Why do MLM consultants use income testimonials to sell you their programs if –
those earning are really “not typical” and “not representative” and, if the guys selling the programs tell you (on a separate page), that they “have no idea how well you will do?”
I just visited another new community website for network marketers. It’s designed, they explain, to help you build your business. To encourage members to buy the programs of the site owner(s), they post the typical income testimonials from people who have “achieved financial independence when all else has failed.”
On the bottom of each website page I scanned, there was a big notice: “Earnings and Income Disclaimers”
Now, I do not take issue with the veracity of the testimonials. I don’t know if they’re true or not.
My question is this: Why use income testimonials (including attained ‘financial freedom’) to sell others, if those stories are really “not typical” and “not representative” and if the sellers of the business programs “have no idea how well you will do?”
That’s what they have posted separately on all the ‘Earnings Disclaimer’ page links on each page.
Am I off base here? Your take?
Why?
Because enough people are sufficiently impressed by the headline stats to think they’ll do that level themselves and will hence loosen their purse strings
All just a part of using hype to sell hope. 😉
Kim and all,
If the average person doesn’t make the above average money but could if they put in the above average effort required, that does not make bragging about the money potential wrong. The potential IS there. It is lowclass but not unethical to brag on income. While good people don’t respond well to the bragging, people who are ready to go do want to know what the potential truly is for exceptional performance, yes?
glennjaffas@prepaidlegal.com
You’re right on traget Kim with your observation.
Income statistics is certainly a hot button in the industry. However, most people are interested in the income. That “Show Me The Money” attitude. If I went to buy a MacDonald’s franchise I’d want to know what my potential return on investment for my $1 million dollars (or more) has. And MacDonald’s will show you the figures. And as successful as MacDonalds is that would not guarantee me that I would make money. MacDonalds franshises have gone out of business.
NWM is no different. I always get a kick out of the mass of business opportunity leads where a person fills out a survey and they say they have $100 to $300 to start their business and they want to make $5000/month. I’m still looking for that opportunity as well LOL. As for the disclaimer it is required by law. I think it can help both the recruiter and the recruitee if they take the disclaimer seriously. Unfortunately many do not.
That’s just my opinion I may be wrong.
Simple really: In depth analysis has shown that those making such claims are men (or women with beards).
I am personally turned off by income statements. The MLM I represent has been given a black eye due to the income statements from a small number of over zealous reps who chose to over state their income.
In fact, my sponsor has moved on to another opportunity and is quoting income from other reps. These numbers are so high, that if they were real they are still unbelievable. I have decided to stay put with my current company and market products that have been a benefit to me and concentrate on helping others.
David Fritz
davidfritz@myibocs.com
Kim,
This grows old. Of course this is about possibilities. I use only the published, verfiable statements of the company, and HIGHLIGHT and DRIVE HOME the fact that 90%+ of all participants do not make enough to be even considered in the income averages. I point out that these are VERY happy wholesale customers, and they are the basis for residual income for those that choose to do more. I emphasize that the incomes listed are possible, not guaranteed.
Fogg is on point again. You make an issue where there is none. This is not hype. The proposition to the prospect is simple. Do you know of any other way you could make $10,000 per month? Do you realize how brilliant network marketing really is? Do you understand how this levels the field and rewards you in direct porportion to your efforts? Do you know what other business franchises cost? Could you possibly become free, with all possible promotions over the next three decades at your JOB?
It is a simple proposition: Do you want this? Do you want to serve so many others so magnificently that you will be rewarded to the tune of seven figures per year?
It is POSSIBLE, and here is the EVIDENCE. Whether or not it becomes your reality is entirely up to you.
Responding to the keith comment…
>serve so many others so magnificently…?
Sheesh – who drank the kool aid?
NM is a sales business. You get paid for selling – not sharing, helping, recommending, serving or anything else.
Retail. Recruit. Retail. Recruit. Retail. Recruit…
Thanks all…
Keith…it may sound “old” to you, but income claims are one of the number one reasons companies get in trouble with the regulators. It’s not “old” to anyone taken in, thinking it’ll be easy for them based on these testimonials.
