Transparency is the watchword everywhere in advertising. See here or here.
Because of the spin and lies of advertisers, only one question matters anymore:
Are we getting what we think we’re getting, based on what’s advertised on the outside of the “box”?
But, how much transparency can we really take?
You’re at your company convention. You look around at three thousand excited people in the room. Do you want to see a (secret) little sign over each of their heads with their monthly income? And what about the folks paraded across the stage? Them too?
(I say ‘secret’ little sign because I don’t know how many MLMers would come to a public event if they had to wear such a sign.)
What if the numbers you saw were like in last week’s big MLM company report in the UK (very typical in the U.S. too)?
1. Would you want to know?
2. Would such info discourage you? Or encourage you?
Results so far here.
NOTE: Commenters: We want to hear your ideas, not your ads. Please do not blatantly advertise your thing. A link to your site, only please. Thank you.
Kim and all,
I don’t care what others are earning but I do care if they are lying about what they are earning. Their earnings have no effect or statistical meaning to any other individual. Their lying does, it destroys industry credibility.
glennjaffas@prepaidlegal.com
This ‘Transparency’ question reminds me of the commercials in the media for certain drugs/medications. When I hear or read the list of ‘possible’ side effects, I have to wonder WHY people race to the doctor to get them. But even with the warnings, people still willingly take them, apparently hoping they won’t suffer too much.
Here’s an example of the possible side effects for the ‘sleep aid’ Ambien, which I copied directly from the site about the drug:
“an allergic reaction (difficulty breathing; closing of your throat; swelling of your lips, face, or tongue; hives); or
hallucinations, abnormal behavior, or severe confusion.
Other, less serious side effects may be more likely to occur: headache, drowsiness, dizziness, or clumsiness;
nausea, vomiting, diarrhea, or constipation;
depression;
muscle aches or pains;
vivid or abnormal dreams; or
amnesia (memory loss) after a dose.
A problem that may occur when sleep medicines are stopped is known as “rebound insomnia.” This means that a person may have more trouble sleeping the first few nights after the medicine is stopped than before starting the medicine. If you should experience rebound insomnia, do not get discouraged. This problem usually goes away on its own after 1 or 2 nights.”
To top it off, this drug is habit forming and can cause sleep walking/sleep driving! Yet people still take it.
Maybe this is why people would still support the network marketing industry, even if some of the negative info or statistics were ‘on the outside of the box’. Maybe it’s just human nature to think ‘it might not happen to me’.
Karen
I really agree with Glenn about the need for truth about what people are earning.
My first thought about whether I want to know what everyone is earning is that what someone else is doing really has no relevance to me. Two people can belong to the same company with the same products and get totally different results. One might work consistently and effectively, while the other doesn’t treat it like a business. Because one of the two didn’t get good results has nothing to do with the company or the products or the pay plan. Each of us has to take responsibility for our own success.
If we find that people in MLM actually aren’t living up to the hype and aren’t making as much as claimed, we still have a choice. We can be discouraged and think the model doesn’t work and quit; OR, we can know the model works and change the way we work. We can become determined to prove that it works, if you do the right things consistently and effectively.
That comes back full circle to living in truth.
JUDY MARSHALL
http://www.judyann.networkmarketingcentral.com
I believe we are all curious about what others in our industry are doing. I used to be in real estate and I wanted to know what others were doing there too!
There are always “heavy hitters” in any business. There are always quitters and losers as well. I know people who didn’t graduate high school. I also know at least one person who didn’t graduate high school and is earning over $500k in this business!
It is not what others are making that determines my success. It might point to a problem, such as I might be aligned with the wrong company or the wrong product. Knowing what others are doing in my particular business is is a good indicator of my ‘potential’. If a lot of people are making good money, then I have the potential. If no one is making any money, it’s time to pack my bags.
I don’t think I would be discouraged if I find out that hardly anyone is making money, I think I would head for the door!
