together, and we're gonna do network marketing. Those are not good reasons to join a network marketing company.

Unfortunately, that's how most people get involved in network marketing and then when they don't make the money, then they're like, "Oh, what happened?" There's five pillars of things that are important in network marketing. For those of your listeners that want to do the ... I was like, "Where do I find out about how to be successful?"

Steve Larsen:

Right.

Jon Penkert:

Harvard Business Review actually has a study on MLMs and what it takes to be successful. Go read it. Google it and find out here's the key ingredients that you need to be successful in network marketing. It's out there. It's not a secret.

Steve Larsen:

That's fascinating. So you go into, was it FundAmerica? And they kind of go under and go through all that big stuff, and then you transfer to another MLM. Now, were you successful you'd say in that one, or were you still learning what it took to be successful with it?

Jon Penkert:

Yeah. Well, I'm a type A driver and I'm very success oriented. I'm a guy that I'm gonna just try to make it work. I've done a lot of network marketing opportunities, but where I had the light bulb moment, the aha moment, was when one of my friends said ... I said, "Hey, get involved in this one and we're making a lot of money and we're driving the new cars and we're doing all this stuff."

And he looked at me and he said, "Jon, you always get the car but none of the rest of us do." That was where I went, "Wait a minute."

Steve Larsen:

Powerful.

Jon Penkert:

It's not about how much money I can make or what I can do, I want to find an opportunity where I can mentor people and help them drive the new car. So that was a paradigm shift in my thought process. I said, "You know what? I have to look for something ..." There's a word that is abused in network marketing it's called duplication. I got news for you guys, everything duplicates. Success duplicates and so does failure.

If you're using your influence to build your network marketing business, it's not duplicatable and ultimately will fail because your people don't have your influence.

But, if you have a system that people can follow to make money, the system will duplicate and then you have an opportunity in network marketing to create a sustainable residual income. The system has to duplicate, you can't just use your influence and that's when the light bulb went off for me. I said, "You know what? It's not good enough for me to be able to do it, I have to enroll people on the journey and will help them actually accomplish their goals."

Steve Larsen:

That's huge. So from that point on, you went forward and just noticed that it's got to be a system that's duplicatable, rather than you being duplicatable. System wise, what did you go create? What was it that you knew that you had to go do?

Jon Penkert:

Well, the first thing that I do when I look at a network marketing company, is I say, "Look, I need 90 days to see if the system duplicates."

Because once you begin ... most people make the mistake of measuring their success on their signup bonuses, right? "Hey, I went out and got a few people to sign up and they got some people to sign up, and in the first 30 days I made $3,000." That's not a duplicatable system, that's a sales job. The money you make on the front end isn't as important as if I sign you up Steve, and how much money do I make on you four months from now when you're on auto ship? That's the key.

Steve Larsen:

Right.

Jon Penkert:

Because if I want a residual income, it's not your sign up bonuses, but it's your monthly auto ship that creates an income for me. Now, if I have a product that doesn't have a monthly auto ship component, you can't create residual income. It's gotta be something that you need or want every month, right? Most people will buy something for a couple of months, but is it sustainable?

What does that mean? Well, is it something that, as a consumer, six months from now you're still gonna buy? Because if you're not gonna buy it then I don't have a residual income stream, so I always measure the opportunity not how much money do I make up front, but what kind of residual incomes am I making on an auto ship function three, four, five months out?

Then I look at the percentages of growth. If my growth percentage is there, then I've got something. Not the paycheck. If you look at your paycheck in the first two or three months of any opportunity, and measure the long term viability, you're making a mistake.

Steve Larsen:

Fascinating. Okay, so 90 to prove the system, gotta have the monthly auto ship as a component to the MLM you choose, what other components should people look for when they are choosing one?

Jon Penkert:

There's a saying in business, remember I'm a ... one of the things that made me successful in network marketing is realizing that my entrepreneurship business skills, in traditional business, they don't translate well to network marketing. When you try to bring your skill set from a traditional business model into network marketing, it doesn't work. It doesn't translate.

Steve Larsen:

Like what? What do you mean?

Jon Penkert:

Well, entrepreneurship requires a skill set where you have an ability to take risks and make very quick decisions and cut your losers fast and leverage a skill set more than a system. You try to bring your skills into network marketing it doesn't work because why?

[caption id="attachment_1194" align="alignleft" width="430"] Business Colleagues Together Teamwork Working Office[/caption]

You're managing a volunteer army, nobody works for you. It's like a sports team, right? Everyone's part of the team and we want to win together, but since no one works for me, I can't hold them accountable. I have to motivate them, which is why network marketing often times leverages self help. Become a better version of yourself, work on yourself.