I don’t think the principles of income claiming are any different for MLM consultants. If the income they put out there for a few is really not likely to be attained by others, (which they acknowledge in the usual bottom-of-the-page links and footnotes), why put them front and center to lure unsuspecting people to buy these programs to begin with?
We end up with more unhappy people, this time with our industry consultants. Do we need still more of this kind of bad karma?
Interesting article Kim,
I don’t believe highlighting massive income potential in headlines is bad practice. But I do believe that as an individual interested in investing my money in a business venture, I need to do my due dilligence.
Personally,I would not respond to an ad that didn’t show serious income potential but what I would do is to investigate the program.
Most of the programs out there do not offer a real product that offers real value or the compensation structures do not reward the average guy.
But there are valid programs out there, where with some effort the average person can make about $500 a month and where it is also possible for those who have the skills, abilty and existing network of contacts to make significant incomes.
So if it’s possible to earn big money, then I don’t see anything wrong with advertising to attract potential leaders.
Statements that irritate me in adverts are statements like ‘anybody can do it’ or ‘ the product sells itself’. Now these statements I find insulting.
But telling me how others have made significant income with a business veture does not seem wrong to me.
DJ Sobanjo
http://www.lead2excel.co.uk
But Kim you must admit, there is truth in that the potential is threre. Keith pointed out exactly what I say to my customers “This is how I did. How you do is up to you. If you won’t pick up the phone, you won’t do as well. If you don’t buy leads, you probably won’t do as well. You have to be hungry, I can’t do it for you.”
Jen Thon
http://www.Travel4Dollars.info
it is funny how NWM get a ‘black eye’ for income ‘testimonials’ and colleges don’t.
go to a colleges career consulor and they tell u this field earns xyz and that field earns lmn.
which is to say you will or wil not. also they don’t tell how many finish a degree only to be in an other field with in 5 yrs.
all earnings are dependant on ur actions and backbone not much more.
For me, it’s not what they say but how they say it. The hype. The continued emphasis on it.
And when you ask them how do you make the money, they get amnesia.
http://www.UptownNaturalsNutrition.com
And not only do they put an emphasis on the big income, but they show the videos of the expensive cars, large mansions, exotic vacations, and more.
http://www.UptownNaturalsNutrition.com
Thanks all – I guess my question is still the same:
Why use income testimonials (including attained ‘financial freedom’) to sell others, if those stories are really “not typical” and “not representative” and if the sellers of the business programs “have no idea how well you will do?”
One option: What if we stop telling everyone how easy it is to make money – I mean by making it appear as though “anyone can do this”? Obviously, they don’t. A 95% drop out rate tells us that.
If we’re leading with the big, atypical money, why not ALSO lead by asking for someone who is “not typical” and “not representative of the masses” – so the readers know who might to make the money being advertised?
Like Seth Godin harps, we need to be remarkable – worth remarking upon – to succeed today. Why not ask that of the same people to whom we advertise the big, or easy money?
Think?
Kim said, “I guess my question is still the same: Why use income testimonials (including attained ‘financial freedom’) to sell others…”
I’m thinking because it can be human nature to brag or even come up with stuff so we can get what it is we want.
People do stuff like that all the time and the majority aren’t even in NM. Take the husband and wife, honey, if you do this it will get you that.
Or, when you want to hear a “yes” rather than “no” generally people are going to say something they wouldn’t normally say if they first suspected the person would say “yes”.
When we have expectations of others responses we approach the situation differently than we would if we knew there would be a pretty good likelihod the person would go along with us.
I think a part of it may be conditioning. We are conditioned that a large percentage of the population is going to say “no” to the business op. This is of course neglecting the reasons “why” people began saying “no” in the first place.
So what’s the next logical response??? Say things you think the majority of the population won’t say “no” to. Perhaps this is how things went astray???
Kim continues, “…if those stories are really ‘not typical’ and ‘not representative’ and if the sellers of the business programs ‘have no idea how well you will do?”