The sad news is that there are a lot of companies that make an attempt to sell their products through NM and many of them don’t have the ‘right stuff’. Lot’s of new people entering NM for the first time, who also don’t have the right stuff, hook up with the wrong companies because of sensational advertising, hype and BS.
Is it really any wonder that so many people don’t make money in NM? But let’s not forget, every where there is a problem, there is an equal or greater opportunity.
I believe more every day that this business, Network Marketing, is about choosing a profession. Education is expensive, and once you learn some of the elementary trappings, you either quit, like most do, or you start making informed choices about the company or companies you represent and partner up with.
It just keeps getting better for those that work on themselves.
Interesting question.
I always review distributor earnings closely. The fact that only 3% make decent money isn’t a problem for me. It’s just a reminder that I need to do things differently than the 97%.
You know, I just met with a financial planner. He told me that only 3% of term life insurance policies are ever actually redeemed.
So why do people buy term life insurance? (It’s cheap.)
Is MLM perceived (or marketed) as the cheap way to make lots of money?
Maybe that’s why 97% don’t make it.
Walter Reade (from Wisconsin)
Glenn: Lying about earnings is one problem, yes. Quite a big one in our industry. But another kind of problem is the old “If I can do it you can do it,” line, where the story behind the story is kept back. How many people came into the business BECAUSE of the impression they got from the big meetings, that somehow all these people are making good or big money? I know I did.
If they knew the truth of the numbers, would they have come in?
Karen: Indeed, although that information is just recently being made public, and the numbers of people seeking alternative medicine are growing exponentially each year. I’m sure the reported side effects of drugs and the alternative medicine movement growth are related. Think?
Judy: Agreed. Only it’s not one in two, it’s more like 19 in 20 who aren’t making more than $100/year.
I know the model works, just not the way most companies and recruiters are teaching it.
Yes the money signs would be great; but what I really want to see is how much time, effort, and money they put into their business. What did they start with – an existing downline or truly from the bottom? How long have they been in their current business and the industry in general? How much money goes out each month to bring in their income?
More importantly, can they explain to me how to grow my business without the hype?
I don’t think it would matter. I have people on my team that can say with all honesty that they are making very little. However, those people are putting in very little effort. Would the fact that they make very little sway some people away? Probably.
I also have people on my team that are making a bit more. ($300 – $800/mo over and above their product purchases) Those people are putting in a bit more of an effort.
I also have people making a lot more (at least $800/mo over and above their product purchases) Those people are putting in a larger effort.
If you simply asked how much they are making without finding out what kind of effort they are putting in, you may have a lot of prospects running the other way.
It is up to each and every one of us to make sure that we do right by the people wanting to join our business and educate them. Making it mandatory to publish numbers will not solve the problem.
~Roxanne Green~
Kim, no argument from me regarding your reply to me, I agree. The last statement in your post is what I have never been able to understand. Why do even good companies and associates continue to do these things?
glennjaffas@prepaidlegal.com
Glenn: which “statement” are you referring to? You mean in my comment to you? Go ahead and quote it so everyone, including me, knows to what you refer, ok?
Carol: Indeed. If you picture the typical convention, newbies get the impression that everyone is doing great, they all “just love the business!” but in fact, almost no one is earning anything.
They may be new, they may spend part time or more, but the fact that they give off the impressions that everything is “wonderful, amazing!” gives new people the impression that everyone is doing great, i.e. making money.
Only they are not. It’s as if repeating the rhetoric will bring about success. Weird. People feign success even when they’re talking to prospects of someone else…
Kim: “I know the model works, just not the way most companies and recruiters are teaching it”.
WHY do they teach it, then???
(per your request for clarification of my post, that was what I was referencing)
glennjaffas@prepaidlegal.com
Glenn: OK you write:
Kim: “I know the model works, just not the way most companies and recruiters are teaching it”.
“G: WHY do they teach it, then???”