Steve Larsen:

Fascinating.

Jon Penkert:

Because the stronger self you have, the more people you're gonna lead.

Steve Larsen:

Fascinating. It is all about the motivation then for that. I didn't realize ... I mean, I knew that MLMs kind of like bus op wrapped around ... with the personal development wrapped around it, but that's a fascinating way to describe that though. I've never thought of it that way.

Jon Penkert:

You said what's important? What do I look for? Sports parallels business that parallels network marketing, and what am I talking about? Leadership is the number one thing that has the biggest impact on your success.

Why is that?

Because the rate of the pack is determined by the speed of the leader and it doesn't matter if you look at successful sports teams or businesses or network marketing, you gotta have good leadership.

That's one of the things that I leverage going into an opportunity is are the leaders experienced? Are they just a bunch of guys that found a product and have never run a network marketing company? Or are their leaders proficient at the global business model? Because, listen you guys, today network marketing is the business model of the 21st century. There is no greater.

What you are going to get paid to do is monetize networks that you build globally, not networks locally in a local market, but your ability to sell products and services globally in a global market place. Which means what? Language conversion, currency conversion.

You monetize global networks, you want to be with a leader who's done that before. Somebody who's opened up other countries. Someone who understands logistically how to deliver products into those countries because you can have the greatest product in the world but if you don't have a leadership team that can deliver, you're gonna end up with a lot of unhappy customers.

Steve Larsen:

What are you doing to train people below you to become leaders? Like you said, that really does seem where all that duplication is even possible.

Jon Penkert:

I have my own philosophy on leadership. In the leadership circles, I've studied leadership and there's a great argument in leadership, and it's are leaders created or are they born?

Steve Larsen:

Right.

Jon Penkert:

They go back and forth on that question. The truth is it's neither. Leaders aren't born. You're not a born leader and you can't just choose someone and create a leader.

Steve Larsen:

Right.

Jon Penkert:

I like to look at leadership one of two ways. You're either a cheerleader, which sits at the back of the room and encourages everybody to be the best they can be and go out there and charge and go do it. Then there's the servant leader that says, "You know what? I'm going first. I'm gonna go and go across the river and swim across and make sure it's not dangerous and make sure it's attainable. And then I'm gonna encourage my people to follow me."

Leaders are neither born nor created, leaders are chosen...

The masses will choose to follow you if you're cutting the path and doing the right things and having the success. Success attracts success. So as a leader moves forward quickly, there creates a vacuum that people will follow. So my definition of a leader, first and foremost, is the visionary who's following the path and setting the right example and the people will follow.

Steve Larsen:

That is definitely the best definition of leadership I've ever heard. Okay, a cheerleader or a servant leader and you're chosen by others based on you cutting the path and being an example. Wow, that's amazing! So you go out and you're teaching others to do that obviously, because you've chosen an MLM with the monthly auto ship and you have to develop new skills, you now have the potential for actual residual income.

What are you doing to actually find people? It was fascinating, you told me when I first met you ... what do you say? The average person recruits only like 2.3 people in their life ever?

Jon Penkert:

Well the industry standard, and look, these are standards. Jim Rohn is a great leader and champion of network marketing. You can't beat the system and the system says the average person is gonna recruit 2.5 people in their career. So what network marketing companies try to do is they try to attract the superstar recruiters that are gonna recruit 200 people, but just do the math.

Eventually, if you have a system that requires the average person to recruit more than 2.5 people for instance, well you're gonna set them up to fail. You can't beat, basically, the laws in network marketing.

Steve Larsen:

Interesting. Okay, so one of the other pieces you've taught just floored me. I mean, I just was blown away by this strategy. Before I did any marketing, I actually was going into CIT. I was gonna be a programmer, and I was learning about these things called binaries but you dropped that word and it meant something totally different for MLM world.

Do you mind describing what it is that you were sharing with me?

Jon Penkert:

Well let's take a step back. The one thing that's consistent in life is change.

Steve Larsen:

Right.

Jon Penkert:

Change is always gonna happen. If you'd have come to me 10 years ago and said, "Jon, I got an MLM and it's a binary. Will you join?" I don't want to join that because an old school definition of a binary, the way they set them up really hurt people. The fairest comp plan was the uni-level.

There's matrix and there's different comp plan styles and different hybrids, but all of the legacy companies ran a uni-level platform.