Well, if you get enough people to buy in to your business then you could be the person whom others later on use in the success stories, you’re the “legend”. I think it’s called “having hope” (I’m being kind : ) ) – or “desperation” (for that 95% who hasn’t yet realized they won’t kit it big because they don’t have what it takes) – it seems somewhat borderline delusional if you ask me.
When I see numbers being flashed around my first thought is, “yeah well… how much money, time and energy (in expenses) did it take them to get there?” (That’s of course assuming it’s true.)
Then, my second question is… “is that gross or net?”
A lesson from my horse race gambling days (yes, I used to make a living doing that and do not recommend it to the masses!)…
…”ok so you won today, but how much money did you spend to walk out a winner?”
I am so glad I found you. You have just reconfirmed for me that I am headed down the right track with my NetWork Marketing.
The company I am with (can I say who?) just posted the following income disclosure statement on their web site for us:
Over the past several months, we have compiled the data necessary to create the (Company’s Name) Income Disclosure Statement, which provides high, low, and average weekly income information, as well as annualized averages, for the various ranks within the (Company’s Name) Compensation Plan.
Is this the answer to what you are talking about. I am very proud of the integrity of this company, but would like your input.
Thanks
Carol
My company, Immunotec, always publishes an Income Disclosure Statement and advises distributors to make this available to new recruits. Here is what Immunotec has to say on the subject:
“Immunotec is committed to protecting the income opportunity of its distributors. The use of an income disclosure statement is an important way of doing just that, by satisfying the requirement of regulatory agencies to protect the consumer from exaggerated claims of income potential.
Direct selling companies may publish flyers, articles, and other printed media, and produce audio and video presentations containing income claims, provided that they publish a disclosure statement. Further, distributors may make income testimonials, so long as the company provides the income disclosure chart. These charts should be made available at Immunotec meetings to anyone requesting the information. Proper use of the income disclosure statement gives you the freedom to make legitimate claims … and to grow your Immunotec business.”
Then, at the bottom of the actual income disclosure statement for 2006 it says:
“The earnings of the Distributors in this chart are not necessarily representative of the income, if any, that an Immunotec Distributor can or will earn through his or her
participation in the Immunotec Compensation Plan. These figures should not be considered as guarantees or projections of your actual earnings or profits. Any representation or guarantee of earnings would be misleading. Success with Immunotec results only from successful sales efforts, which require hard work, diligence and leadership. Your
success will depend upon how effectively you exercise these qualities.”
I’ve been with this company for over 4 years and know that they do not, as a rule, use inflated claims about income. Once in a while an over zealous distributor will trumpet their earnings at a function, but the company itself does not use this as a tactic to attract new distributors. Nowhere on the replicating website are there any claims about earnings.
And speaking for myself, I never, ever give anyone the impression that it is easy to make a decent income doing this business. Patience and persistence are needed in full measure, as we all know. I am grateful that I am making a decent commission check, and I look forward to increasing the amount over time.
If any of my fellow network marketers reading Kim’s blog know someone that is looking for an upstanding network marketing company to join, please feel free to give them my contact info! I would LOVE to have some ‘new schoolers’ in my organization!
Karen O’Handley
http://www.pioneeringhealth.com
karenohandley@cox.net
(760) 940-9022
I don’t mind the income testimonials (so long as they are real)..and I appreciate the disclaimer even though for some it’s added only to be ‘compliant’.
After all, nearly every business entity tends to share their BEST stories i.e. commericals, infomercials, magazines etc.
What I DON’T LIKE is:
A. Not sharing the ‘story behind the story’ cuz 99.9% of the time there is ALWAYS a ‘story behind the story’ if the income is produced ‘quickly’.
B. The PERFECT geometric progression that is always outlined in the ‘plan’….
Life is NOT perfect and the 80/20 rule (if that) is alive and well in MLM and I would venture to say more like 90/10 if that. It really gets on my nerves when I see the PERFECT 2 who get 2 scenario regardless of the ‘disclaimer’.
