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Friday, 19 November 2010

MLM: A Psychological Study

 

A few months ago, a client came to me wanting to tell me about a great business opportunity that was just going to make me so much money. He was sure it would make me $20,000 per month. Well, sure, I'd like that. I emailed him asking him to tell me more. He started sending me to websites that had videos. All the videos were REALLY long, and revolved mostly around three things:

  1. You're not spending enough time with your kids. You're not getting the things you really want... that vacation, those nice things, some time on a yacht. This is to prime your desire, and get you motivated to jump on what they offer as the solution to fill that desire.
  2. Questions and statements that challenged me to be "good enough" to be part of this.
  3. How I get paid for levels and levels of people. If you know MLM, you know the more people you bring in, and especially when you bring in people who sell the product, you get cuts of it. Whatever! 

But let's back up and look at #2. I think I have now watched close to an HOUR of videos this guy's MLM company has produced to try to get people into this idea. Here are some great phrases from the most recent video he sent me:

  • "This is not for everyone. Some people can't really grasp the idea of freedom... of owning their own time." Puts you on the defensive. Of course you understand freedom and the value of your time! You wish everyone else did! You are fired up.
  • "[Some people can't really grasp the idea of] being free from the stresses and frustrations of ordinary people." Well, you are special. You do NOT want to be lumped in with ordinary people! You are extraordinary! No, she is NOT talking about you! Fired up.
  • "Other people simply aren't willing to take action, to take responsibility, and to take steps to get what they say they really want." Hey, don't say that about me! I take action. I follow through. I work REALLY hard! I WILL take steps to get what I want! Fired up.
  • "You are here because you're ready for a change. You're sick and tired of wanting and not getting." This is the "we understand you are different and better" part. Yes, I'm ready for a change... I want so much I'm not getting. This is the "we feel your pain" part to make you feel connected to what they are about to say.
  • And let's not forget the images in the videos and on the web pages... the yachts, the vacations and landscapes, the nice cars, the huge houses, the happy families. Those are all chosen very deliberately to make you think you can have this because other people have it, and you deserve to have it too! Well, you DO deserve to have it, but the road to that is not through this MLM system.

I had over a dozen emails with this client plus a phone call because I couldn't tell what this business was. What am I selling? What is this product that is so amazing that I'm going to make all this money? He kept telling me that the product was the business opportunity. That doesn't make total sense to me. I am an entrepreneur, and I live in a world where a product or service has to be for sale.

I finally had to talk to the top of the pyramid, who explained to me that it was a travel concierge service. That's what is for sale. In this economy? Really? When we're all booking with Kayak and Orbitz, you think there is a lot of people who would pay $$$$ for a travel concierge service? I thought the people with that much spare money already HAD one... it's called a travel agent.

I ran an informal poll of my Facebook friends. None of them would buy it. That's what I thought. And don't forget you're going to pay monthly to be part of this pyramid. But I noticed that both my client and the top cheese made me feel like there was something wrong with me for not seeing what an amazing opportunity this was. They told me they had NO problem signing many people up every day for this, and they were raking in money like mad. Everybody involved in it was raking in money, and I seem like I'd be smart enough to get this, but I'm just going to miss out. That was the message.

They just contacted me again to show me their next product. It was hard to figure out what this product was, but it seems to be some sort of training kit (like CDs, books, I'm not totally sure) that was going to teach you to run an online business. You would learn things like time management, information mining, running online ads, etc... So their target audience is that really smart person with sharp business skills... who needs this course?

The bottom line is this. Some MLM systems have nice products that people like, and the focus is not as much on the pyramid. I have bought Arbonne products and liked them. I never felt like I had to or wanted to join the pyramid. Many MLM systems play on fears... fears about money, not giving your family enough love, not giving your family enough PERIOD, not having those nice things other people have right now.

The video I just watched had MINUTES about how the economy is so much better than people say. After all, drive by a shopping centre! Cars are parked there! People are walking out with bags. They are spending money. Cruise lines are building new ships because people are spending money on "luxuries" like vacations. This is just more stuff to make you feel like you are not giving your family enough. You just may not have money to spend like everybody else. You'd better fix that, and these people have that fix.