The truth is, in a uni-level, you've gotta bring your 20 friends into a room, get them signed up, push them out, say, "Go get your own 20 friends. That's how I make residual income, but you gotta go to work and get a job."

Steve Larsen:

Right.

Jon Penkert:

That really catered to the type A drivers who could recruit, but it doesn't help the average person. Why? Because the average person is only gonna bring in a couple of people and now you need a front line of 20. So it begins to unravel. Now I say that, I made a lot of money in uni-levels, but today, the hybrid binary's serve the masses the very best.

Now why do I say that?

Because if you have a system where the average person is gonna get 2.5 people recruited and you have a three-legged system, four-legged system, five-legged system to be successful, you're setting yourself up to fail.

But if you have a binary system, which is a two-legged system, and you're building a team and 100% of the people as the recruiter that you bring in, either go onto your left team or your right team, that means each person benefits from not only your ability to recruit, but I've set them up to succeed because their 2.5 people does what?

It qualifies them. One left, one right and now they have at least a half a person overflow into their downline, so now every person's adding to this success of the system and the system supports the 2.5 people they're gonna get. If that makes sense. I know sometimes when you talk about numbers, people get a little foggy but that's the reason the binaries today are the best leverage point to create residual income.

Steve Larsen:

So for example then, just so everyone understands on who's listening as well, my first month of MLM was a classic example of ultimate failure. I did a great job of recruiting people. I literally went down Main Street and I recruited 13 people in that first month, but I spread them so wide. You know?

They were out all over the place, and you're saying that's not what I should do, right?

Jon Penkert:

Yeah, let's look at it. I like analogies in life. If you take a very large room and you have all of these light bulbs that are lighting the room, the light source defuses the light and it lights the room.

Steve Larsen:

Right.

Jon Penkert:

But that's not maximizing the energy. Laser beams maximize the energy. If you took all the light and you focus it into a small beam you can cut steel with it. When I'm running a team, as a leader, I want to maximize their efficiency. I don't want them focused on 10 legs on their front line, I want them to run this business with maximum leverage.

Two-legged systems does what? It focuses their time and energy in basically two streams, so you're not defusing your energy. You're focusing energy and your teams can run faster.

Steve Larsen:

Just in case people don't understand also the lingo or jargon, you're saying only two-legged meaning I'm only gonna put two people directly below me, right? And then try and do that for the people below them also, right?

Jon Penkert:

Yeah. In a binary system, I sign you up Steven and you go get two people. One left, one right. They get two people. One left, one right. Now, when you get the third person in the business, it has to go under Team A or Team B. Now, what's happened is those people that have joined you in the business opportunity, they take advantage of their upline, your ability to recruit, to help them build their residual income.

That's powerful...

That's what J. Paul Getty said when he said, "Look, I'd rather have 1% of a hundred people's energy, than a 100% of my own." Right! I want to join a team of leaders that are recruiting because I'm gonna bring my two people, and my people are gonna bring their two people. Then, the overflow, you have an opportunity now to gain the advantage of your upline's recruiting ability. If that makes sense.

Steve Larsen:

Yeah, it really does actually. That's fascinating. Now, when you were saying that all binaries are not created equally as well, I guess compared to what you just said right there, could you show what a bad binary would look like?

Jon Penkert:

Well, I hesitate to step into that because there's a lot of people that make extraordinary incomes in uni-levels, and extraordinary incomes at what I would consider a bad binary. There's good binaries and there's, let's say, better binaries. Right? I look for best in class and there's a series of things that are qualifiers that will tell me, "Is this a good deal or isn't it."

Honestly, I'm gonna step aside for a second you guys. Look, you don't do this business by yourself. When I lead people, I tell them, "Look, you're a sum total of the five people that most influence you. Who are the five people that surround you?"

My life is no different. I've got very good leaders around me that I consult with. When we look at a comp plan, I don't look at it by myself. I get my business partners to pick it apart as well 'cause I'll only see a certain deficiency, but I've got guys that break it down.

They go, "Look, here's why it'll succeed and here's why it won't." I don't just rely on my own ability to analyze. I've got strong partners around me and each of you should do that. Your upline, your upline's leadership, and the downline, the people that you're attracting into your business. You have to surround yourself with strong people. That's a business acumen issue, that's not just MLM. It's good business.

Steve Larsen:

You've completely opened my eyes to more of these. The way you run the business is fascinating.

Even the fact that you said, that I have a business card. Why don't you have your own business card to hand out to everyone? You don't run it really cool man. It's so awesome.

