Is Multilevel Marketing a Successful Business Growth Strategy?
Let's give it a try, and find out.
You probably know “multilevel marketing” by its more familiar, pejorative term: “pyramid scheme.” Essentially, companies that utilize a multilevel marketing strategy recruit new members to sell their products, and to also recruit additional members to sell products. A typical compensation system associated with this model provides incentives not only for selling products, but also for recruiting new members.
Well-known companies which have largely adopted this sales strategy include: Amway, Mary Kay Cosmetics, and Herbalife. These marketing strategies are not illegal, but, if you are considering utilizing this approach, you should enter into it with your eyes open, and deep pockets, and a deep bench of attorneys, who can fend-off the inevitable inquiries from the Federal Trade Commission and the Securities and Exchange Commission, as these companies have had to do.
At this point in its brand lifecycle, the Rule of Three marketing team is considering strategies designed to increase brand awareness, and seeks ubiquity, enabling ready access to every man, woman, and child in North America (a/k/a “world domination”), much like the turf Apple has staked-out for its iPhone. The Rule of Three product development team believes that its product line, with 122 weekly columns safely stored away in its archives, and with a steady pipeline of fresh, award-winning columns due to be delivered each week, stands ready to be heavily-marketed (I’ve heard them clanging about in the break-room, playing ping-pong, and devouring the free snacks generously provided by this organization, shouting out rallying cries such as, “Let’s market the crap out of this thing!”)
Given that boundless enthusiasm, it’s our job to harness that energy, and “market the crap out of this thing!”
Multilevel marketing strategies are not, of course, the only path available to us. Other marketing alternatives we considered included:
Bus-wrap advertising - this form of advertising can be quite eye-catching, and memorable, and in decent-sized metro markets, can attract a significant amount of consumer attention. Upon closer inspection, however, we opted not to utilize this approach, due in part to the alarming frequency of buses in the greater Pittsburgh area to tumble into sinkholes, and to fall into ravines, as bridges carrying them collapse. I mean, sure, that kind of event garners immediate attention, as the buses are hoisted up into the air, and placed back on solid pavement, particularly if the President of the United States happens to be in town, but that moment is fleeting.
Large inflatable gorilla - renting the large inflatable gorilla appears to be a popular advertising alternative favored by auto dealers, and cell-phone providers, but honestly, I’m not sure that my HOA would approve of the placement (even though I would argue that it’s only temporary) of such an object in the neighborhood - although the kids would probably dig it!
Direct mail flyers - I noticed that this option was heavily utilized during the recent political campaign, as my mailbox was flooded with these pieces every single day. The hallmark of these advertising pieces was that the tone was overwhelmingly negative, aimed at pointing out the moral failings of a political opponent, rather than touting the benefits of the candidate himself. First of all, I don’t know all that much about my Substack colleagues, because they don’t come around much (maybe they’re not aware of the ping-pong games, and the free snacks), and, I’d feel more comfortable mounting a positive campaign, highlighting the many wonderful attributes of Rule of Three, rather than suggesting that “Columnist B,” for example, has been convicted of bank fraud, or that “Columnist C” is on his fourth wife (and this one is not likely to take either), or that “Columnist D” has been videotaped having intimate relations with a goat (likely a negative, unless the title of “Columnist D’s” weekly column is “A Compendium of My Intimate Relations with Goats.”
As you can see by the graphic atop this column, the most significant benefits derived from a multilevel marketing campaign accrue to the guy at the top of the pyramid, highlighted by the label “Making Money;” that sounded pretty good to me, until Rule of Three’s finance management team pointed out that a subscription to Rule of Three is free of charge, and they wondered how, exactly, this campaign would be “Making Money.” I’d be the first to admit that we haven’t worked out all the bugs yet.
And, as for you, being a current subscriber already, you appear in that next row down in the pyramid (you know, the gray-colored guys). It’s not clear to me whether or not you will be “Making Money,” or “Losing Money,” the label affixed to the guys in the bottom row, which is likely why the color gray was chosen - it’s kind of a gray area. The guys at the bottom appear in red, which makes sense given that they will be “Losing Money” - I’ve no idea why blue was chosen for the guy at the top of the pyramid - green would have been a more logical choice, I think. But, you’ll notice that he appears to be bathed in yellow sunshine, which I kinda’ like.
In any event, we’ve made up our minds - it’s full-steam ahead with the multilevel marketing campaign. And, here’s how you can participate in this grand experiment: influence, convince, or otherwise cajole your friends, and family, and acquaintances into subscribing to Rule of Three. The weekly sales quota for you, and every subscriber, including me and the rest of the Rule of Three staff, is to produce at least ten new subscribers. How you accomplish this task is entirely up to you - I hear social media can be quite an effective tool for messaging these days. I would suggest that you stress the fact that a subscription to Rule of Three is entirely free; and, nothing is required of subscribers, other than to read the weekly column; and adhere (as much as is humanly possible) to the three foundational precepts espoused by Rule of Three (you know: “Secure a beverage; don’t be a douchebag; and amuse yourself”). You might also indicate that, as a subscriber, Rule of Three will never require them to sell home cleaning products, or cosmetics, or nutritional products (we may ask that they participate in occasional multilevel marketing activities - i.e. seeking additional subscribers, but cloaking that requirement in secrecy is apparently an intentional strategy linked to multilevel marketing campaigns, so, feel free to respond evasively when questioned on that particular issue). And, as you know, each column features a button at the bottom, which allows you to instantly invite others to subscribe.
In addition to instant access to the wide, wonderful world of Rule of Three, and all that it has to offer, you could extend an invitation to all new subscribers to visit us in our lavish office space, grab a free snack, and play a game of ping-pong or two. Given IRS restrictions, we are probably unable to offer free access to the Rule of Three jet, at this time.
A successful multilevel marketing campaign will ensure that you remain in the “gray area,” by positioning new subscribers beneath you in the pyramid. - so, there’s your sales motivation right there: “I need to preserve my gray status.”
A marvelous illustration of the power of multilevel marketing surfaced for me just a day or two ago, in the form of a heartwarming story in the Post-Gazette about a star pitcher on the Pittsburgh Pirates’ 1960 World Series-winning baseball team, Vernon Law. Vernon, and his wife, VaNita, have six children, who in turn have produced thirty-one grandchildren, and 59 great grandchildren, and 3 great-great grandchildren (a number sure to grow). Vernon and VaNita are represented by the blue guy (bathed in yellow sunlight), and their six children reside in the gray area. If this family keeps reproducing at a rate at which I’m sure they’re capable, even those three great-great grandchildren (as well as their future siblings and cousins) will eventually slip into the gray area.
Our goal is modest: first, we grow the number of subscribers to a level at which the Rule of Three senior management team won’t be embarrassed discussing it at cocktail parties; then, world domination! (I know what you’re thinking: “Wait, shouldn’t there be a third step shoehorned in there?” Sometimes, two is the right number).
So c’mon, let’s “market the crap out of this thing!”
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