Network Marketing – 4 Reasons Why They Have Such a Bad Reputation
Why is it that businesses which pay other people to sell their product to friends and family have such a bad reputation when marketing experts agree that the most powerful advertising out there is word-of-mouth?
Well, as I and others have observed in the last twenty years in the industry, there is a trend that very well may be causing this bad wrap, if not at least a major player in contributing to it.
I’ll name it DEFAULT
We’ve all experienced it. You get a program and fine tune it to your needs. What a joy it is. The sun is shining, the birds are singing. The blossoms are filling the air with fragrance. Then one day something happens and returns all your settings to DEFAULT. And there is no way to retrieve your former settings except by starting at the beginning again. Dark clouds gather. Hours are lost, appointments missed, decisions delayed, emotions run high, and many other things go wrong. All because of DEFAULT.
Almost every business around runs on a pyramid plan, not only network marketing businesses. Let me explain. There at the top of the company is the big CEO or president who’s the leader of the whole show. This person has a few people he/she trusts who help run everything. These folks are the managers, right under the CEO and report to him/her. The Managers in turn have others who report to them, and so on down the levels with more and more people on each level down. Of course, the wages are according to your level. You wouldn’t imagine the janitor being paid more than the president, or the manager being paid more than the president, right? That’s the basics of the business model.
So then a network marketing business starts up and changes how things workso it’s advertised.
“Just stick with us, and we’ll show you the best business in the world. In our business, you don’t have to stay on those bottom levels and get paid less that the president. You can enjoy living like a CEO, have vacation whenever you like, travel the world in style, and even have oodles of time to spend with your family” and on and on and on they tell you. They draw circles all over a piece of paper and who you how it’s possible.
All goes well… for awhile. Then one dark, dreary day you realize your American Dream, with all the fine-tuned settings you have struggled so hard to make, has gone into DEFAULT. And you find yourself again on the bottom of the pyramid, just like in conventional businesses.
Most people don’t realize that nearly every network marketing plan is designed with a DEFUALT button. This causes it to go back to the old pyramid style of big CEO at the top racking in the cash and little guys on the bottom scrounging around for whatever little money they can make. This DEFAULT system works with various methods. They’re called by a variety of names, but we’ll list only four here. I think you’ll recognize them.
1. Jump-start: knowing that many will never get beyond their initial “buy-in”, they push you to “tell everyone” you can about the opportunity. This gives the company free advertising and some quick profits from the “introduction package” you just bought.
2. Breakage: when you have to give up your “points” or “bonuses” because you didn’t meet some monthly goal. The company keeps the money.
3. Break Away: When you’re promoted to a higher level, you have to leave behind some of your earning potential that you worked hard for. The company will keep that money for their own pockets.
4. Exhaustion: by requiring constant enrolling of new people the company knows that eventually you will tire and give up. They know the average recruit will enroll only 2-3 people, so they keep the recruiting requirement high. The company now keeps what you worked so hard to build.
So that’s a brief description of some of the systems that most network marketing programs use. They actually intend to cause your business to DEFAULT back to the conventional business pyramid “scheme”.
The best news however is that not all network marketing opportunities do this. Find one that really specializes in helping the little guy rather than trying to make them fail.
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