Network Marketing Is Attractive But Needs Careful Implementation

What is network marketing?

Network marketing is a business model that depends on person-to-person sales by independent representatives, often working from home. A network marketing business may require you to build a network of business partners or salespeople to assist with lead generation and closing sales. It is a method of marketing that relies on individuals harnessing their personal networks to grow a business or sell a product. These networks are used to generate leads and recruit customers or partners, usually implementing a training and mentorship process for new recruits. It involves a pyramid structured network of people who sell a company’s products (Su 2020).

How to Implement a Successful Network Marketing Strategy?

Many people are scared away from network marketing, also known as multi-level marketing (MLM), because of all the myths and misunderstanding about this type of business. Part of negativity comes from reported low MLM success rates. However, a multi-level marketing business isn't destined to fail any more than any other business. Regardless of the home business, you start, success comes from doing the work to build it (Zhou 2018).

Tips to implement a successful Network Marketing Strategy are as follows:

1. Brush Up on the Realities of MLMs

To stay safe from pyramid schemes and MLM scams, arm yourself with knowledge. Learning about the direct sales industry as a whole, research MLM companies carefully, and determining if you're a good match with your sponsor. The truth is, while one can get rich in MLM, statistics show that less than one out of 100 MLM representatives actually achieve MLM success or make any money. However, that's not necessarily the MLM business' fault (Zhou 2018).

2. Finding a Company With a Product You Love

Too many people get caught up in the hype of potential big income from MLM, that they don't pay enough attention to what the company is asking you to sell. You can’t sell something or share your business if you don’t genuinely have pride in what you are representing. Do your MLM research and partner with a company that has a product you can get excited about. Don't forget to look into the company's compensation plan before you join and make sure it is favorable to you (Smith et al. 2016).

3. How does network marketing work?

Network marketing is a business model that depends on person-to-person sales by independent representatives, often working from home. A network marketing business may require you to build a network of business partners or salespeople to assist with lead generation and closing sales. Network marketing companies promote and sell their products directly to customers, rather than through a well-defined distribution channel. The participants are given the job of selling the items, and they are paid a commission for each sale they make (Zhou 2018).

4. Pyramid schemes vs. network marketing

Multi-level Marketing (MLM) or network marketing, is individuals selling products to the public - often by word of mouth and direct sales. The main idea behind the MLM strategy is to promote maximum number of distributors for the product and exponentially increase the sales force. The promoters get commission on the sale of the product as well as compensation for sales their recruits make thus, the compensation plan in multi-level marketing is structured such that commission is paid to individuals at multiple levels when a single sale is made and commission depends on the total volume of sales generated (Cardenas and Fuchs-Tarlovsky 2018).

Pyramid Schemes are, however, fraudulent schemes, disguised as an MLM strategy. The difference between a pyramid scheme and a lawful MLM program is that there is no real product that is sold in a pyramid scheme. Participants attempt to make money solely by recruiting new participants into the program. The hallmark of these schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same (Hidajat et al. 2020).

5. How do you build a network marketing team?

To build a network marketing team, it is about embracing everyone in the journey and supporting them. The best way to grow a team is to find people who share your vision and values, and then help them achieve their goals. Network marketing is all about building relationships, so you need to be able to communicate effectively with your team members. The team members are not employees, so it is important to remember they are equals. One also needs to ensure that everyone on the team has clear expectations. It doesn’t matter whether they use written contracts or verbal agreements; both methods are effective ways to set up expectations between self and the recruits (Trpeski and Korunovska 2021).

The important thing is to make sure that they are treating people like people and not numbers. This means to understand the dynamics of the people in the organization. Once people start to reach a certain part of a point of activity in their organization, there’ll be certain markers. Maybe they might call it the core rank, it’s a certain amount of sales. But beyond that, there’s things that certain people will do that will catch the eye (Tyre 2016).

6. How do network marketers get leads?

By creating videos that help solve a problem for the audience, one can capture the attention of so many new people. YouTube is one of the most effective lead sources because like Google users are searching for answers to their problems. They are looking for guidance and solutions to problems they may have (Rezvani, Ghahramani and Haddadi 2017).

LinkedIn now has over 500 million users globally, making it a popular place to collect new network marketing leads. One must make sure before they begin any networking for their business on LinkedIn is to set up their profile and keep it up to date, so that it looks professional with a high-quality photo and details about the company and what one does. By contributing valuable information to the groups, one will notice people start to reach out and express interest in the business. As soon as one can, they must move the conversation to the phone to determine if the individual is the right fit for their business. Another way to do things on LinkedIn is by searching for contacts who fit the target audience using specific keywords and then connecting with those people. This is a great way to grow the network (Rezvani, Ghahramani and Haddadi 2017).

References

Cardenas, D. and Fuchs-Tarlovsky, V., 2018. Is multi-level marketing of nutrition supplements a legal and an ethical practice?. Clinical nutrition ESPEN, 25, pp.133-138.

Hidajat, T., Primiana, I., Rahman, S. and Febrian, E., 2020. Why are people trapped in Ponzi and pyramid schemes?. Journal of Financial Crime.

Rezvani, M., Ghahramani, S. and Haddadi, R., 2017. Network marketing strategies in sale and marketing products based on advanced technology in micro-enterprises. International Journal of Trade, Economics and Finance, 8(1), pp.32-37.

Smith, D., Hernández-García, Á., Agudo Peregrina, Á.F. and Hair Jr, J.F., 2016, July. Social network marketing: A segmentation approach to understanding purchase intention. In Proceedings of the 7th 2016 International Conference on Social Media & Society (pp. 1-10).

Su, Y., 2020, July. The Opportunity, Predicament and Outlet of Academic Book Network Marketing in the New Media Era. In International Conference on Frontier Computing (pp. 1485-1492). Springer, Singapore.

Trpeski, P. and Korunovska, V., 2021. MANAGEMENT AND NETWORK MARKETING. KNOWLEDGE-International Journal, 45(5), pp.1089-1093.

Tyre, T.A., 2016. Network marketing essence of success: An interpretative phenomenological analysis (Doctoral dissertation, University of Phoenix).

Zhou, X., 2018, January. Research on The Marketing Strategy of Suning. com Network. In 2017 7th International Conference on Social science and Education Research (SSER2017) (pp. 225-228). Atlantis Press.