Multi-Level Marketing has a Problem

Multi-Level Marketing has a Problem

Multi-Level Marketing (MLM ) also known as network marketing or referral marketing is a marketing strategy that has been in existence for quite a good number of years. It is a marketing strategy whereby a marketer sells directly to consumers as well as encourage or persuade those consumers to join the marketing chain also known as “network”.

Multi-Level Marketing is a marketing strategy and it is based on the system of various levels of distributors and recruits forming a unique network of people who are hardworking and have accepted to work towards common goal. Multi-Level marketers are compensated for the sales generated through them and those generated through other salespeople that they recruit to their group. Most MLM require members to first purchase starter kits, while some of them impose members to purchase minimum monthly order value to maintain their membership.

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From studies carried out recently, it is estimated there are more than one thousand firms in the United States alone using Multi-Level marketing as a marketing strategy to get their products across to various consumers all around the world. This means Multi-Level marketing is a big business in itself.

Nevertheless, though MLM is a legal business, recently, it has been a subject of criticism. This is unconnected with the fact that people have come to understand the maths involved. Nowadays, at the mention of MLM, people think of Ponzi schemes or better known as pyramid schemes, which in most countries are forbidden by law. The business strategy is now believed to be controversial as the action of one recruit can affect significantly other members in that ladder of network.

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The history of original direct selling and how it helps multi-level marketing

Direct method of selling has been existing for so long. Going back to history, the very first direct sales business to consumers I know about was introduced by the Swedish founder of Electrolux, Axel Wenner-Green approximately 100 years ago. Even though he was not the inventor of the vacuum cleaner, he designed and constructed the first domestic vacuum cleaner. His vision was to help households to get cleaner and thereby maintain healthier homes, and as we have come to understand; a vacuum cleaner is a “must” in every single home.

The strategy was to get many vacuum cleaners out there and as fast as possible. This led him to making demonstrations in the customer’s home. From there, we can agree that the modern direct sales industry started.

The concept was successful, and I am pretty sure that some of you who are reading this, have even had a live experience from a demonstration by a skillful Electrolux vacuum cleaner sales representative.

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For many years, the cold canvassing method worked well resulting to an appreciative number of sales. This method involves knocking on the potential customer´s door, getting in, doing a demonstration and closing the sale. Every day, he would need to talk face-to-face with people and persuade them to buy vacuum cleaners. The more he did it, the more he would turn home owners to prospective buyers and increase sales.

However, with series of notable changes in the society, most especially in the way of life of the people therein, for example the higher level of crimes and frauds, it has become practically more difficult to just go out, knock on people’s doors and turn them to potential customers. But however, new strategies with pre-booked demonstrations over the phone, has been a reliable method to solve the changed habits in the market environment.

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By making the “original” direct sales method obsolete, the multi-level-marketing better known as MLM, started to get more air under its wings, and I believe it is not a simple coincidence that many previous successful direct sales representatives, now can be found as successful MLM leaders.

The truth is that, the skills and knowledge garnered from “genuine” direct sales undoubtedly helped a lot of business owners to develop sales in other areas such as the multi-level-marketing. There is no better sales academy than selling directly to various consumers in their various homes. Would you believe some 25 years ago, the most skillful and highest quoted sales people came from segments as encyclopedias, insurances and vacuum cleaners.

 

Is Multi-Level Marketing going the original direct selling way?

 

The question now is if the multi-level marketing is also going the original direct selling way or not. From experience, one can still say that the same way that the “genuine” or “original” direct selling had its lifecycle, at least in its original format. The logics also point that the multi-level-marketing will pass through the same lifecycle “drama”. I call it drama because it will be a troublesome process if the proper MLM system does not adapt itself to the new circumstances and business environment we are facing more frequently than ever, which due to a lot of reasons.

The exploding digital world is one very important reason.

As the main part of the society today, in one way or another is digitally connected, the speed of changes is much higher than before. While a digital marketer has access to almost one billion people daily, (for example using Facebook as a marketing media), the multi-level marketers, no matter the size of his network, will be a local guy in comparison with the Facebook marketer. Thinking about it, with these two completely different market potentials, it is easy to think that the multi-level-marketing business, which in fact has an important expansion factor in its business model to be successful, can run into a saturation mode.

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Multi-Level-Marketing Vs. Affiliate Marketing

 

The daily headache for a serious MLMer is how to add more people to his or her network. If the network does not add on more people, it will die sooner than later. One reason for this is the drop out rate that always will exist among the people in the network. These are people who do not perform but only occupy space in the network without producing anything or giving any added value to the network.

The other reason is the necessary organic growth of the network to be able to leverage the expected commission payouts to keep the members of the network happy. Could this be the reason why some MLMers sometimes claim that the market seems to get saturated?

The relationship or networking is extremely important for people searching for success in the multi-level-marketing. Not very seldom, you start to invite close friends and relatives to join the business, which can induce to other types of problems of more emotional nature. It is not a pleasant task to all the time ask family members, relatives and friends to join, to keep your MLM network growing, which is the way it must grow for success.

The digital marketer has a disposal of a non-limited audience.

Well, the world´s population having access to Internet is the limit. With the sophisticated marketing tools available today, it is very possible to make a segmentation of the market down to a very detailed specification. One example of that is that this blog post also will be published together with an advertisement campaign directed to people doing multi-level-marketing or who in some way have a strong interest in and connection to MLM.

 

Depending on the countries that will be chosen for the campaign, easily a couple of millions will be exposed to the ad. We don´t know who they are but we know where they are. We already have several successful MLMers in the Six Figure Mentors community. They have found this online marketing system being an interesting and potential complement to their multi-level-marketing business. In principal, both,

multi-level-marketers and digital marketers are working with the same basics,

which is a huge network. The whole business is based on the fact that the network is big and growing constantly.

As a MLMer you will find the tool within the Six Figure Mentors platform to limit or expand the target group you are interested in to whatever you want. If you prefer to stay local you can do that. If you would like to go regional, national or even global, you will also have that as an option.

As the markets develop and the digital world expands, it will not take long time before all multi-level marketing organizations understand the importance of building global MLM networks. It will be more the languages, cultures and habits setting the frontiers for the business and not the physical country borders.

In the same way that the “original” direct selling had to make changes and adapt to new market conditions, multi-level-marketing will have to do the same. Within very short time, everything is going faster nowadays, affiliate marketing for sure will be an indispensable marketing tool for successful MLM. The smart and successful MLM marketers jump up on the digital affiliate train now, and will be ahead of all other people in the industry when they will notice that it is a must to have their business go viral.

Are you getting sick of traditional downline building techniques? Click here and listen to Stuart Ross, the co-founder of the Six Figure Mentors, where he will reveal something very interesting about Multi-Level marketing. You will also get immediate access to the FREE 7-days video training where all will be explained to you in detail how it all works.

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