Jon Penkert:

I don't have a business card because I want my people to trust me. As a leader, if you lose trust, you lose everything. So when I go in and speak, I'll speak in front of rooms of 20 people and 2,000 people, but what happens is people come up to me and they say, "Hey, Jon. I want to join your team. I want to be apart of your deal. Or do you have a business card so I can contact you?" I'm not there to recruit my people's people.

The only way you get ahold of me is really through one of my leaders. So I don't have a business card because I'm not looking to recruit anybody.

The other thing is what I've learned in the business as well is, even if I come across a cold prospect on an airplane if I give them my business card, I have a 100% chance of them never calling me. They just don't follow up.

Steve Larsen:

Yeah.

Jon Penkert:

But if i say, "You know what? I don't have a card but let me get your number and I'll follow up with you."

Now I've taken control of the relationship.

It's amazing how I always have a chance to follow up with them if I don't give them a business card. It's part of a business progress, but it's also part of my leadership where I don't want people thinking I'm gonna cross-recruit their people. I work for them, and when I'm in one of their business meetings, then you can always contact me through them. If they want to give out my phone number, they can.

That brings up another subject that you ... I'm gonna keep rambling here.

Steve Larsen:

Nah, I love it.

Jon Penkert:

What happens is, as you build these teams ... I've only recruited, best effort, between 30 and 40 people in any network marketing company I've ever been in because once you start building a team, I start working for my downline.

Steve Larsen:

Right.

Jon Penkert:

So when I go into your home, I meet your 20 people, guess what? There's two or three of them that want me to help them build their business and I meet their 20 people. The masses that I've created, I've done one person at a time partnering with them and building their business. So I don't have to recruit a lot of people personally.

All I have to do is be a leader and work with my downline and the masses will come if you do that.

Steve Larsen:

Yeah, it's great. It's absolutely great. And so, if you go out and you have that servant leader attitude, obviously that we've been talking about, and ... Anyway, I'm taking huge notes right now, just so you know.

I'm drawing circles around all the key pieces and putting it together because this is really awesome. I hope all you guys listening are doing that too. I do that for every one of the people I interview. This is really, really interesting. So, if I'm brand new in MLM, brand spanking new or say I just joined a new one or whatever, what are the first key pieces you'd have me do as a new person into an MLM?

Let's say it's in the chosen one you like where there's a binary with it, there's auto ship, all the pieces are play. What would my roles be?

Jon Penkert:

Well, I would seek, as fast as I can, who's in my upline and who the leaders are because the upline leaders are waiting for their phone to ring with their downline because they want to work with them and they want to help build the business. You might as well leverage their experience because I guarantee you're two friends that you bring in, they don't know anything more about the company than you do.

Steve Larsen:

Right.

Jon Penkert:

The closer you can get to your upline leadership, the better that it is. I tell you what, here's what I wish I would have done and for all you guys that are new to the business, I wish when I was out of college I would have gone and looked in ... You know, the DSA today, there's about 20 to 22 legacy companies that do over a billion dollars. We're in an industry that does $130 billion globally. There's about 20 companies that actually do over a billion.

I wish that I would have found a product that I really liked and believed in, and then joined the legacy company for a couple reasons.

Because then I would have learned the successful tactics and strategies of a network marketing company and I would've got connected to leaders in the industry because if you think that five years from now, somebody's not gonna come out with the latest and greatest something and turn it into a network marketing company, you're wrong. The relationships that you build will sustain you throughout your career.

So, I wish I would have just gotten involved in really good companies and learned some principles and met amazing leaders because that's what network marketing's about. It's about connecting great leaders.

Any of your listeners, go find a good company and get involved with them, not because you're ... I hope that you spend the next 20 years with them, but you probably won't because the truth is, when you're looking for a good network marketing opportunity, the one thing that I cannot teach or coach you is something called timing.

Well, the time to get in those companies, honestly, was 20 years ago when they started. Right? Now you're not gonna create ... it would be a rare person, somebody probably will to prove me wrong but, the average person isn't probably gonna get in there and create an extraordinary six figure income because they've had their run.

I want to look for a company that's been around for a couple years, they've got their ground work underneath them, they're doing 40 to 50 million a year, and they haven't hit momentum.

The key is pre-momentum, and you'll get that in the Harvard Business Study Review, when you read it. You want a company pre-momentum, so that you're the one that is building the legacy and the income. When they do a billion dollars, you've helped them grow from 50 million to a billion.

That's what you look for, is timing. That's the one thing that you can't teach or coach, is to be in the right place at the right time.

Steve Larsen:

That's interesting. Do you have any tips for how you find a company that's pre-momentum?

