Multi-level MARKETING

by Mike Wright

Too many great products and opportunities fail because the marketing was left out of their Multilevel Marketing business. I was told a story of a great marketing manager that started every meeting by writing the marketing mix on the white board, “Product, Price, Promotion, & Place.” The 4ps served as his meeting agenda. As issues were discussed, he’d force his team to answer the question, “Is this a product, price, promotion, or place issue?” As ideas were presented, “Is this a product, price, promotion or place idea?” He was convinced that business success and failure always had something to do with an element in the marketing mix. 

Consider a few thoughts on how our industry can improve our product, price, promotion, and place marketing.

Product

Our industry has the knack for bringing to market game changers. From mangosteen to Mary Kay, and from aloe to Avon… our focus on product is uncanny. However, too often we see great products fade away because the rest of the product (the brand) isn’t so great.

Early in my career I worked for a boring and drab software company. A new CEO was brought in to spark our lackluster performance. One of his first orders of business was a town hall style meeting held on the campus’s outdoor basketball courts.

When questioned on his strategy for turning the company around his explanation was not about launching new products… It was not about cutting costs… It was not about bringing in fresh people with fresh ideas... He simply said, “Great companies tell great stories.” 

I stood near the three-point line thinking, “What’s our story?” The answer was clear; we were a boring and drab software company. No wonder our sales were down and industry experts were speculating bankruptcy or takeover. We had great products, great people, great capital, but somehow we hadn’t gelled those positives together into a story that the market thought was compelling.

With time a great story emerged and the market started to listen. That rookie CEO went on to tell Google’s story – and man what a story that is.

Your story is your brand. A strong brand is the equivalent of a strong story. Look at the leaders in our industry and you’ll find companies that have a great brand with equally great products. Too many individuals in our industry think that if a great product is developed that a strong brand is a natural result. That’s unfortunately not true.

Puzzle boxes displayed on store shelves show you the full color magnificent end result. Imagine a puzzle box that displayed a single piece of the puzzle and nothing else. Your physical products are a piece of a much larger puzzle called your brand. Your great product deserves a great brand – put one together.

Price

Our industry has made an art out of pricing the products we box up and ship out. After all, those prices have to support commissions and retail sales strategies. But too often we limit ourselves, believing that a product isn’t a product unless money is exchanged. We don’t think of a commission check, a cruise promotion, a conference call, a rank label pin, etc. as products. But these company benefits are not free. They cost time, energy and attention.

A cost strategy is just as important as a price strategy. You wouldn’t launch a new product without a thorough analysis on what to charge for the product. Likewise, we should do a thorough analysis of our non-monetary psychological costs that our customer must pay in exchange for commissions, benefits, and recognition. Too often the feedback from failed MLMers is that the cost is too high. The time, energy, and attention needed to succeed was simply not worth it. Our industry is notoriously vulnerable to this consumer mind set because sometimes the cost is too high, sometimes we hide the real costs, or more often than not, we don’t do a good job at explaining why the cost is worth paying.

Review and adjust your psychological costs in the same way you review and adjust your product’s price. Think of a floor and ceiling pricing structure. The floor being the minimum price that can be asked (anything less makes the company unprofitable). The ceiling being the maximum price that can be asked (anything more and there’s no demand). Whether the price is closer to the ceiling or closer to the floor is open for discussion and strategy. Psychological costs work in the same way, and warrant the same attention and analysis. 

If someone were to ask a distributor why their vitamins were priced higher than store brands, the distributor would likely have a compelling reason. Give your market an equally compelling reason why the time, energy, and attention are worth the benefits.

Promotion

If promotion in it’s simplest terms is a strategy for getting the word out, then in our industry… our most important promotional tool is the independent distributor. Not the brochure, not the DVD, not the website. Our Distributors are ultimately responsible for telling our story, and how well they tell it has everything to do with promotion.

A multimillion-dollar TV ad campaign is a waist of money if those captured by your commercial get involved with Distributors that are less than captivating. We’ve heard the thunderous calls for better tools, a.k.a. better promotional tools. Somehow we’ve been lead to believe that a better brochure, a better website, a better DVD will fix the nagging issue, when what’s really needed are better Distributors. Think about it, your incredibly great DVD isn’t so incredible if Distributors don’t buy them… If they do buy them, they’re not so incredible if they don’t give them out… if they do give them out, it’s not so incredible if they don’t follow up. In Multilevel Marketing, promotion is 90% Distributors and 10% traditional promotional tools.

Don’t misunderstand; you need great promotional tools that represent your brand well. Who wants to hand out an ugly brochure or a long winded self-centered DVD? But don’t lead people to believe that the tool is so good that all they have to do is throw them out like seeds and reap an instant harvest. When an instant harvest doesn’t happen, you’ll get instant discouragement (weeds).

See to it that your distributors understand that they are your number one promotional tool. Traditional promotional tools are important, but not nearly as important as a well-trained distributor force that knows your story and loves to tell it, even when they don’t have a traditional promotional tool on hand. 

Place

In many ways Multilevel Marketing was born out of the idea that you could replace the middleman by paying your friend, your neighbor, your relative to be the middleman. We really shook up Place Marketing. But, buying products directly from friends and family is becoming increasingly rare, even in our industry. No longer do I buy products from my neighbor, instead my neighbor convinces me to sign up so that I can buy products directly from the company. My neighbor has been replaced. But maybe that’s not such a good thing.

We run the risk of becoming a more affiliate-like industry, where a relationship is non-existent. Nothing wrong with affiliate marketing, it’s just not Multilevel Marketing. An automated sales channel can generate purchases, but in an industry that banks on repeat purchases of premium products, a non-relationship sales channel collapses quickly. We’ve all seen Distributors, and even some companies, launch highly touted automated systems that will bring in thousands of leads and close them with some fancy Flash presentation. If such a strategy is not tethered to a relationship, our industry loses. Automated-relationshipless channels equal skepticism and attrition. Relationships equal results.

I was once told to never forget that Multilevel Marketing is about people sitting kneecap to kneecap, that Multilevel Marketing is about relationships. Our industry needs a renewed emphasis on kneecaps – the real place where sales are made and consumer loyalty is forged in our industry. Multilevel Marketing products are best sold in a conversation… whether it be face-to-face, over the phone, or online, doesn’t matter. What does matter is that a relationship is renewed, created, or strengthened. It’s in this relationship that MLM products are bought and sold. 

Do not forget that you’ve chosen to share your story through Multilevel MARKETING. You have an exclusive premium product, distributors that dream big, a life changing opportunity – you have a story worth sharing. Use marketing to your advantage.