What’s Wrong with Multi-Level Marketing?
Imagine this scenario:
On Christmas eve, you are invited to your friend’s house. Your friend’s mother takes out a nice, home-cooked ham which you all share for dinner. After eating, you tell your friend’s mom – “This was a wonderful dinner. How much do I owe your for this?”
What’s wrong with that picture?
According to Predictably Irrational, a book by Dan Ariely, we just violated a social norm.
You see, we live in two different worlds, one in a social-driven world, and another which is in a market-driven world. Business transactions are formal and involves money exchanges. Social norms involve little, small, meaningful actions that we do for free. We would be insulted or amused if we are asked to charge for something we do freely.
Thus, hinting to pay your friend’s mom for the food she cooked is utterly wrong.
What does this have to do with Multi-Level Marketing? According to Wikipedia:
Multi-level marketing (MLM), also known as Network Marketing, is a business-distribution model that allows a parent company to market its products directly to consumers by means of relationship referrals and direct selling.
In itself, there’s nothing wrong with MLM. It’s a basic business practice. It’s often considered one of the most effective business marketing tactics around.
It, however, goes awry when you use move social norms into the market norm.
Take a case scenario from my old officemate:
“I was invited by my old friend to this wedding. When I got there (somewhere in Greenhills), I found out that his reception was also a pitch for an MLM company… and I even bought a gift for them.”
What has happened? You just mixed an entirely social event (a wedding) into a formal business one. What’s the effect? People are amused or insulted.
That’s the problem of MLM here in the Philippines. Filipinos are typically a social folk. We make very good friends and our culture is known for extended families. There are strong social norms here.
Perhaps this is also why MLM boomed a bit when it was introduced in the Philippines. We mixed social/business norms.
In the long run, however, it has had a more negative effect. People are now suspicious of friends inviting them mysteriously to a ‘business’ event.
And that’s what’s wrong with MLM. You just asked someone to pay for something he/she would normally do for FREE.
I agree. In my case, I recently joined an MLM business that a friend invited me in. However, my invitation strategy is based on my standards. I invite strangers so if they comply, the relationship’s all business and I can expect a booming friendship- not the other way around. I don’t do “bait and switch” marketing, I am honest with my future business partners and if one of my prospect persons is a friend or relative, I make sure I disclose what they are getting themselves into.
You see, “TRUST” is a capital in this business and it should never be compromised. Relationships should never be exploited.
I hope other MLM distributors do the same.
When I started in MLM, I am guilty of doing similar stuff as well. I come from the corporate world and it’s quite degrading what some uplines actually teach their downlines to do, giving flyers, cold-calling, kidnapping, etc. I thought there must be a professional way to do MLM and I found it! I now have prospects coming to me instead of me chasing them. It’s a completely different world.
I look forward to the day when Filipinos will actually see the real value of network marketing. The (mal)practices and scams have to be eradicated first though.
I am new in MLM, I was overwhelmed by the business proposal introduced to me. “They” even give me a guarantee of giving me back my money if it didnot work on me. but ther is a big “BUT”, I should work properly and by th rules. They did not say what is the proper rules but always in the Orientation meeting, they say to the invites that if they decided to join, you need to bring a friend, in any ways, you should not tell your friend anything about the business. “They” will explained everything in the orientation. So, Iguess the “Proper rule” they are trying say is to bring a friend and not disclose anything about the business.
Lets get back to me, I already bring 3 of my friends in the business but unfortunately, they did not join. What I wanted to ask here is a help. Especially to you Annette. can you Share to me ur professional way of doing MLM?
I wanted to become succesful in this industry. i hope you can help. Thanks.. john_ebm16@yahoo..
you have been experiencing rejections and this shouldn’t bother you a lot. to grow your network is hard especially if we rely on kidnapping friends and dragging to the seminar rooms or even they know where to go. it’s really tiring and weakening that in the end they wouldn’t do the same thing you did when you got your friend’s deal closed.
this is an old school approach. for some it works especially they invite more enthusiastic ones. however, there are other ways to promote your stuff. perhaps you know this but for me, this works!
a new school approach? yes, making internet as your tool to spread the good news. in my case, i posted ads on some free ads site and it helps a lot. before i posted info, i promised myself i need to do my part to deliver and meet clients if ever they want meet up. even i am shortchanged of the sales i got since some don’t order big bulk, it’s fine with me. what i am looking for is a client who needs more info and perhaps he might get more interested if he knows there’s business side.
you can even make blogs and any people are searching out there and maybe one day they would find it and suddenly make you a call or text.
so far everyday i get inquiries.
thanks for reading. i’m mr. jory arances, a networker for 2 years already. (joryarances@yahoo.com)
multi-level marketing can really give you lots of profits if done right`-*
MLM…yes, I agree with you folks, its an easy, and free enterprise…and if done responsibly…your profits will be more than you can imagine…:)