Jon Penkert:

Very difficult. You gotta keep your ears open and be connected to a lot of people, which is why I said ... you know, if I was ... a great opportunity for even college kids. I think every college kid, the skills that you learn in network marketing will carry you through the rest of your life.

Go out and find a good company that you believe in the product and get involved and learn how to create these residual incomes because it's those people that you need that are gonna introduce you to the next big run.

Steve Larsen:

Yeah, and I appreciate that that's what the advice you said, if I was brand new. First, know the leaders, know your upline. I never took the time to do that my first round at it. I joined one, seriously, just 'cause my buddy was in it. I mean it was the exact opposite of what you just said I should do when I did that four years ago.

Pretty much every entrepreneur I know is out there, whether or not they'll admit it, has been part of an MLM. It's such an awesome career. It's a great place to go to. The reason, obviously, why a lot of people have a bad taste in their mouth is because some over eager upline person turned around and badgered their family and badgered their friends and, honestly, hurt some relationships.

How do actually recruit? How do you get to getting leads in this industry without actually hurting those relationships? You know what I'm trying to ask? That was poorly worded.

Jon Penkert:

What happens often times, people get in these network marketing opportunities, they look at it as a "get rich quick" scheme. Right? Like, how can I make money off of you and your friends?

Steve Larsen:

Right.

Jon Penkert:

Then they get disappointed because that mindset fails them. It's really not the servant leader model, and so, when I talk to people who have been hurt been network marketing and we've all been in a network marketing company that didn't work out for lots of reasons.

Steve Larsen:

Sure.

Jon Penkert:

But I always tell them ... Zig Ziglar I think said it best. He said, "Create enough opportunity for people and give them what they want, you'll end up getting what you want." And so, what I've learned in network marketing, especially if I've dealt with similar experience, I'll say, "What are the things that your upline didn't do for you?" I teach them to be the upline that they wish they had. People resonate with that.

They realize, "If I do the things for my downline that I wish my upline had done for me, I'll create extraordinary success." And again, that's that leadership model of leading by example and not being a cheerleader. I'm gonna get in there and do the hard work with them because together we can do great things. That's really what I try to get people to focus on. When they have bad experiences in network marketing is, "Hey, let's you and I be the leadership team for your downline, that you wish you had."

And so, "Be the upline that you wish had," is my best practice.

Steve Larsen:

I appreciate that answer. I very strongly do believe in an element of business karma, if you go around and you start trying to help people and you put out legitimate value out there. It may not happen all at once, there's got to be this mentality of dropping your anger and not moving forward for a while, it's not a "get rich quick" thing, but eventually you do get what you'd like. It'll come, and almost be surprising, over night.

Just kind of show up. That's great...

Jon Penkert:

What people don't realize is that you attract what you put out there, so if you don't like what you're getting, take a step back and look at what you're putting out.

Steve Larsen:

Do you have any last pieces of advice for someone who, let's say they're in one, they like the product, there's not really a whole lot moving along ... what should someone be involved in daily, those tasks, those rituals that keep them engaged in the process?

Jon Penkert:

The biggest thing that I can do for each one of your listeners is ... You guys, take a deep breath and look in the mirror, because the number one quality that drives my business overall, is a belief in your self. You have to believe in yourself.

Find a company with integrity, with a great product, and a good comp plan but then, look in the mirror and go, "You know what? You are at the right place at the right time. You were chosen for this opportunity and go get it." Because I can't stop a person that 100%, rock solid believes. They will go out and break every barrier out there if they just believe.

Steve Larsen:

Yeah.

Jon Penkert:

As a leader, most often, all I do is get people to see that they have everything that they need to succeed. They just have to believe and go do it.

Steve Larsen:

Very enlightening, very fascinating. I appreciate that a lot. Now, you've obviously mentioned you don't have a business card and you work with the people directly under you, if people wanted to reach out or learn more about what it is you're doing or some kind of an action follow-up after this podcast, where should people go? What should people do?

Jon Penkert:

Well, Steven I totally appreciate and respect you and I'm glad that you invited me to be on your broadcast. This, for me, was really a favor to you. It wasn't an opportunity for me to recruit. I don't think I'm that great anyway, but I think that you find out who I am and what I'm in and you want to get involved, I would say embrace a local leader in your local market that's on my team that's great.

I'm not here to recruit people, I'm just here to support. If they want to reach out to you, you know how to get ahold of me. Let's work it that way.

Steve Larsen:

Sounds good. We'll do it that way. Awesome. Jon, thank you so much. I appreciate that. This has been fantastic.

