This blog post is the companion post to the video: Why Choose the MLM Model for Your Business? – A CEO Interview. Find out what makes MLM, direct selling, network marketing, and party plan business plans desirable to so many CEO and executives.

Babener: It’s my pleasure to be speaking with Kris Krohn, he is one of the Founders of Strongbrook (REIC). When www.mlmlegal.com sponsors conferences in Las Vegas, we often have the CEOs of companies attend because it’s important to know what makes MLM companies great. And, of course, my observation is that nobody starts on top.

Kris: That’s right. Everybody starts at the bottom.

Babener: I’m curious, Kris. Tell me about Strongbrook, tell me about its origins, tell me about the triumphs and difficulties you had in creating this company.

Kris: I appreciate that, Jeff. I’ll tell you, Strongbrook is five years in the making. And, in fact, I can tell you that for the first four years we kept tweaking our formula because we have a very complicated product that produces amazing transformations for people who leverage and use it. And, it took a long time to really dial that in. It came down to very humble beginnings where we started with absolutely nothing. We were encouraged to keep formulating our product in helping people achieve success through real estate investment with the feedback we would get from our clients.

Then we would bring them more clients. And then we would tweak our program so more. And then we’d figure out how to help them successfully purchase more real estate. We learned along the way things like sleep-well-at-night accounts. There’s a certain amount of money that people want to have in bank accounts to feel comfortable. And really, it comes down to an amazing team and culture here at Strongbrook; where everyone works together very, very well. We have a culture of being very hardworking and putting the client first. That is a really short answer for our history over the last four years. It was about a year ago when we finally said, “You know? With this product we have helped over 1,000 people experience some pretty powerful principles, concepts and even financial changes. It has been a major influence in their lives and created some very positive changes.” We decided that we were not going to tweak our formula anymore.

It’s time to really put it out there on the market. And that’s where we actually sought direct marketing as a very good line of distribution for our business. It took about a year to build that company and put it together, and now we finally released it to the market.

Babener: You didn’t start in direct selling or network marketing yet you had a lot of success doing seminars. What was it that caused you, or basically prompted you, to say: you know what? We want to try to leverage this into something more using the direct selling model.

Kris: You know it’s interesting when you have a recession like the one that we’ve had these last several years; it brings up challenges. One of the challenges we personally experienced is in the world of marketing. We spend millions of dollars on TV, radio, all sorts of different advertising mediums and the things that used to be profitable weren’t. They were becoming less and less profitable over time. And yet, we were actually becoming better at who we were. We were becoming better at our messaging.

So we went to our referral program because our clients would love their experience with us and they’d want to share it with their friends and family. It was only a matter of time before they started asking for a little referral fee when they would do that. And, it turned into a little business for people. So our clients would experience their own success and then they’d want to share it with people they knew. When those people would get started with us we’d pay them a little referral fee. We ran that program for years.

Unfortunately, we had something tragic happen last year where we actually lost two of our best sales people in a plane crash. And when that happened there was a month of mourning. During that month we had time to reflect.  We said “OK,” what’s going on here? All these marketing dollars aren’t working for us but this little referral program has actually produced some of our very best clients. We really gave it our attention.

That’s when we decided that we were going to not just survive this economic situation, but if we actually wanted to we would thrive and do very, very well. Then we would have to think very, very far outside the box and an individual that works here in this company actually had a friend that knew somebody else and before we knew it we were sitting in Mike Sheffield’s office and Mike was sharing with us what direct sales could do for our company if we took it to a very serious level.

It didn’t take a whole lot of contemplation before we determined to assemble what we call a “world class team” and put the appropriate funds toward this project and, like I said, it took a long time to build, but was so incredibly worthwhile. So that’s how we got from point A to where we are today.

I do have to say this, as far as our consultants go (we call them our IPD’s or independent business developers) they’re some of the most amazing, amazing people and we are deeply happy to bring this opportunity to them.

Babener: You know, in our field of direct selling, whatever it is that you’re doing needs to stand on its own. It needs to be something that you can look a customer or potential representative in the eye and say, “I really think I’m doing something good for you.” You seem to, in bringing people to your company, be able to spot great income values in markets like Las Vegas, Phoenix, etc. You seem to have found the bright side of our real estate downturn.

How did you spot that to begin with?

Kris: You know it’s really interesting; we sought out direct sales because at the end of the day we’re not marketers. We are real estate people. We love real estate and real estate is a living, breathing organism. Part of keeping ahead of the game in real estate and being ahead of the curve so to always know where you want to be two years from now, five years from now. And because it’s a living, breathing organism it’s always changing. We always have our eye on the market and we’re looking for trends. We’re looking for opportunities. So, when we decided 18 months ago to open up in some of those hot markets, in Florida for example, it’s because of the perfect timing. You look at the number of foreclosures and those people want to get back in those homes. At the auctions and through other mediums and REO listings, they’re being sold at ridiculous discounts. Our vision, for our investors and for our clients, is to make sure that they are getting the very best product on the market. Why are we in Las Vegas, Phoenix, Florida, and these other markets? Because it’s where the best product is, and our clients deserve that.

