Where forth art thou?: DVD's Analysis of Multi-Level Marketing (Part 4)

Monday, July 31, 2006

DVD's Analysis of Multi-Level Marketing (Part 4)

Part 1 here
Part 2 here
Part 3 here

IV. Relationship Issues: An Experiential Problem

Learning the Hard Way

MLMs grow by exploiting people's relationships. If you are going to be in an MLM, you swallow hard and accept this as part of "building your business." This is "networking." But to those not "in" the MLM, it seems as if friendship is merely a pretext for phoniness, friendliness is suspected as prospecting, and so on. There is no middle ground here, try as you might.

While this is the most difficult point to make, it is perhaps the most important. Anyone who has any experience with an MLM has strong feelings, either for or against, and this is the problem. Polarization runs deep.

High-pressure Selling -- Reserved for Pyramids Only

When it comes to selling product, MLM sales reps are probably no more aggressive or obnoxious than ordinary salespeople. Since most are not salespeople by nature, and it is characteristic that MLMs attract few people with any experience selling this particular product or service, they usually sell through pre-fab "parties" or home "demos." Thus, sales pressure is exerted by situation, if at all.

It should be noted that when selling product, the only distinction from a real-world business is the possibility for deception due to the "looseness" of the MLM and the incentive to exaggerate claims without any accountability. Other than this, selling product in an MLM is fairly similar to selling any product in the real world.

But when it comes to getting you "signed up" as a "distributor," the MLMers get pushy and deceptive beyond the boundaries of polite social norms.

Remember, an MLM is defined by its rewarding people to recruit others in multiple levels.

"Mother, Let Me Tell You About a Fantastic Opportunity..."

Even ex-accountants are willing to practice the crudest of high-pressure selling tactics, at least when it comes to "signing people up." The end justifies the means, when it comes to getting people to come to the "meetings," where the objective is to get a materialism frenzy going at high pitch through a slick speaker or video. The reasons for this "confidence building" should be obvious by now, but here we are considering the relationship cost associated with the "success" of the MLM.

The above title is meant to be absurd. Most people, no matter how jaded, would not foist such a con on their own mothers. Even if people don't know the specifics of what is wrong with MLMs, intuition often warns us: "Don't tamper with that relationship." The first marks for recruitment are the gullible, or the "expendable" friends. But successive moral compromise, experience, and desperation... may yet lead to "good old Mom."

Never Admit You Are Wrong

Many have left high-paying jobs to "pursue their dreams" in an MLM. Having been conned so dramatically, they do not easily admit defeat. It seems easier to cling to the bad dream in an increasing cycle of desperation to make the MLM work against all odds. "Losers" at the bottom congregate into support groups, perhaps spinning-off another MLM where they can be "boss."

There is an undeniable camaraderie among MLMers. But for everyone else, "there goes the neighborhood." It is saddening to see people being encouraged against all instinct and common sense to chase after an illusory "pot of gold," but what can be done?

Counting the Cost: The First Church of MLM

Many readers will share the experience of observing MLMs divide families, friends, churches, and civic groups. Lifelong friends are now "prospects." The neighborhood is now "a market." Motives change, suspicions rise, divisions form. The question is begged: "Is it worth it?"

Especially nasty is the church situation. Will the pastor join? If not, he will take a dim view of MLM proselytizing at church functions; animosity will rise, factions will form. You are either "in" or out. If the pastor joins, then those who are not "in" will feel a little uncomfortable in this church.

A church (or any community group) can be easily torpedoed by an MLM.

Trust Your Instincts?

For most people, thankfully, the MLM experience usually ends in very quick financial failure and is then sidelined. Two possible responses are: 1) being embarrassed about participation, or 2) becoming even more intractable when the MLM has failed. You will find the latter chasing after the latest "get rich quick" scheme with similar results. "If we could have just sponsored so and so--they have so many friends--we would have made it."

Thus, there is reason for the "bad taste" most people have for MLMs. By instinct if not experience or insight, we wince at the thought of what we know will follow in the wake of an MLM. Relationships strained, factions formed, deception, manipulation, greed, loss, a closet full of videotapes, brochures, and useless inventory that "everybody wants."