Jon Penkert:

Well, it's my absolute pleasure and I look forward to working with you in the future. I'll tell you something. In life, when you get two people ... I love the mastermind principle. You get two people, it creates a third more powerful mind. You can change the world getting two people committed and believing in themselves and moving in the right direction. So, I thank you Steven for what you bring to the table and your commitment to success.

Steve Larsen:

Alright you guys. Now at this time, what I want to do is to show you guys a little bit more about the actual funnel that I've been using to recruit for downlines. It's amazing.

I came up with the concept about four years ago. I never thought that it would actually come to fruition as quickly, or as powerfully, as it has. What happened, basically, is I joined this MLM and it was terrible because I literally went down Main Street. We just found out that my wife was pregnant with our first kid and I was excited, but really honestly, I was scared out of my mind because I had no money.

I had nothing...

I know a lot of people listening to this are still trying to figure out what there thing is and they're still trying to create with their product or what ever it is, their first successful funnel or whatever. Just know that I know the feeling, right?

What happened was, basically, my buddy came in and he recruited me. He said, "Hey, come join this," and I was like, "No. That's a stupid multi-level marketing thing. I'm not gonna do that."

I ended up joining his after he was begging. But I did it with the reason in mind like, "You know what? This could pay for the birth of my child." I was like, "Hey, the clock's ticking. I got nine months. Let's go do this." What I did is I started studying and reading and I was literally going door to door. I was like, "If I'm gonna do this, I'm gonna do it 100%." And so, I literally did, I went down Main Street and I recruited 13 people my first month.

First off, I just want to say, I'm never ever gonna tell you the name of the MLM. That's not the purpose of this. I'm telling you this, "You can use what I'm telling you right now in any MLM." Okay? I'm just gonna get that big elephant out of the room real quick.

I was studying one night, and I realized that after I recruited those first 13 people, I was like, "Yes, this is awesome. This is totally duplicatable. I got all these people now." The problem was that literally none of them did anything at all. I literally had to take a cattle prod. I remember driving once three or four hours, something like that ... Yeah, it was three hours, three hours in a single day. I think so. Anyway, it was a long way ... just to meet with somebody just to see if they had actually done anything because they wouldn't answer the phone calls.

I couldn't motivate them. I was like, "This is not sustainable. This is not duplicatable. Whoever told me this was passive income was lying."That was my attitude, and there was an element of truth to that. I was like, "There's got to be a better way to do this."

What happened was, one night, it was like 3 a.m. in the morning or it was 2 a.m., 2 a.m. in the morning, I had class in a few hours. I was still in college, obviously. I was reading and all of sudden this guy ... I can see his face, I don't remember the eBook, I don't remember what company, I don't remember anything. I just remember hearing the concept "paid prospecting".

I was like, "What? Is this real? Is this true?" Now, this is the dark ages. This is pre-ClickFunnels days or about the time they were launching actually. I was like, "This is fascinating, and you mean, you get paid regardless if somebody joins you? Fascinating. What?"

I had this idea, what if I gave ridiculous value upfront, for free, for something and then something small paid, kind of like mid-tier, and then something more high ticket in the backend, and those people are the people that I go approach. Not family and friends. I can honestly say, and still say, that to this day there have been people, four years, me approaching them about MLM it hurt the relationship. I was like, "This is garbage. I'm not gonna do this. If this is what this industry is about, I don't want to do it." I know a lot of you guys are the exact same way. I was like, "What's this funnel thing?"

I had been building, basically the equivalent of funnels, in WordPress prior, before ClickFunnels days. I had a whole bunch of my own clients. It was a lot of fun. We had successes. We had failures. This is the story, you know?

Basically, what I realized is like, "What if I created this thing? I'll go film it." What I did is I basically funnel hacked.

Again, I didn't know that was the term or whatever, but I went and I started looking at all the top MLMers who are out there. I started asking like, "What are they actually doing?" And you know what's funny is that after a couple of months of just deep diving into each of these guys, I realized that none of them were doing home meetings, none of them were doing hotel meetings, they're not going getting on the phone, none of them were going to their family and friends.

They had created for themselves something unique. But what they did all have, every single one of them, had the equivalent of a funnel. They had their own website. They had the equivalent of a Webinar. It was interesting. It was so stark when I started looking at it. I was like, "This is the way to do that. Why have I been doing it the other way?"

So what I did is I literally was taking some of these top guys courses...

I was transcribing them. I was turning into my own. I was adding whole courses and elements to it. I went and I re-shot stuff. I put things together. It was one of the coolest things ever. It took me eight months, 'cause I was in the middle of college, I was in the army, we had our first kid. It took me a while to get it out, but when I did, nobody bought it at first. I had done a terrible job going around and sharing it with people.

