What P&G can learn from network marketing’s biggest mistake

As a fan of P&G and someone who’s been educating the Network Marketing industry for 17 years, my heart sank when I read about P&G’s latest marketing tactic – bribing women to use their friendships to sell soap.

Network Marketing (NM) has created an image of an industry whose people use and abuse their friends for personal gain. P&G has just created an army of 600,000 women who are using their friends in exchange for soap and coupons.

The NM recruiters’ pitch: Make money doing what you do everyday – recommending things to friends. Just go to people you know and talk up products like you always do. Only this time get paid for it. You do it everyday. This is the same thing.

Who wouldn’t want to make money doing something they do everyday?

But 95% drop out. Worse, thousands of reps in and out of the business talk about their new status as members of the NFL – No Friends Left. They’ve used them up. So now they have no money, and no more friends.

Here’s the big mistake:

NO NM company I know of teaches people to tell up front that they’re selling the product they’re talking up. (Because that would contradict the recruiting mantra that they’re getting paid to just do what they always do.) So when the other gal gets enthusiastic and wants to get the product too, the truth comes out: “Uh, I sell it.”

And right then the trust is broken.

“Ahh. So that’s why we had this chat and you said all those nice things about it…”

The next time, the friend doesn’t return the call.

Note: This reaction has nothing to do with the quality of the product. It’s having led the friend to believe they were just chatting the way friends do – using the transparent and trusted word of mouth channel – reserved for friends who speak with NO ulterior motive. See Wikpedia’s clear definition here.

P&G’s new tactic of bribing women to talk up products to their friends without telling could lead to the same erosion of trust among friends.

“We know that the most powerful form of marketing is an advocacy message from a trusted friend,” says Steve Knox, CEO of a P&G company doing this.

So they find the biggest talkers who, for a box of product and discount coupons, will chat up these products to friends, without disclosing a thing.

The tactic seems to be increasing sales significantly for P&G right now. But it may very well implode, and here’s why:

They conveniently leave it up to the bribed women to tell or not to tell. Those who don’t, and I expect that’s most because it changes the dynamic instantly, will have to deal with the fallout – the reactions of their friends who find out later that their recommendations were paid for.

If a friend of mine were talking up a product or program to me, and they were secretly bribed like this and didn’t tell me, and I found out later, it’s the last time I’d listen to them with an open heart and mind.

I do NOT mind people I know making money on me. I have helped them do it, by making sure they DID get paid for referrals that were worth money to me. But I want to know up front. So I can adjust my listening strategies. I don’t want to find out later, after I’ve already let my most vulnerable side respond to the (secretly paid for) recommendation of a then trusted friend.

P&G: Teach the women in these programs how to tell up front that they’re getting something from you to do this extra talking up of your products – they obviously weren’t doing it before (judging by the increase in sales.) You can accomplish much the same thing if you offer the language skill set to enable them to do that with their friends.

If you don’t, you risk getting the same image much of network marketing is stuck with right now:

P&G: the people who encourage their customers to use and abuse their friends for uh, well, in your case, a case of soap.