3 Lessons Every Brand Should Learn From Multi-Level Marketing

Generally speaking, the best advice one will hear about multi-level marketing (MLM) is “don’t.” 

While it’s certainly possible to make a life for yourself working for an MLM, the men and women who are capable of doing so are few and far between. More often, anyone who joins an MLM ends up stuck in a vicious downward cycle as they drive themselves deeper and deeper into debt, alienating themselves from family and friends as they desperately try to sell to and recruit anyone who will listen. 

To wit, a 2018 report published by the American Association of Retired Persons found that approximately 47 percent of people who participate in multi-level marketing lose money. Another 27 percent make nothing. And even among those who do make a profit, margins are extremely thin: 53 percent made less than five thousand dollars. 

The problem is threefold.

First, MLMs have a commission-based compensation structure, so if you cannot sell or recruit, you don’t make money. Second, most MLMs require participants to pay an upfront cost or even saddle people with recurring fees. Finally – and perhaps most impactfully – the people who participate in MLMs typically have no experience in either business or sales.

They’re naive about what it takes to actually succeed in running a business. They don’t understand that the MLM business model is inaccurate at best, and completely unsustainable at worst. And they have no idea what it takes to actually sell something.

Believe it or not, as a business owner you can actually learn a great deal from MLMs, especially given the above. 

Marketing Is Useless Without Passion

A lot of people that get involved with network marketing don’t actually care about the products. They’re in it to make money, and as they fall deeper and deeper into the MLM pit, that greed gives way to desperation. At that point, it doesn’t matter what they’re selling – they just want to sell it. 

As anyone with even a modicum of marketing experience will tell you, that’s a recipe for disaster.  

Today’s consumers are inundated with advertisements. We are drowning in marketing copy, in product pitches and brand awareness campaigns. This has had a few effects. 

  • We categorize any marketing message that doesn’t immediately resonate with us as white noise. 
  • We tend to react negatively when someone tries to actively sell us something with no consideration for what we actually want (more on that in a moment). 
  • We’re very good at sussing out when someone is being dishonest or disingenuous in their marketing. 

One of the biggest reasons MLMs have such a bad reputation is because they employ a veritable army of people who don’t understand the above. They try to pressure people into buying or joining based on half-truths.  They’re obsessed with their bottom line and don’t care about much else. 

Marketing Isn’t About Money – It’s About Relationships

There’s something else that most MLM consultants don’t understand about marketing. At the end of the day, your bottom line is secondary. What actually matters is the people you’re selling to. 

If someone buys a product from you once, that’s good. You’ve made a sale. But there’s no guarantee that the customer will tell their friends and family about you. 

There’s no guarantee that they care much about your brand. There’s no guarantee they’ll speak positively about your products, either through social media or online reviews. And there’s no guarantee they’ll buy from you again. 

If someone trusts your business? If they form a connection with your brand rather than purchasing a single product? You haven’t just secured a sales lead – you’ve forged a relationship. 

Successful marketing requires that you understand your audience’s needs. It demands that you learn to look at things from their perspective. That you prioritize offering them something of value rather than focusing solely on your own needs. 

Perhaps more importantly, great marketing requires that you care not just about the people you’re selling to, but about what you’re selling them.  In other words, it requires both passion and empathy. These are things most MLM consultants either don’t understand they need or simply lack altogether. 

Smart Investment is Critical

Starting a business does require an upfront investment. There’s no denying that. The problem with most MLMs is that people don’t use their money intelligently and they invest with no concept of whether or not they can actually succeed.

To put it another way, they drank the MLM kool-aid and spent money they don’t necessarily have.

The lesson here is simple. Where marketing is concerned, where you invest matters just as much as how you invest. For instance, there’s no point in spending several thousand on an extensive, far-reaching Twitter ad campaign if nobody in your target audience uses the platform.

Basically, what we’re saying is that you need to focus your efforts – and your finances – on where your customers can be found. You need to know how they consume media and what websites they tend to use most frequently. Otherwise, you cannot reach them, and you’re basically just throwing money away. 

Conclusion

MLMs have a terrible reputation, and it’s not one that’s entirely undeserved. But they aren’t without value to you as a business owner. There’s a lot you can learn from them when it comes to marketing your own brand and selling your own products – even if it’s what not to do.

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