Because it makes quick, one time injections of money. A recruiter who sells the $2,000 package gets $200 (or more) and others upline $25-50 and the company a quick $1500 or so, assuming they’re not paying out everything in the pay plan because not enough people qualify. That is a big money source for companies – the lack of qualifying people resulting in them keeping most of the money new recruits put in.
Remember in most all pay plans, people have to qualify to earn anything, including paying in $100+ each month for product personally.
The $50-100 fast start bonuses plus a percent on the initial orders are what keep the recruiters going.
And the dropped out recruits who stay on as customers only, is who keeps the companies alive. 90% of MLM company income is from the customers, most of whom are dropped out recruits.
Round and round we go.
Kim, if I correctly follow what you are saying that poses a real challenge for us: If we all did things the new school way, which takes some time to learn and implement, companies would lose a ton of short term cash flow and have a hard time staying in business? (I am trying to see this from all sides. In a similar vein of thought to yours I have entertained the idea that the company I rep for would be better off if they tripled the cost of the service so they could trim the associate force to one third of what it is, ie get rid of 2/3 of the reps, the old school thinkers.
glennjaffas@prepaidlegal.com
Glenn:
If companies did some of the things they do now, the new school way, yep, the wrong people wouldn’t be sold the “here’s the fast way to get to the top package” which are of course the big ones – over $1,000, often 3-4 times that.
They’d sell lots more smaller packages for under $500.
The good side: Fewer people dropping out who are super upset after having spent a couple thousand dollars. Fewer people returning boatloads of product. Most people probably would keep a few hundred dollars worth of product they bought wholesale, if they loved it to begin with.
To make money faster, showing people who bought smaller product packages how to sell it so they order several times in their first month is a safer, more humane and smarter way to go. And the sponsor can still make pretty fast money those first 90 days.
Since most people are part time, smaller packages are also a better way to attract them.
Bottom line: if the recruiting craze changed, different kinds of people would be joining the business. From the reputation we have on the street, that might be a good thing.
Oh Boy this is a good one, huh?
Kim, what a mind picture, to walk into an international convention and see that sign above seven thousand heads. Wouldn’t it be even better when the presenter took the stage to tell us all why we aren’t making the $291.98 per month that he is? It’s already been suggested that we add the number of months they have been in the industry. So here is Johnnie JumpUp with 36 months in the business and earning $600 per month. Heck he ought to be swinging in a hammock on Tahiti in another year. Don’t cha think?
Remember the dated, but famous hype, “Walk away residual income”?
A while back, I read an interesting discussion about what a person could do with an extra $300 per month income over a decade if it was used wisely. Notice the word income. It isn’t $300 of income if you were required to spend $200 that month to be qualified to get it.
Maybe $300 per month would not be much of a magnet for recruits, but it is enough to stop bankruptcy for many. My hope and prayer is that the New School thinking will give rise to more companies that will offer a competitively priced product. Also that these new products would afford the distributor a chance to make a descent buck on a sale. More sales and repeat sales means more and more bucks. Throw in the power of internet marketing, and something could be swelling up here.
So if you were in fact having fun, making $300 extra income per month with your little direct selling, home based, business and not taking all week to do it; you could honestly ask, “Do you know anyone that would like to do what I am doing?” With a new recruit you could now add overrides to your retail profits. Nice.
So I don’t get in trouble again with Roxanne , I will answer the two questions directly. Would I want to know? Yes. I think that much transparency would be wonderful, because it would scare off those that shouldn’t be looking at our industry anyway. This would save us all a ton of time and resources. Would such information discourage me or encourage me? It wouldn’t discourage me, because I already have a grip on the reality of things out there in the world of Network Marketing. It would encourage me because it would reinforce my modest success and propel me onward with the knowledge that I ain’t doing so badly after all. Why does the marathon runner check over his shoulder now and then anyway?