Do not listen to the fear-based crap. Do not fall for all the information that will make you feel like the loser in the wolf pack. Or like you aren't keeping up with the Joneses. When you hear a video challenge if you are really "able" to grasp this, or are you really ready to make things happen for yourself, or something like that, know that they are playing with you. This is a game, and the guys at the top are typically the only winners.

It's a mind game, period. These video scripts and LONG web pages are specifically written to play into your fears and desires. Don't fall for it. No matter what the "opportunity" looks like. Don't fall for it. It's a gamble. Most gambles are NOT worth it.

Let's just think for ourselves for a moment. I know many people who try and use these MLM systems. I know some who are involved in a few at a time. If they are THAT lucrative, wouldn't you need to only do one? And wouldn't you need to do very little work because it's just going to make money for you, once you get it going? How many of us know people using MLM systems? And how many of us know those people to be RICH? Totally financially independent? With all that free time to hop from vacation to vacation, just like the video said? I know zero of these people. How many do you know?

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Comments

Exactly! I know 3 people who have been involved with MLM "opportunities". The first one was still living with his parents while claiming what great success he was having. Another was a divorcee who is now at retirement age with no assets whatsoever. The third is another retirement-age person who is bankrupt because she didn't have the sense to wind down her previous business when it started losing money. If there are any winners with these schemes, I haven't met them.

You know, a few weeks ago, I saw a bumper sticker that read, "All sweeping generalizations are FALSE! (Including this one)", and so it is with both Multi-Level Marketing (a.k.a. "MLM") and non-MLM Network Marketing businesses, as well. Unfortunately, the questions being posed, here, aren't of the variety that can be effectively addressed with a "sound-byte" -style answer...

The key thing to remember about these businesses, like nearly all others, is that those who jump in headfirst, without first investing the necessary time and energy to do a little due diligence, are more than likely the same folks who've unsuccessfully "jumped into" a million other things previously, in more or less the same fashion, and can't understand why this, that or the other "sure thing" turned out not to be, when THEY tried them!

To be sure, there _are_ winners in these businesses, but just like every other business in the world, they tend to be the folks who first took enough time to study the lay of the land, then read, and seriously studied & rehearsed their materials and presentations, and then got out there and actually invested a MASSIVE AMOUNT of personal effort, rather than just shooting their mouths off about how "totally awesome" company X, Y or Z's plan and products were, and waiting for the low-hanging fruit to fall for their come-on lines.

If you've ever met anyone who's attended college, then you probably also know a few who either haven't, or who've begun, but then dropped out (for one reason or another). Those in the latter pool could very easily tell you, "College? Oh, man, are you kidding me?! That stuff doesn't work! I tried it, and it was a complete ripoff! They promised me a great life, and I ponied up THOUSANDS OF DOLLARS in cash, and what've I go to show for it? NOTHING!"

Likewise, if you ask around -- and by that, I mean, "ask among CEO's earning in excess of $250,000/year" -- I think you'll find that the uber-successful in any field have heard of the uber-successful in network marketing, just as doctors will have heard of lawyers and tech gurus. And, even though my wife and I aren't yet earning at those levels from the non-MLM network marketing business we operate, we both personally know well over a dozen individuals and couples who are that successful, including three or four whose names and numbers are in our cell phones, and with whom we speak regularly.

Again, it's not a matter of whether or not MLM's are a scam, but of whether or not those who join them are ready, willing and/or able to put in the study time and effort needed to actually follow through on the activities needed to generate the income levels desired. Sadly, the vast majority of those who begin MLM or Network Marketing businesses are either too uncomfortable or afraid what others might think to do that work, or are simply too naive about the time and effort commitments required in order to become successful. Then, there's the third (and, probably largest) group of all: those who've deluded themselves into believing that there are geese that lay golden eggs, and if they "can just find the right one...", their lives will become fairytale-perfect, and they'll be able to relax while the money just rolls on in, without ever having had to work for it.

And for what it's worth ("mea culpa"): I've been there, and done that, myself. I KNOW, FIRSTHAND what it's like to spin my wheels, "gearing up to get ready to almost get started to do the beginning parts, in just a few..." (and, of course, not reap any results). In a previous MLM attempt, more than 20 years ago, I wasted countless hours and every dollar I had, trying to "do it my way" -- and, of course, fell flat on my face, with nothing but memories and embarrassment to show for my experiences, so I know how frustrating it can be!

