In the UK right now, one of the biggest network marketing companies is involved in a legal action for “selling a dream of unachievable wealth.” Don’t fall into this trap – it’s ALL in the words you use to recruit.
The story: Amoop in the UK. (fake company name)
The following earnings numbers have come to light, from the company’s own records according to the report, and were printed in the London Financial Times today.
“Countdown
39,000
agents working for MLM company Amoop (fake name)27,000
(71%) had no income11,410
(30%) earned something7,492
(of the 11,410) received average of £13.53 per year (= $28.04)101
agents received 75 per cent of bonuses£116K (=$240,464)
paid to top earner Teensie Lopaat (fake name)26
number of years Mr Lopaat was an agentSource: Evidence at company’s court hearing” -London Financial Times, David Brown, “Marketing group merely selling a dream” 11/27/07
(No link provided giving name of this company, in keeping with my new role of “old-guru in new-startup”)
And why do do many people care about this? Only three reasons:
1) MLM/NM recruiters sell something everyone wants, the dream of financial independence.
2) Almost no one achieves it.
3) Everyone else signed up goes along, pretending everything’s hunky-dorey, repeating the income claims. See here. Worst, many go on, believing it’s THEIR fault.
People – PLEASE LEARN FROM THIS. It’s no different in the U.S. Respect your business – don’t make it look like a piece of cake that anyone can do. It isn’t. All that does is attract more of the wrong ones, making these numbers worse and worse.
P.S. Yes, the failure numbers are similar in other businesses. But none blare to all that it is “easy and anyone can do it!” like our recruiters do. Even people making zip repeat that nonsense. Stop already, please, with the ridiculous promises.
Yes, the hyped income claims are a problem.
But I think there’s a bigger problem.
If the only people buying your product are people who are in the business, you are in a pyramid.
If you can’t find 10 customers for your product, can you ethically tell people it’s a great opportunity?
If you can’t make money just with customers, can you really say you have a business?
Walter Reade (from Wisconsin)
Walter: Amen.
And all we hear from the recruiter types is, “theres no money in customers. The money’s in the recruiting.”
Right. More accurate slogan? “The drop-out is in the recruiting (but you make that sign-up bonus first, so that helps.)”
Hi Kim,
This kind of stuff is what nearly prompted me to leave our industry permanently. Then I found you!
Seriously, I can’t sell something that I can’t believe in. Even though there are some making the big bucks, they are not just “anybody”. Some that I have met are so obsessed with their business that they alienate everyone. No one likes to talk about it, but when someone’s life becomes so extremely out of balance it usually will cost them their marriage if the spouse isn’t equally committed to their business.
Here is a challenge to the community: How many serious earners (for real) in NWM do you know that are happily married and their spouse has nothing to do with their business?
Covetousness and fantasy is what this dream selling promotes.
I love what Walter shared. If you can’t even find 10 people that will buy your product on its own merits, what have you got?
I really feel at home here at NWC.
Thanks Kim for rescuing a good thing.
Both feet on the ground,
Tom Doiron
Business models drive the behavior in the field. We (Mentoring For Free) have been trying to get this point across to people for a long time.
There are a lot of companies out there that don’t pay you to retail your products or they charge such exhorbitant retail prices that you can’t sell your products. You have to sign up as a distributor, thus driving the behavior of recruit, recruit, recruit.
These companies aren’t going to change. They are set up that way and that’s what works for the company.
Most MLM companies put the profits back into things like bigger offices, private jets for the owners, and other “status symbol” type things.
If no one ever pays the retail price anyway, why bother having one? Let everyone pay the same low price and don’t make them sign up as a rep to get the “good prices”.
The good news is that more and more companies are realizing the power of a customer. There are a few now that will allow customers to be customers and get a price that’s halfway between the rep price and the retail.
Business models will always drive the behavior in the field, just like comp plans drive the behavior in the field.
~Roxanne Green~
I couldn’t agree more. I hear more often than not from smart business minded people that they don’t care about hearing the hyped up stories. This is normally after they have “interviewed” a few other dealers who gave them that kind of pitch. Even if it is true, it is a turn off to many people and they seek a different sponsor. Just the other night someone contacted me asking questions about our compensation plan and the way they worded it, it seemed like they expected quick money for nothing. I clarified that there is real work involved and that much of what is being touted is a big myth. Regarding customers vs. recruiting, of course I do both, but I welcome customers every day of the week. Customers who like your product are very loyal and will keep using the product if they feel they are getting a great value for something that works for them.