C. The verbiage about being ‘easy’ and ‘anyone’ can do when ADDED to the large income claims.
Granted, we can’t play God as far as knowing someone’s potential so allowing them to understand the income potential is important BUT.. BACK IT UP with some facts on HOW the income was created (the story). For the right person, the story won’t scare them away anyway.
I learned a long time ago that it’s better to AVOID a mess NOW verses cleaning up a mess down the road!
As always, my .02
I think income statements are used because there is no way to quantify what a person can do, based on who they are this red hot minute. There are likelihood’s – if a person has succeeded in something else, they might be more likely to succeed in mlm.
But then there are the people who have never been good at much of anything who make it big in mlm. There are those who have never done any selling of anything who do really well. So maybe the income claims are there with disclaimers because…both are true?
One thing I am sure of is that if you say I started this great new business, but I will probably fail because 95% do, which means if you join me, most likely you will, too…well that would be true, but how far would it get you?
And as for the ones who settle in as customers, they started out wanting income, too (most) so though what Keith wrote about them now being satisfied customers is true, to me it doesn’t solve the problem, because they wanted income too. It is a bit sad really, when you think about it.
Which is why your work resonates with me, Kim. Why not go for the customers FIRST, and let the business builders surface on their own? Maybe there is a fear that then there would be fewer customers, because the ones who settle-in after involving themselves for the $$ would not be there? Who knows since no has been doing it long-term yet…
Great question, Kim…
Tracy
About Me
My Business Blog
I think you’re right on Kim.
They use them because they don’t know
any better and it’s been done to
them too so it mus work they think.
In addition to that if you bring
that up, like I did, they’ll say:
“YOu’re focusing on the negative.
Do you want to be successful or fail?” (use hyped up unnatural voice)
THen they compare themselves with
Google and Microsoft, like it’s
better to be in at the ground floor, even when that company has
been in business for 32 years…
But people who bought google,
ebay and microsoft didn’t ahve
to work they could have been
lucky (and most were)
anyway, I’m a disciple of
your No-Hype approach kim.
YVes
http://www.NoPainMoGain.com
Yes Kim, in my very early days-1976-I used to use this approach but invariably found an immediate question of…”well, if this biz op is so great, how are you doing and how much have you made/are you making?”
I really appreciated the response of the franchise example of a McDonald’s or other well known franchise not guaranting any income level, in fact all you are guaranteed is that your start-up costs will put you heavily into debt.
As soon as I read this, the first thing that came to mind is that weight loss companies use this same tactic. To my knowledge, they all do it. They advertise with drastic results and then use a disclaimer that the results are not typical. There’s my 2 cents.
I am not saying this is right, but just thought it was an interesting comparison as far as marketing goes.
Income statements have never done anything for me. I didn’t see one when I joined my first company and in 14 years, have never asked anyone upline from me what they are making.
Nor have I ever “flashed a check.”
I didn’t need anyone to show me a cehck to see the value in rolling up my sleeves and going to work in a Network Marketing business. I understood that it wasn’t going to happen overnight, and that understanding probably was due to the fact that I entered into Network Marketing by taking a business approach.
I sought out material to study and read. I wanted to master the business skills of building the business and that ultimately led me to the relationship skills.
That’s where I have spent all of my time ever since.
Keep your flashy cars, hoomes, vacations and the like. Give me credit for being able to figure out a viable opportunity without the flash and hype.
I would sign up ten times over with someone who looked me in the eyes, explained what it was going to take, both the good and the bad, and committed to work beside me. The person who flashes the check won’t sign me up.
And, as was stated above, funny how when you say “Okay, I see the money, now show me the way to get there.”
That’s when the “oh it’s easy, just talk to your friends and family.” Or, “You only need a few people.” lines show up.
The reality of finding those few people really means sorting through hundreds and thousands in most cases.
For me, the big money, free time of MLM is appealing enough that I am willing to sort through those numbers. But, I better know it going in!
EXPECT Success!
Jackie Ulmer
Six Figure WAHM MLM Training BLOG