Thursday, March 09, 2006

Multi-level Marketing — Part II

Everyday, I see more and more friends joining multi-level marketing companies without getting a full picture of what these "opportunities" usually entail. I don't claim to be more knowledgeable about this than others, but having actually joined a MLM (that's where my $200 went, as mentioned in the other post), I got a first-hand insight into their tactics.

When you first join the company, the pressure would be upon you to purchase a set. They don't physically pressurise you, but through the talk (complete with plain A4 paper and pen), they would imply the disadvantages of not investing in at least one piece of the product, and using it for yourself.

They seemed to adjust their marketing pitch to your personality. I cannot vouch for this observation, since I did not stay there for long enough to see everything but the recruitment/marketing process. In my case, they told me that all the uplines in the company did purchase a set of the products themselves, regardless of whether they could afford it. It was brutally effective that I forgot about my mother's (and universal law of money) advice: Never spend more than you can afford to, even if it were for investment, never ever go into debt because of it!

Later, one of the uplines sat down with me, and explained to me the different markets for products. There are the hot, warm and cold markets. Cold markets are people that you don't already know yet, warm markets are people who you have gotten into contact with before. And finally, we have the hot market, which as you smart readers would already have realised, are your close friends and relatives.

(Right now, as I am writing this, I have absolutely no idea whether this should be a comfort, or something for me to worry about. Is this a popularity contest here?)

For first timers, you are expected to write down a list of all your contacts, along with their phone numbers, details about their family members, whether they are susceptible to marketing, their personality, salary, and address. From there, your upline would analyse together with you the first targets. From there, you would do either direct marketing (selling to your relatives/friends who can directly afford the product), or recruitment (getting people to join the company under you).

Recruitment is basically initiated from the phone. You pick up the phone, dial your friend/relative's number, and ask them out for lunch. (Hmm... How did that sound so familiar?) During this phone call, you are not allowed to mentioned "MLM, network marketing, opportunity, or anything related." For now, all you are supposed to do is to get the target out for lunch "whether you have to lie to him, or something", one of the senior uplines told me. Surprisingly, right on my first call, my friend called my bluff.

"Eh, you asking me out for lunch. Does it have anything to do with MLM or something?"

"(after a few seconds pause)... NO! Absolutely not! What makes you think that I am involved in MLM?"

"Hmm... Please don't blame me, I have a few friends who I haven't talked to for a long time, and when they all asked me out for lunch, it turned out to be a MLM. I have no interest in it, and I really hope that you are not lying to me."

That set off a trigger. I was about to lie to my friend just so that I could get him down to have lunch with me? I was at the risk of ignoring my conscience! In addition to that, I had not really thought through my feelings: was I interested in doing this in the first place? I remember being bombarded by images and stories of success, money, and cars; so much so that I had not really thought of my interest: Did I really want this to be my vehicle to success? My interest is in an online business, and not this! That tortured me, and I finished the call, extremely shaky.

At this point, I want to point out that MLM is a viable venture. You believe that you can earn money/get rich, but what is important is that you go in with your eyes wide open, especially to the many risks and pitfalls. I realised that my personal values do not align with those of MLM, (perhaps even marketing itself) and that this is probably a mistake making my decision to join purely based on their pitch alone. I don't like having to lie to friends, nor do I like earning money from my friends/relatives through using such tactics.

In short? I don't like the sound of this.

In the end, I bailed out of their program, without giving them any prior notice. After all, they cannot blame me for dodging them, after all the dodgy tactics they have used on me. I stopped answering their calls, promised myself to not join a MLM program again.

Therefore, to all my dear friends out there, if you ever have me in your mind the moment you are asked to do recruitment, I really thank you for remembering me. I understand your sincerity in wanting to show me your opportunity, but after my own personal analysis, I have realised that MLM is not for me, no matter how much it is "the next big thing". I know that your uplines/mentors would ask you to invite me out anyway (that's what mine told me, just before calling a friend who was openly against MLM), but no thanks. Between money and friends, I would choose the latter.


Anonymous k-craze said...

Just for all the readers' information out there, nowadays they do not call it MLM over the phone anymore, rather it has became a business venture in their context, one that would earn you money while you sit back and relax and see all your underlings do their job and earn you money. Anyway same to what i said before, only those who find only outsiders who are willing to buy or join them are considered decent at the very least. The rest can just eat shit and die.

Friday, March 10, 2006 11:03:00 PM  
Blogger Han Xian said...

MLM is pretty sucky but what about selling insurance?

Sunday, March 12, 2006 11:31:00 AM  
Blogger Pkchukiss said...

Ok, this reply took me more than a day of messing around with some Captchas which keeps thinking I am a spammer.

Anyway, insurance isn't the same as MLM: so far I've been told upfront that it is going to be insurance. You don't lie = people are less likely to not believe you, and the sad fact is that MLM companies encourage downlines to lie to prospects, just to get them out to the designated "trap", where the atmosphere is generated to trap the prospect.

But I don't think I will take up insurance now, I have enough to cover me for this period of time! First was the retired major from the air-force, who managed to convince me to get a term insurance back when I was in BMT, and then Joie, who essentially managed to cover everything the previous term insurance didn't.

Thursday, March 16, 2006 8:40:00 PM  
Blogger Han Xian said...

Well I'm sure Isaac joined Prudential so watch out for him and in the near future, me because I'm intending to join and SB, I really hope you can buy a policy from me. Haha! Just kidding. I'll choose the latter as well = )

Saturday, March 18, 2006 10:57:00 AM  
Blogger Badaunt said...

One of the most insidious things about MLM is the way they encourage you to see friends and family as business opportunities. I once got a letter from a first cousin in NZ I hadn't seen for years, starting off about how he 'thought about me all the time' and how was I, and all that, and then going on to try to get me enrolled in some MLM juice marketing scheme. (I think it was juice - something that made you live forever and cured cancer and made your hair grow and would bring peace on earth, the usual rubbish).

I wrote back and said how NICE of you to think of me when you were making a list of people to make money from! Is anybody else even talking to you any more?

Except that I said it a little more kindly (but not much) and far more long-windedly, and he has never been in touch again.

The next time someone tries to get you into one of these schemes, ask them to give you a proposal in writing. Tell them that's how you do business.

You can GUARANTEE they will never get back to you. Putting the schemes in writing exposes them for what they are - glorified pyramid schemes. The only people who can possibly become rich are the very, very few at the top, no matter what they tell you.

(If you're feeling creative/bored/angry, try making a simulation of the way the scheme works using a model village of 100 people, and see how many benefit. That's how an economist demonstrated the whole concept to me, years and years ago. It was enlightening.)

Friday, March 31, 2006 6:34:00 PM  

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