I certainly agree about this and any other hype related to MLM. At the same time, I believe it’s important to recognize that the responsibility for these statistics lies squarely with the Representatives who are not earning. Why is their income so pathetic? Are they working their businesses? How many are making a serious effort to approach their MLM business like it is a serious money making endeavor? If it was a dream of wealth that brought them into their network marketing company, did they truly believe that all they had to do was sign up and it would just happen? Those of us who stay with our businesses know that most who join us just don’t do much and of course they don’t earn much either. Am I wrong about this?
Am I glad I didn’t sign up. I would wind up having to throw home parties by inviting friends and relatives, make a list of friends, duplicate a system that has a 95% failure rate, buy books and tapes in which the top guys in this company make more than selling the product and I can rant on and on and on.
I’ve said enough about this company. Sorry but I gotta go to the restroom.
Sidney
I go to the restroom first…
http://www.e-dental-plus.com
Hi Ann: You wrote:
“If it was a dream of wealth that brought them into their network marketing company, did they truly believe that all they had to do was sign up and it would just happen?”
I’m afraid so. Why? Because THAT IS WHAT THEY WERE SOLD. Why do people do the lottery? Or go to the casinos? They’re hoping for a quick score, a quick win. That’s human nature.
I am afraid the “easy anyone can do it, earn big money/financial freedom here, step right up and get rich, etc.” has come back to bite the entire industry in the butt, BIG TIME.
What recruiting slogans and recruiting meetings have you been to, for any company, where they tell you what it REALLY takes to make a dream a reality? Years of effort and practice and study?
They don’t because then way fewer people will sign up. Think of all the initial orders and sign-up bonuses they wouldn’t get.
It’s only after luring them in with “it’s easy, anyone can get rich with our proven system” that those same people start turning on and blaming the new recruits, who are just beginning to realize they fell into the “easy, anyone can do it” trap.
Aren’t we doing this to ourselves?
By the way we bait people who have no business being in a business that takes so much time and effort? All of which is carefully kept back in those initial recruiting meetings and talks with upline?
And then gets dumped on them after they’ve laid out that initial money to get started?
Arghghgh.
Last month I had a lady call me about marketing my healthy pet food. She read the hype on other websites about how easy it was, everyone could do it and it was easy to make money by sharing with your friends. She contacted a few people before calling me. After a few minutes of talking she said she wanted to replace her real estate income in one year. Can I do that with this business, she asked. I was honest and said no she couldn’t expect this to happen in that length of time with any network marketing company. We talked more about how the money is made, the time line, the effort, the money she would need to market the food, etc. The last thing she asked was “Would it be ok if I called you with more questions about this business?” Was I crushed because she didn’t join, no I was relieved that at the end of our conversation she knew the truth. I would not have let her sign up with me with her needs. It wasn’t a fit for her or me.
For several reasons I’ve recently added a product/Company to my network marketing. I took what I’ve learned from the readers of this blog and members of NMC before taking on this other company and product. I joined because of the people first, then the product and finally the money. So that shows people, (I) don’t get caught up in hype about making a lot of money fast, the hype doesn’t work except to get companies in trouble.
Here are the things I looked into before joining this company: (not in order)
Cost for retail customers – price breaks for quantity, standing order options, wholesale, and rep price.
Company values (real values, not a written company statement)
Leadership qualities in upline (real experience with network marketing)
Product that I love (I was a product user before a rep)
Marketing methods available, help using different ROM’s
Pay plan for retail customers and building team
The list goes on but you get the idea. I looked for a company where I could earn money from customers. If I never recruit anyone I’ll still make money so I’m not even tempted to push the business. I’m not in a hurry to recruit but if the right person comes up I’ll be honest, just like I was with the lady wanting to replace her income in one year.
Both companies I’m with are still small with values that fit well with my own. The company profits don’t go for fancy offices, or luxury items for the owners. The only reason I got off base from the original post was because of the reference Roxanne made to what many companies are doing or not doing for the customer and where the money is going.