But the truth of the matter is that if you get together with a good, solid company, selling good, reliable products, and if you then TREAT YOUR NEW BUSINESS AS A BUSINESS, RATHER THAN AS A "GET RICH QUICK SCHEME", chances are very good that you'll do well at it -- whatever it happens to be! (And if you don't invest that time and effort, you will fail, as surely as you would in any other business.)

So, the question really comes down to this, folks: do you have what it takes to succeed, or don't you?

And let's not mince words, or play any of the aforementioned "coloring games" with that last question, because no one worth listening to has much use for any of that tired old guilt/superiority crapola! Let's just be 100% up front and honest about it... To succeed in ANY business you need a bare minimum of five things:

1) A product to sell (or service to provide, or both).
2) Extreme familiarity with the product or service's features, applications and/or benefits.
3) A customer willing to exchange his or her hard-earned money for that product's features applications and/or benefits.
4) A personal, driving reason why it is absolutely imperative that you market that product or service, and
5) A cost-effective means of bringing that product or service to market, so that your customer can realize its benefit, and you can realize a significant-enough net profit to facilitate your continuing to work in said field.

Now, if you don't make a serious commitment to investing the necessary preparatory time into understanding your intended vocational field, and then follow that commitment with the development of a serious game plan for attaining whatever it is that you want to realize as a result of working in that field, and then add to that the determination to invest the same kind of dogged effort it'd take you to become successful if you were launching, say, a landscaping, consulting or accounting business, what do you think the outcome will be?

I'd suggest that if you don't have the stomach for that kind of workload (and sadly, many do not), then at least be adult enough to admit that to yourself and anyone else involved, up front, and don't look for lifestyle solutions in business models that require more of you than you're willing or able to do.

The two _undeniable_ obstacles that MLM- and Network-type businesses share are the perceptions (intentionally fostered by some of them) that they offer quick-and-easy solutions to everyone's financial problems, and that everyone you meet can be ultra-successful at them, just as they are, when they begin. The truth of the matter is that these are business models in which _some_ folks have become extraordinarily successful, and in which literally ALL folks CAN become successful, if they're willing to do make the lifestyle changes and do the work required, in order to attain those incomes. But, just as a 9-year-old gymnast and a 9-year-old couch potato will have equal opportunities to be considered as contenders for the Olympics with will occur when they're both 16, it is entirely up to them to decide whether or not the goal means enough to them to steer their lives in that direction, or not.

Thankfully my family and I have finally found a sustainable way forward, and slowly, we're taking the necessary steps, one at a time, to get to where we want to go. It's not easy, and we're not as consistent as I think we'd all like to be, but we're heading in the right direction, and we feel good about that. I hope my comments have helped dispel some of the near-legendary myths and claims about Network Marketing -- and self-employment, in general, for that matter -- and that you and those you know will think twice about the person in the mirror, before either bragging or cursing about other such businesses. There's a reason why they're called "Business Opportunities", and not "ATM's": they offer those with sufficient courage and determination, a solid work ethic and the guts to apply all of them, a means of earning an exceptional lifestyle, if -- BUT ONLY IF -- that work ethic is employed, as specified, and over time. Another "minor" point is that most networking businesses speak of a 3-5-year plan, or a 5-7-year plan, because they know that that's how long it takes the average distributor to become wealthy, if the appropriate steps are taken. Unfortunately, most newcomers operate from pure, unadulterated greed, rather than any sense of the value they can bring to the marketplace, and their knee-jerk reaction is to try and cut corners, to get there faster.

There IS NO "faster"; there's only "following the plan" and "NOT following the plan". After all, it's a business, not a miracle!

Thanks for proving my point, especially with sentences like, "it's not a matter of whether or not MLM's are a scam, but of whether or not those who join them are ready, willing and/or able to put in the study time and effort needed to actually follow through on the activities needed to generate the income levels desired."

It's a psychological thing. If you fail at MLM, you must not have been ready... or willing to put in the time... or something else.

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