Multi-Level Marketing has a Problem

Multi-Level Marketing Has a Problem

Multi-level marketing (MLM ), also known as network marketing or referral marketing, has existed for many years. In this strategy, a marketer sells directly to consumers and encourages or persuades those consumers to join the marketing chain, also known as a “network.”

Multi-level marketing is a marketing strategy based on the system of various distributors. These distributors recruit hardworking people who have agreed to work towards a common goal. Multi-level marketers are compensated for the sales they generate. They also earn money through the other salespeople they recruit to their group. Most MLMs require members to purchase starter kits first, while some require members to purchase a minimum monthly order value to maintain their membership.

More than one thousand firms in the United States alone are using Multi-Level marketing as a marketing strategy to get their products across to various consumers worldwide. This means Multi-Level marketing is a big business in itself.

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

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

The direct method of selling has existed 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 vacuum cleaner inventor, he designed and constructed the first domestic vacuum cleaner. His vision was to help households 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 make 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.

For many years, the cold canvassing method worked well, resulting in 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 homeowners into prospective buyers and increase sales.

However, with a series of notable changes in 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 just to go out, knock on people’s doors, and turn them into potential customers. However, new strategies with pre-booked demonstrations over the phone have been a reliable method to solve the changed habits in the market environment.

Direct sales skills- your advantage

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

The truth is that the skills and knowledge garnered from “genuine” direct sales undoubtedly helped many business owners develop sales in other areas, such as multi-level marketing. There is no better sales academy than selling directly to various consumers in their homes. Would you believe some 25 years ago, the most skillful and highest quoted salespeople came from segments such as encyclopedias, insurance, 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 out that 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 to the new circumstances and business environment we face more frequently than ever for many reasons.

The exploding digital world is one very important reason.

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

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 more people, it will die sooner than later. One reason for this is the dropout rate that will always exist among the network people. 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 network’s necessary organic growth to leverage the expected commission payouts and keep the members happy. Could this be the reason why some MLMers sometimes claim that the market seems to get saturated?

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

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

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

Depending on the countries chosen for the campaign, a couple of millions will easily 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 to be an interesting and potential complement to their multi-level marketing business.

MLM and Digital Marketing – the same basics

In principle, multi-level marketers and digital marketers work with the same basic, which is a huge network. The whole business is based on the fact that the network is big and growing constantly.

As an MLMer, you will find the tool within the Six Figure Mentors platform. You can either limit or expand the target group you are interested in into 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 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, 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. Everything is going faster nowadays, so within a very short time, affiliate marketing will definitely be an indispensable marketing tool for successful MLM. Smart and successful MLM marketers jump on the digital affiliate train now. You will be ahead of all other people in the industry when they 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. He will reveal something very interesting about Multi-Level marketing. You will also get immediate access to the FREE 7-day video training, which will explain in detail how it all works.