Babener: Sounds like you intend to dip your hands in more than just real estate, though. Sounds like you have a vision which is important in any successful direct selling company. What’s your vision of where you’re going to be in years?

Kris: You know if you look at what we do in real estate it is a business in the box. And, it’s a really good business the way we run it. But what we really stand for is entrepreneurship.

I believe that we’ve got a lot of social woes in our country and I believe one thing that is really going to change the climate today and that is if we create a way to support the entrepreneurs of this country. A lot of people have given up on entrepreneurship. And, what we are doing is putting hope back into society by building business models that work. Real estate is just one type of business. Five years from now, we will have all sorts of entrepreneurial programs to create a home, a place for people to come that say, “Hey, you know what? I want more from my life. I have a vision and a dream for an idea in my head that I want to bring to the market!” We want to be there to help those individuals bring their product to the market with success.

Babener: I can see you’re going places. I wish you a lot of luck.

Kris: Thank you. I appreciate it. Thank you, Jeff.

For more information for executives of MLM, direct selling, network marketing, party plan companies, visit the following links:

A Short Course on Network Marketing and Pyramid Schemes – Interview with Jeff Babener

The Role of the Compensation Plan in a Successful Direct Selling Company

How Much Does it Cost to Start a MLM Company?

The Next MLM Startup Conference in Las Vegas – May 16th & 17th, 2013

Choosing the Right Product for Your Direct Selling Company

Where to Find MLM Startup Tips and Answers from an Industry Expert

MLM Executives Must Raise Capital in Order to Recruit Key Distributors

MLM Pyramid Schemes – Everything You Need to Know All in One Place

Interview with Expert MLM Attorney – How to Handle Compliance Discussions with your Distributors

Interview with MLM Attorney On The Difference Between a Pyramid Scheme and Legitimate MLM

Distributor Training – Two Common Questions

Are you Starting a MLM Company?

It’s Passion that makes a MLM Company Successful

MLM Company and Distributor Training on the Direct Selling Industry

Choosing the Right MLM Software and Technology for Your Direct Selling Business

Gaining Experience in MLM – Possess it or Buy it?

MLM Attorney – How a MLM Lawyer Can Help Your Direct Selling Business

Why You Should Trademark Your MLM Company Name

Creating Clear Agreements Between MLM Company Owners

Profile of the Leading MLM Law Firm – Babener & Associates and MLMLegal.com

Learn What is Needed to Recruit Top-Selling Distributors for Your MLM Company

Interview with Expert MLM Attorney – Are Earnings Calculators Legal?

CNBC.com Cites Legal Expert, Jeffrey Babener on FTC Business Opportunity Rule

Why do companies restrict the type of advertising carried on by their distributors?

Paying Commissions on Sales Tools, Sales Kits, and Training Materials……No!

Relationship between MLM and the Federal Trade Commission (FTC)

Four Factors that Make a MLM Company Successful

Explaining Your MLM Company to the Public: Answering the Hard Questions

MLM/Direct Selling/Network Marketing: A Validated Channel of Distribution

Who Should be the First Key Employee that a Company Should Hire?

Is the Compensation Plan the Driving Force for Success in a Direct Selling, Network Marketing, MLM Company?

The Top Two Reasons Why MLM Companies Fail

MLM and the FDA

Interview with Expert Attorney – Factors that Make a MLM Company Successful

How Important is Philanthropy to a MLM Company?

The Hallmarks of Legitimate Direct Selling/Network Marketing Companies

What Differentiates a Legitimate Direct Selling/Network Marketing Company from an Illegal Pyramid Scheme?

How Important are Merchant Accounts and Payment Processing Solutions for Direct Selling Companies?

Should an MLM, Direct Selling, Network Marketing Company Launch Internationally Immediately?

Can You Create an MLM Company and Make it By Starting Small?

What Factors Make MLM Executives and MLM Companies Successful – Video

Make sure to visit our blogs for the latest information on the direct selling industry: MLMLegal Blog Home and MLM Attorney Blog Home

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And, as always, visit MLMLegal.com, the best MLM resource on the web. The next Starting and Running the Successful MLM Company Conference will be here before you know it! On May 16th and 17th, 2013 we are hosting the MLM Conference for the 25th year! This is now our 64th annual conference (held almost consistently three times per year over the last 24 years). All executives/owners of MLM, direct selling, network marking, and party plan companies are welcome to attend. This is the original MLM Startup Conference, hosted and perfected by direct selling industry expert, MLM Attorney Jeff Babener. Call 503-226-6600 or 800-231-2162 to register. (Can’t make this event? Keep an eye out for our October and February conferences as well.)

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