4 Faults in Network Marketing Plans
“Oh no! Not another network marketing business!”
Why do businesses which operate solely on the idea of rewarding those who share product information with friends and loved ones have such a bad wrap, when anyone in marketing agrees that word-of-mouth advertising is the most powerful advertising out there?
Well, those who have been in the industry over the last twenty years, including yours truly, have observed a trend that very well may be the cause, if not at least a major contributing factor, to this disgust.
I call it DEFAULT.
We’ve all experienced it. You get a program and fine tune it to your needs. What a joy it is. The sun is shining, the birds are singing. The blossoms are filling the air with fragrance. Then one day something happens and returns all your settings to DEFAULT. And there is no way to retrieve your former settings except by starting at the beginning again. Dark clouds gather. Hours are lost, appointments missed, decisions delayed, emotions run high, and many other things go wrong. All because of DEFAULT.
Nearly all businesses run on the pyramid plan—not just network marketing types. At the top is the CEO, the president, the great leader. He or she has a few trusted associates who help run the show. These operate at the second level of operation, and usually receive a slightly lower pay. They, in turn, have others who report to them. And on it goes until at the very bottom, and at the lowest pay scale, rests the largest group, the factory workers, laborers, cleaner-uppers. To get from the bottom to the top of the pyramid is very rare in conventional business. But everyone knows that this is just the way businesses are run.
Then network marketing comes along and changes the paradigm… so they say.
“We will show you a better way to do business, one where you don’t have to remain at the bottom all your life. You too can enjoy the lifestyle of the CEO, vacation when you want, travel where you want (and in style), have time with your family…” and on and on they croon. Then they draw circles and explain how it all works (on paper).
All goes well… for awhile. Then one dark, dreary day you realize your American Dream, with all the fine-tuned settings you have struggled so hard to make, has gone into DEFAULT. And you find yourself again on the bottom of the pyramid, just like in conventional businesses.
What people don’t know about most network marketing plans is that they are designed to DEFAULT to the conventional pyramid business style, with few at the top enjoying high incomes and those on the bottom groveling, trying to make the system work. This is done by various methods. We will mention only four. They may be called by different names, but I think you will recognize them.
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Jump-start: knowing that many will never get beyond their initial “buy-in”, they push you to “tell everyone” you can about the opportunity. This gives the company free advertising and some quick profits from the “introduction package” you just bought.
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Breakage: when you have to give up your “points” or “bonuses” because you didn’t meet some monthly goal. The company keeps the money.
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Break-away: when you “advance” to a higher level you leave behind some earning potential you had struggled hard to achieve. The company keeps the money.
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Exhaustion: by requiring constant enrolling of new people the company knows that eventually you will tire and give up. They know the average recruit will enroll only 2-3 people, so they keep the recruiting requirement high. The company now keeps what you worked so hard to build.
These are some of the mechanisms built into most of the network marketing programs out there. Their intent is to cause your business to DEFAULT to the conventional business pyramid.
But the good news is that not all network marketing opportunities do this! Look for those who specialize in helping the “little guy”, who don’t use the mechanisms mentioned above.
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