On a call yesterday following the pyramid post, people wanted to know what to say if, they're presenting the business or product, someone pops the question,
"Is this a pyramid?"
Before you brainstorm over your winning comeback, how about a quick check to see whether 1) your company acts like one or not, or 2) if you are acting like one (without realizing it, of course)?
Here's the question we discussed:
1. Is your business all about recruiting?
If so, you are acting like a pyramid, according to Rushkoff's book, Coercion:
"a pyramid scheme is...[where] the need to subscribe newcomers outweighs whatever benefits the products or system has to offer. Many MLMs sell distributorships more than cosmetics [name your product or service - KK]."
Yes of course you want to recruit reps - but if that's all you do, you are in the pyramid zone, because you give the impression that the product and customers don't matter, except to sell distributorships.
Everyone quickly re-evaluated what they were doing to be sure they weren't coming across like that.
All could see how a fixation on doing 1. above might give someone else the impression that "Yep, there goes one of those pyramid schemers."
After a quick review of 9 different company pay plans (of distributors on the phone) it became clear - it's true what the recruiters say: "There's no money in customers. All the money's in the recruiting."
Company owners decide where to put the money they pay their reps. Say a network marketing company pays out to the field, 50% of what it takes in. They have complete disgression on how to divide that up - between paying for recruiting and amassing customers (for those companies that make the recruiter/customer distinction - and some don't.)
So, how much were companies paying for getting customers (who were not also distributors)?
On product orders ranging from $85-120, some people reported getting paid from 0 - 7%. In one company, they got nothing on those customer orders if they hadn't reached a certain position in the company based on their sales; and for other companies, the reps reported getting 5 or 6% for orders of $100. (A few paid more. List to be posted soon.)
Five bucks for a hundred dollar customer order?
There are much easier ways to make money than that!
However, for recruiting, we got much higher returns. With sign-up bonuses and fast start bonuses of $50-350 or more, for orders ranging from $300-1000.
Who else wouldn't rather make $50 than $5 for making one sale? Big money in selling distributorships (which may include products). Versus getting just customers.
So yes, companies whose pay plans are weighted so much to recruiting are acting like a pyramid. Worse, they make their reps look like it too, since they want to get the most return they can for their time, and would rather make $50 than $5. Who wouldn't?
Well, as they say, if it quacks like a....
Oh. What to say to that question, "Is this a pyramid" (or 'one of those things')? One option (we discussed several):
Let me tell you what we do, and you can call it whatever you want ok?
PAUSE
We market products directly to consumers, people like you and me, and we also find people who want to do that with us. You think you could do that if I showed you what to do?
(That's from the Truth book.)
And yes, there are other options...for another post...send in yours that have helped. (Use 'Comments' below).
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Reasons to Shop through Shop to Earn
By: bwritr | 14-07-2008
What is the advantage of shopping through someone else's Shop to Earn web portal? For example, if someone who shops online anyway did not want to own a website or otherwise invest in Shop to Earn, what would motivate them to shop through my site rather than just shop as they do now?
Nobody can answer this question.
By: JGgotogirl | 11-07-2008
What is the market size in the United States for tactical flashlights? How many are sold each year? How many are sold to police, military, security personnel and other relevant protective services?
Where or how could i become a promoter of NYC in Japan and vise versa?
By: euro777 | 11-07-2008
Hello How would one become a promoter of New York City for Japanese people living in Japan. I live in New York, but my wife is Japanese. I also love Japan and love to travel there but i do live in New York. Working as a promoter would be ideal work for me( better than working in restaurant) Thank you all in advance urmas mollerson
PR or Marketing???What is more ...
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PR or Marketing???What is more creative????
Scm review
By: anil kumar | 10-07-2008
can rising petrol price can destroy the supply chain management concept
Phorm illegal interception also copyright of websites visited.
By: illegal | 03-07-2008
You have a child with their own computer, this child is not the ISP account holder a webwise page pops up this child spots the name webwise and associates this with the BBC program he uses at school so clicks to allow. This child has just been allowed to alter the T&C of the ISP account while under the age of being allowed to give informed consent, The ISP now is profiling a minor without parental consent, changed the customers T&C without his verifiaction. Would this fall into invaision of privacy since the person consenting was mislead by false advertising yes Phorm selected an alreadyb known and trusted name by children used by the BBC. 1. Would this be breaking the law? 2. Why does the account holder have to verify wioth password to login or even talk to the ISP about anything but a child can change the T&C without any way to verify it is the account holder? 3. Interception of the browser is illegal so how can Phorm suceed without breaking the law? 4.Websites you visit all have copyright you can visit but are not supposed to copy, proccess for material gain this phorm will do who wil pay the website owners for breaching their copyright? 5. Why will phorm not follow the robots.txt for its own instead of googles? 6. With such as google I can delete cookies and any tracking they are doing is stopped, with phorm it is on my connection so can never turn it off 100% have tot ake the word of one person who has no reputation since he has been hijaking browsers illegally for years would you trust this knowing that?
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