Disease Alert: Beware of MLM Blindness

Apparently, it is difficult for gung-ho MLMers to see how they look from the outside. They can watch lifelong friendships unravel, churches and civic groups poisoned, the avoidance of friends and family, etc., and never see that MLM was the cause.

If you try to point this pathology out, you are treated as if you have attacked the very gospel! Perhaps for some, the MLM approach is a new gospel?

They will claim to have made "new friends," most of which are MLMers or new acquaintances who could be considered "future prospects." The shallowness of these "new friends," the stilted conversations among the "old friends," and the embarrassment, in general, for what seems clear to everyone but the MLMer go unnoticed. Callousness sets in; standards are lowered.

Of course, it could be pointed out that this might have happened anyway. Perhaps the die-hard MLMers would have ruined their friendships anyway in some other non-MLM business failure. Is the MLM really the cause, or just the vehicle?

Business failure of any type is traumatic on the relationships involved, but in most small businesses there is at least the chance of success. And this is never the case in an MLM, unless "success" can be defined as profiting off of the failures of others.

Non-MLM real-world businesses that offer products of interest to friends, family, etc., such as insurance agents and small retail shop owners, seem to be more circumspect in dealing with personal relationships in all but a few rare (and grievous) cases. But the MLMer is recognizable by duplicity of friendship overtures, overbearing glad-handing, full-time prospecting, outrageous initial deception, and social callousness. This is no accident, but rather sheer desperation. How could it be otherwise? For the active MLMer is in a hopeless bear trap: with hubris as one steel jaw and oversaturation the other.

And so the MLM relationship "bull" tramples through the relationship "china closet," blindly ruining fragile and valuable things. Some never pull out of this, figuring the coldness they experience in their emotional lives is due to some other cause than their MLM participation.

The Aftermath

One can't help but wish that the "neighborhood" could be like it once was. But an MLM storm has blown through, ruining valuable relationships with no regret or conscience. And brace yourself, another one is coming. Perhaps it is in that smiling face approaching you, or in that nice letter you just received from a "friend"?

What goes unnoticed to the MLMer is that when the neighborhood is turned into a marketplace, something precious is lost... which is not easily regained.

This aspect of the MLM experience should not be underestimated, and the reflective reader would do well to think twice about the value of friends, family, community, and church fellowship before joining or continuing in an MLM.


Summary of What's Wrong With Multi-Level Marketing

  1. MLMs are "doomed by design" to recruit too many salespeople, who in turn will then attempt to recruit even more salespeople, ad infinitum.

  2. For many, the real attraction of involvement in multi-level marketing is the thinly veiled pyramid con-scheme made quasi-legal by the presence of a product or service.

  3. The ethical concessions necessary to be "successful" in many MLM companies are stark and difficult to deal with for most people.

  4. Friends and family should be treated as such, and not as "marks" for exploitation.


It is hoped that by clearly pointing out "What is Wrong With Multi-Level Marketing" that many might be spared the inherent and associative pitfalls by avoiding the practice.

As well, for those who insist on practicing MLM, it is hoped that this analysis will serve as a handy framework of problem areas to be avoided if and where this is possible.

3 comments:

pinkmist said...

the mlm topic is getting boring lehz..=(

Mr & Mrs Chan said...

MLM focused on the sales people rather than the product itself...

nwm said...

pinkmist is right. its getting a little boring.
not to mention... a little biased?!

this writer seems to have gone thru the same negative experience you had, xlx, at Astral.
it reminds me of the early days of another Singaporean company WBG or aka Hunza.

if a company requires its workers to attend "pep talks" over & over, and not much else to do with solid products... then it clearly isn't a "clean" company... cuz all they've got is the money game going.
and with products like Astral's and Hunza's, I really don't see much else can be talked about in a seminar except "Recruit Recruit Recruit". heh.

and i definitely do not agree with the minor mention of insurance agents. they should be held responsible at the same level or worse than mlm-ers. its only cuz they've got the central bank to reign in the rules of their industry in this modern day.

no doubt, local DSAs & Consumer Watchdogs have to work harder at clamping down the bull-crap MLM companies, so that legit companies can operate in peace!