Honestly, what was really happening is I was graduating. There was a lot stuff happening. There just was. I was trying to become an officer. There was a whole bunch of stuff that was happening in my life and so I moved on.

But some dude stumbled upon it and was like, "Oh my gosh! This is absolutely insane. Why are you not selling this more?" And I was like, "You know what? That was pretty cool." I went and I launched it and it was like massive, waterfall response. So many people just started coming out of the wood work, people I'd never heard of. I was like, "Holy crap! This is working." Pretty soon, I had a waiting list of like 12 people begging to join my MLM. I was like, "What the heck? This totally worked! Oh my gosh!" Anyway, fascinating.

Well, it was my first attempt at making something that was bigger and there was a lot of things that were wrong with it. I had been redoing the entire thing and putting it all together.

Basically, this is what happens, right? Just like Jon was saying. One of the problems is that people have not learned how to become attractive. I'm not saying good looking or whatever. I'm sure your all drop dead gorgeous. But you're not attractive yet.

In MLM, you have the same product. You have the same service. You have the exact same scripts, the exact same websites. There's literally nothing different about you. Why would I join you over somebody else? There's no reason. There's no reason to. The one currency that you really have is you. You must be different. There's really two currencies, but that's the first one.

The first currency, you must be different. You have to be sellable. You must know you. You've gotta find your voice. You've gotta know your message.

That's what this new course that I've been talking about is gonna come out and talk about. Anyways, it's been a lot of fun. I've had a lot of fun putting it together. So, first of all, that's model number one. It talks about becoming attractive and how you actually attract people to you, how you create things and products that are free, that just deliver a crap ton of value because if you can do that, it will pull people to you in a really fascinating way. Right?

You'll be giving before you ever ... you'll be leading with value before you ever even mention the fact that you have an MLM, right? I never even tell anyone about it ever. They have to find it through my funnel, and when they do, then I'll talk to them about it. Otherwise, it becomes this awkward thing and you have side agendas with every conversation. I hate that. I'm so against that. That's the reason I put this stuff together. Anyway.

Second thing that it talks about is validating. So now if you've got people in through free stuff and you've attracted people in, the second part is a validation thing meaning I need to validate how serious this person is. If someone spends a little bit of money on marketing education for their MLM, I know they're serious.

And so that's what I created. It was like a free plus shipping thing. And when someone bought it, I was like, "Hmm. This is not your standard MLMer." There's well over 10 million MLMers in America alone. Like, "Okay, this person already is separating themselves from the remainder of the people." And that's what I wanted.

The third part then was now that I've pulled them in, I've qualified them, now it's all about the duplication and actually selling them. Right? That's what I use Webinars for and no one really has ever seen that before, which is awesome. Very few people have which is so freaking cool, anyway. But the Webinar goes in and auto closes and recruits and gets them signed up. It's amazing.

Then after that, then it talks about some of this downline management stuff where I'll show you how to rob your downline. Meaning, there's a really good way to do this and a really bad way to do it and Jon touched on that, which is all about binaries, but, the right way to do them.

Yes, the principles amazing, but there's a right way to do it just like he was talking about. You know, leadership training. I'm gonna have a lot of cool stuff. I'm gonna talk about when to rinse and when to repeat. How do you tell?

It's weird to think of it like this, but it is a business and if someone's not doing their thing, might be time to rinse. If someone's run along with you and they can run with you, time to repeat. You do that through a very specific thing, and I'm not gonna give the golden nugget away, alright? There's a golden nugget to it. I'm totally gonna bait you guys. It's been ridiculous.

Just the paid prospecting aspect of what I built up alone, without any ad spending, I made 50 grand last year. It was nuts. No ad spend, nothing else, it's just up, just talkable word to word, mouth to mouth. I didn't talk to anyone about it. There's very specific strategies I used and the people that are coming to me are asking to join. I don't even tell them I'm in one. Have I even told you what I'm in? No, and that's the reason why.

That's why this is so powerful and why I've been so passionate about it...

People are like, "Steven, MLM? Seriously?" Well, yeah actually. If you know how to work the system in a good way, if you know how to create a new opportunity, if you know how to create an offer, if you know how to do marketing, if you know how to do everything that Russell teaches, then yeah. Why the heck would you not, if you can do that?