Staying the course,
Tom Doiron
For many years I was with a UK company which is extremely open about earnings. It publishes Bulk Volume figures (ie value of all sales by people in your downline)for everyone, and the practice in virtually all lines of sponsorhship is to use your own personal monthly cheque as part of your promotional activity. So everyone has a pretty good idea of what others are earning.
I saw three effects.
Firstly, a reality check for new people. It is indeed transparent what can be earned for what amount of activity and what level of team development.
Secondly, the ability to compare with others turned out in practice to be a useful motivator for the competitive types, and a de-motivator for those who were easily discouraged.
Thirdly, there was still certain lack of transparency within the published figures. This is a company using catalogues delivered door to door to make sales; many people make a full time income ($3000 a month is not unusual)doing just this.
Such people will often only have the time/desire to build a very small downline (in my own team, the majority of such retailers never developed a stable downline.)
The difference between what I used to call “being a salesperson” money and network development income was rarely made clear, especially at the lower levels of income.
And the company colludes in this lack of clarity by “lumping together” personal sales figures with team overrides (plus slaes tax if applicable) to produce an overall monthly income figure for which they provide distributors with a printable cheque.
So, where the will is there to misrepresent, even the most transparent system can be massaged to present the best possible picture.
Kim, I’m ‘in’ having been your student for several yrs now. I hope we make some serious headway soon, because it seems as tho the bad multiplies faster than the good. Especially in smaller population towns the old school attitudes can ruin it for everyone and it is a real challenge to overcome.
All the best,
glennjaffas@prepaidlegal.com
When I was in college, I was introduced to Network Marketing.
At the weekly hotel meeting, they introduced the bigger pins at the end of the meeting. One of the pins was a couple who had gone Direct ($2,500 a month income)in just four months. They were also retired college professors who had credibility.
It was not until a few years later that I found out that they had bought most of the necessary volume in order to achieve the pin level of Direct.
I would have liked to have known the truth about their situation. Because I was led to believe that I could do the same thing, that I too could go Direct in six months or less, just like these retired college professors had done.
Paul Eilers
http://www.PurpleGreenPops.com
I would like to know what others are earning as long as I knew how long it took to get there.
Now I would not be discouraged like I would have been when I was an eager novice.
Robin
Just read a simple, and scathing, post elsewhere that applies here: “The reason that lotteries are legal and income claims are not legal is that lotteries don’t lie about the odds of winning while network marketers do”.
Just great. Lotteries have a better reputation than we do.
glennjaffas@prepaidlegal.com
The first company I joined published everyone’s earnings in our monthly leaders bulletin. No pulling the wool over anyone’s eyes. There was a minimum threshold that had to be reached which was pretty low and if you didn’t appear at all everyone knew you weren’t doing anything.
And the earnings couldn’t be padded by “recruiting packages” because there was no such thing in that company. Your income reflected your actual retail sales and overrides. Nothing else. Oh yeah, someone could look up your income via personal production or overrides.
In some ways it was a great motivational tool because there were lots of people making great money by network marketing standards and a tidy bunch making good money by any standard. And the last thing any of us wanted to hear was, “so and so, I didn’t see your name in the bulletin this month.” Now admittedly the culture of this company was different from your typical NM company, but nonetheless…
When I later moved to another company I remember how so many people were excited about a guy who was making $30,000 a month. He was a legend in the company. Hmmph, in the previous company I mentioned above $30,000 a month wouldn’t even get you a sniff at the company convention, because for the big hitters that wasn’t unusual, and it was easily verifiable.
At my current company they don’t publish incomes, but they do publish all other available data, and from that it is pretty easy to figure out who is doing something and who is just talking.
I vote for transparency, with the caveat that a person be allowed to opt it if he/she so desires. After all, there are many reasons *not* to reveal your income that have nothing to do with network marketing.
Michael
http://www.grmbeyond.com
http://www.uptownonthebay.biz