Now let’s go get 10 more customers.
I’m impressed with the response to the lady who asked whether she could replace her income in one year, since I have never heard anyone in mlm say such (no). My upline even told a recruit of mine that she could do so in a month or so, to my dismay.
I’ve been involved in the industry for about a decade and am fortunate to have a reliable residual income, however had quit the marketing scene for all of the reasons you describe, so much hype and bs.
I learn so much here and have renewed hope due to all of you. This is the first time I’ve posted, but I will be back. Best to all.
If you go to MerchantsOfDeception.com, the larger story of this kind of deceipt can be found. I know the company you are talking about, and they are not in integrity. The founder is worth 3.6 BILLION dollars. They make it bad for all of us. Why not identify who they are?????
Kim,
I’m perplexed as to
why you are not mentioning
the company if they
have already been exposed
in the papers? Just curious..
Yves Marie Danie Baptiste
MLMOnlineMagazine
Rebekah and Yves:
If you Google the newspaper I mentioned, you will find the company name.
Since I am now part owner of a new start-up network marketing company, I’ve decided not to name names of companies with bad press anymore, so as not to appear that the reason is to further my own company. Some readers were worried about that.
The lessons are the same. But you can find out be going directly to the source I mentioned.
OK
In my opinion, part of the reason “recruiters” resort to those misleading tactics is because of the ingrained mentality in network marketers to seal the “deal” quickly before the prospect changes his/her mind.
I myself suffered from this “rushing to the end line” syndrome (happy to report that I have since been cured) where you feel the pressure to get that person in right now, on the first date, while they’re still hot. Get them to Sign on the dotted line -right this minute!!! otherwise we might lose them.
So how else are you going to convince someone in 20 minutes or less to buy into a business unless you make it sound like the “opportunity of the century”?
At the root, it’s a matter of confidence. If we had enough confidence in the Return on Investment, then we wouldn’t feel the need to chase prospects or make empty promises.
Maybe I’m wrong on this but I think that such confidence can only be possessed if we have a simple and duplicatable system that “guarantees” everyone’s success (provided they’d put the time, energy, money and developed the necessary skills)
Then perhaps we could put some real entry barriers to Network Marketing and “force” prospects through a qualification process.
That’s what it would take to restore the image of the Industry
Carmina
Speaking of selling the dream, I received this email from a contact yesterday —
I am involved in a network marketing company and I am exploding . . . this is sooo easy. It is a binary system. The timing couldn’t be better and it does not conflict with anything that you are already involved in. I have recruited over 125 people in the last three weeks.
How much you want to bet most of those 125 people are down one leg?
Walter Reade (from Wisconsin)
Walter – How much also do you want to bet the person probably got most of those people from her upline, and she has zip in the other leg? Email her and ask, come back and tell…hehe.
Rebecca and All –
Just to set the record straight concerning Merchants of Deception. The author confessed he lied in portions of the book (see http://www.mlmwatchdog.com/mlm-amway.html)
It was still a facinating read on the horrors of Old School (of which I’m sure some of his story was real).
Walter, that reminds me of the emails I am getting about this new company. The sender writes “Most people who have known me over the years know that I almost never do 2 programs at one time since I like to stay focused on one! I know how we all have heard this saying before: “Once In A Lifetime Opportunity”! I know we ALL have heard this unlimited times as I have too! But, let’s say you look very close and try and find ANY holes in this program and can’t!!! What then? Let’s say this rolls out as a REAL Long Term Powerful Opportunity as I believe it to be! Is there a good chance we who do see it and go for it will be rich? Think about it…”
In checking the youtube video the speaker talks about a patented compensation plan. Now that is hype – it makes it sound that because the plan is ‘patented’ it is somehow superior than any others ‘out there’.
Sheesh.
I don’t know what is happening with this new blogging response system, so I will add my web site here. Not sure if it showed up at all on my previous message.
http://www.mannagold.com
Wanted to comment on Amoop specifically. They do “not” have a viable income plan!
No one is going to tell you what they make, we must learn to do the research on the company and comp plan to see what the true potential for real income will be.
Due dilligence is key and that is extremely hard to know “how” to do that if you haven’t been taught.
Brenda Bunney
http://MLMSuccessBunney.com
brendab@brightok.net