Then, the last part that it teaches you how to do, what it is shows you is I call it "pick your megaphone", "choose your megaphone", meaning, just choose one traffic source. Anyway, there's way more to it. There's a lot more that's been going on that you guys have no idea about that I totally kept from you for the last six months. It's been so sweet, all the pieces coming into play. Software pieces ... it's been great. It's been really great. I can honestly say very proudly that there's no one else on the planet that's been doing what I'm doing and it's ... Ah, it's so cool. I wish I could tell you more, but I can't. Anyway.

That's what I want to talk about funnel-wise though, alright? Funnel-wise, and please understand, again, I'm not here to pitch. I'm just here to tell you what I've been doing because this is the sixth segment of this series, which is all about MLM funnels.

So, what I've been doing, is I've been pumping ridiculous value into the MLM space. I know it's so good that people should be paying for it, and they know that. That's the feeling that I want them to have. Then I go through and I qualify them through something that's free and ... I'm sorry, something that's free plus shipping or whatever it is. Low ticket, 47 bucks.

Honestly, I don't really think it matters that month. All your doing is your vetting out the good people. What's funny is that little vet move that I've been doing, I've talked to more owners of MLMs from that one thing than any other thing. You get the kind of fish that you put the bait out for, right? You know what I mean? Put better bait out, you get better fish.

And so, I created a vetting system...

Funnels are not just ways to increase our average cart value. They're also ways to vet people. That's exactly what an application style funnel is. You're trying to have them apply. You want to sift out the dirties, the people who are just never gonna do anything with you or who are just the kind of people who you help like crazy but they'll always complain or the people who just won't go take action. You know what I mean? I don't want those kinds of people and I know you don't want it either.

So, first I attract through a lot of different ways, really amazing things actually. Then the second part is all about some kind of qualifier, money-wise. Paid prospecting, gotta charge. Right? Then after that, then I go close them through some more automated processes, specifically through Webinar funnels. That's what's been working for me and that's why I've been doing it.

Anyway, I'm not the focus of this interview. I just wanted to be able to toss in more of what I've been doing funnel-wise to you, so that you have an idea that there is actually a really awesome way to do it without ever talking to family, every talking to friends, and if you want to, that's fine. I'm not trying to dissuade you from doing it.

I'm just telling you that I am really against that and I don't do it for a lot of reasons.

I specifically target the kind of individual that I want. I want someone who's a rockstar, someone who loves marketing. You know what I mean? Those are the kinds of people. Then what I do is I ... My team is very, very, as far as my own personal downline management strategies or whatever, I feel almost weird saying this to you guys, 'cause this is not the typical audience that I say this kind of stuff to, but what I do is I say, "Hey, look. I'll give you my entire marketing system if you come join." You know what I mean?

Those are the things that you create yourself that make you attractive, otherwise, you're the same thing. Now, as far as a product standpoint, and fulfillment standpoint, and having to worry about customer service, MLM is fantastic because you don't have to worry about any of that.

They take care of all of it...

There's really ridiculous advantages to being a part of it. It truly can be passive if you set it up the right way. The problem is that most multi-level marketers, network marketers, have no idea how to market. And you're like, "What on earth is so..." Anyway, that's what I've been doing and it's been kicking butt. Anyway, it's been great. Not trying to be cocky, I'm just excited.

Anyway, if you are interested though, go check out secretmlmhacks.com just to see what I'm doing. Again, not pitching you, not trying to be weird or whatever. Just so you guys can see how I've been doing it.

If you love your MLM, stay in it, which is awesome. So anyway, go to secretmlmhacks.com to watch real time what it is that's been going on there in the MLM world. Alright.

Hey, guys, that's been the last part of this series. I've loved doing this with you guys. I've loved going through this six part series. I have more interviews that I've already lined up. Might be the next one, might not be. But anyway, we're gonna get back into ... Usually I try and publish two times a week, but these have been an hour long, almost every single one of them.

Now, if you really want to watch behind the scenes, as far as my hands, watch the magician hands, the real purpose behind these, yes it was to provide amazing value but there is something else that I did these interviews for that will help you. Anyway.

Keep watching everything that's going on. I think you guys will enjoy it and please, these speakers have done amazing things, they have dropped insane value. I want you to know that the listenership has well more than doubled because of these. It's not because I know that I'm great or anything like that. I has nothing to do with that.

It's because I understand the value these guys have been pumping out there...

Anyway, I've got a great follow-up episode already that I'm gonna be doing. I think you guys will like the next one. I'll talk to you guys later. Hope you enjoyed it. Reach out to the speakers, tell them thank you so much. And go take some serious action, and you will enjoy successes.

Alright guys, talk to you later. Bye!

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