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6 Marketing Lessons from a Pyramid Scheme

December 16, 2013

Was at a grocery store over the weekend, in the self-checkout line, when a guy came up behind me and asked, “How are you?”

I’m in Nashville and people are nice here, so that wasn’t weird at all. I just thought he was being friendly.

I told him I was great. Then he gave me a quick pitch about making $300-400 daily and handed me this card…

MLMcardThen I thought, “This is going to make a great blog post!”

So here we are…

6 Marketing Lessons From a Guy Trying to Sell Me a Pyramid Scheme

1. Let People Know You Exist – This is something this guy did right. It doesn’t matter how great your product is, if nobody knows about it, it might as well not exist.

If there’s one thing I’ll give people involved with multi-level marketing (or network marketing, as many prefer to call it), it’s that they have the balls to walk up to complete strangers and talk to them about getting involved. If you’ve got a business, it’s your responsibility to get the word out and a cold approach like this guy did is one way to make that happen.

So what’s the downside?

There are plenty, but the big downside is that people involved with multi-level marketing don’t know when to shut up. Like a guy who just found Jesus, just got sober in a 12-Step Program, or just came out of the closet, they’re so excited about their new opportunities, they tell everybody…multiple times! Then they try to get those people in on it, regardless of whether the opportunity is a good match.

“I know you’re Jewish, but Jesus would love to see you Sunday, David.”

“Is that water? Good. But you’d still be able to get something from an AA meeting, David.”

“David, I know you’re not gay, but we could really use you in the gay softball league.”

This is one of the reasons multi-level marketing is also known as the “NFL Club” (No Friends Left).

2. Everybody Is a Prospect – People in multi-level marketing approach prospecting like a drunk frat guy approaches hookups — if you have a pulse, you’re qualified.

This is a major problem with multi-level marketing and one of the reasons why it doesn’t work. Most people have no business getting involved in a multi-level marketing company — they have no business experience, no money to invest, and no desire to sell anything. So while they might end up on somebody’s downline, they’re not going to add any value to it.

Sadly, most businesses have a similar approach. They think “everybody will love this product” when that is never the case. It’s a much better model, from both marketing and brand development, for a business to be selective about who it deals with. All customers are not created equal.

3. No Followup – With this guy specifically, I got his card and that was it. I can follow up with him if I have any questions, but he has no idea who I am or how to get in touch with me. That gives me all the power in the relationship.

This is a good lesson for anybody who is attending a conference or other event where you’ll be meeting a lot of people. You don’t want to be the guy who passes out as many business cards as possible — you want to be the guy who collects as many business cards as possible.

It’s also a good lesson for bloggers, who will benefit from having a mailing list, so they can get in touch with readers at any time. At the very least, have an RSS feed available.

Of course, this is a double-edged sword. How (and how often) you followup is just as important as the followup itself. Don’t become a member of the NFL Club.

4. Provide Value – If you want to succeed in business, you have to sell something. And if you want people to buy that something, it needs to provide value.

To keep from being classified as a ponzi scheme, multi-level marketing companies must have a product.

Old school multi-level marketing companies like Amway sell high-priced consumables that you have to order again and again — pills, potions, and lotions. Even though it can be argued that these products are over priced, you still get something for your money.

Newer multi-level marketing companies have introduced digital products, which often include (or are limited to) downloadable “training” and software, such as replicated websites, which exists solely for the purpose of growing the company’s downline. Empower Network is an example of this.

I’m not here to judge value of what provides value to people, but if you want to stay in business, you need to make sure you’re doing this.

5. Introduction to Possibility – I’m probably the only guy who gets excited about going to pitch meetings for multi-level marketing companies. As a marketing guy, I like to see how “opportunity” is sold.

One of the things I think multi-level marketing companies do right is introducing people to the possibility of being their own bosses. Multi-level marketing companies are also full of “success” information, such as Think and Grow Rich. As entrepreneurs, writers, or otherwise creative professionals, we assume everybody knows that it’s possible to make a living from your ideas, but this isn’t the case. For many people, their first taste of this was through a multi-level marketing company.

6. Sell the Dream – This is something else the guy who approached me did right. When it comes to “selling the dream,” there is nobody better than a multi-level marketing company.

Look at the card…

  • “instant pay day”
  • $300-400 daily
  • from the comfort of your own home…

And if you go to almost any website for a multilevel marketing company, you’ll see…

  • sports cars
  • a beach
  • a big house

Is multilevel marketing your key to all these things? Is it as easy as these companies make it look?

Probably not.

Still, the “sell the dream” approach works. I’m not saying that you should lie or be deceptive, which is the approach of many multilevel marketing companies. However, in your marketing, focus on the good, the ease, and the possibilities of what will happen when somebody uses your product.

Here’s an example… Let’s say you have a weight loss product. You don’t sell weight loss by talking about all the time in the gym, limited food options, and discipline — that sounds like work! You sell weight loss by talking about how great the prospect is going to look and feel. You sell weight loss by talking about how all the prospect’s friends will be envious. This will hopefully motivate the “hard work” needed to make it happen.

You want to be like a pushup bra — accentuate the positives. Make the good things you’ve got so good that people will overlook any negatives.

The Question You’ve Been Asking Yourself…

Should you get involved with a multilevel marketing company? It’s something we’ve all asked ourselves at one time or another, even those of us who already have non-multilevel businesses.

I don’t know. As I’ve pointed out above, there are certainly opportunities in multilevel marketing to develop skills that will assist you in any business. From my experience though, you can develop these skills elsewhere.

If you’re brand new to entrepreneurship and have no idea where to start, you may find value by joining an already established system, such as the ones offered by multilevel marketing companies. However, there are plenty of books, such as the Job Escape Plan series, which will give you something similar that you can do on your own and without the investment that signing on with a multilevel marketing company requires.

Good luck!

ABOUT THIS SERIES: Every Monday, I analyze the good, bad, and ugly about the marketing behind a common business or famous personality. See other posts in this series here and, if you have a request for something (or someone) you’d like me to analyze for this series, contact me via Twitter.