Well, it happened again on Sunday November 6, 2016.
This time, it’s gone viral, and as an owner or executive of a network marketing company, your company should be prepared for some fallout.
On Sunday November 6, 2016, John Oliver, host of HBO’s Last Week Tonight, shredded the network marketing industry by labeling as “illegal pyramid schemes”, all companies that use any form of multi-level compensation.
Oliver spent about 30 minutes calling out some of the biggest players in the direct selling industry. As industry professionals, we all know that our distributors and consultants are often faced with the “illegal pyramid” challenge. Unfortunately, we all also know of the damage done to our industry by the truly illegal pyramid schemes masquerading as legitimate network marketing companies.
Facing the Challenge
Many companies prepare their distributors for this challenge by comparing traditional business organization charts to the pyramid-shaped structure of MLM compensation plans. The traditional org chart generally reflects the hierarchical nature of corporate management. Aside from the obvious hierarchy, however, not much else is truly comparable.
In a corporate environment, employees are paid to perform the duties in a job description (that’s the general idea, anyway). Employees don’t advance to management levels by recruiting lots of new employees who purchase and/or sell a whole bunch of the company’s products. Oliver uses a broad brush to paint all direct sales companies as pyramid schemes, when in fact, most companies are legitimate.
Success in our industry is simple, but it’s not easy for distributors to join the top 20% in any organization. Legitimate companies, those selling real products to real customers, serve a vital role in the global economy. According to the Direct Selling Association, 2015 saw over 20 million people involved in over $36 BILLION in sales in the US alone. (DSA.ORG)
To ensure your own company’s sustainability, focus on selling real products to real customers. Internal consumption may be an important part of your sales model, but selling to CUSTOMERS is far more important.
At Easy Party Plan, we work exclusively with legitimate direct sales companies selling real products to real customers. Yes, our clients may have requirements for recruiting and sales, but the biggest differentiator that keeps our clients on the legitimate side is the fact most of their sales comes from customers, not the companies’ own distributors.
Think about this: in the same time that it takes a distributor to meet a prospect for coffee and make an enrollment pitch, a party plan consultant can meet 10 people in one spot and make 10 sales. Of the 10 new customers, 2 want to host an event of their own and introduce their friends to the consultant. Three want to become preferred customers and join your autoship program. One of the new customers asks the consultant if they can be a consultant, too!
When your company culture values selling great products to real customers who see the value in your products, you, your company, and your distributors can rest easy knowing that you can’t be classified as a pyramid scheme.
Please share your thoughts and experiences! Want to talk? Great! PM me and let’s talk.