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This has always intrigued me because both are simply business models. The goal of each is to build a network to distribute a product. The product could be the opportunity to network with other business people (for the purpose of growing ones own business), the other is used to distribute all manner of things such as cleaning products, utilities, health supplements and travel.
The goal in each case is to grow a business and to make profits. Both are great models and both work. Some members of business networking groups have more success than others and some quit and claim that they don't work. The same goes for network marketing.
And yet, despite using an almost identical system, only one of these business models actually pays the people that are really responsible for growing the network. I'll let you make up your own mind as to which is the fairest.
Food for thought?
Great article and valid points.
ReplyDeleteGREAT that you open this discussion Jon - its (still) needed, very much, out there - so thank you!!
ReplyDeleteFirst of all I must say that I agree with you, 100% - and it would function well, and make people money - in a perfect world, that is ;-)
The problem, as I see it - is the way that the Networkers are "trained" (and/or lack of it)!!
Network Marketers is, for the most part, "trained" to believe that its a "get rich quick" kind of business - a numbers game.
They are showed the snowball effect - become greedy - and only think of growing their downline as big as possible, as fast as possible.
Most of the training material I see, from a lot of MLM companies, actually encourage spamming - some without even realizing that thats what they do!
Business networkers is often not even trained in any way, they are just seeing the big potential on the internet, to get their name/brand out to as many as possible, as quick as possible - and the totally forget to listen to what is said out there, and worst of all;
they forget to ENGAGE!!
Marketing is not a 1-way-street anymore, its not B2C - but more C2C, and thats a really big mind-shift that many find it hard to really get under their skin!
In both cases online networkers are worst of course - as they are taught to see the internet only as a tool to reach millions of people with one click - forgetting (in the rush of their numbers-game) that every time they touch that keyboard, they are interacting with People, not only "using technology"!
Imagine the "spamming kind of numbers game" IRL:
just passing strangers on the street, quickly giving them your business card or sign up form for your MLM business, and then move on - would that make you any kind of business do you think ??
Of course not!!!
Its ALL about RELATIONSHIP BUILDING - both in Social, Business and Marketing Networking!!!
Building rapport, trust and a connectedness!!
Like Penny Power (founder of Ecademy) says:
Know Me - Like Me - Follow Me
Or Ivan Misner (founder of BNI) agrees:
Turning strangers into friends - and friends into customers.
Its a 3-step formula - building a relationship!
Even in life:
courting, engaging, marrying ;-)
Some, like Thomas Power (co-founder of Ecademy) says that its like the law of 36 months:
in average each of the 3 steps takes about 12 months (1 year).
So the speed of the internet is NOT the key factor here - it doesn't slow down the 3 steps, it just makes it easier to even start the process / finding the prospects!
ITS ENGAGING TIMES PEOPLE - LETS TALK!!
(if you only talk to me, I will probably only talk about you ;-)
PS:
ReplyDeletejust noticed your pic at the top here after - where you are saying:
"Members rewarded financially for growing network" - is NOT applying to Networking/Referral organisations.
IMHO thats not true at all !!
In business networking you might not see INSTANT ECONOMICAL GRATIFICATION - but then again; does that really apply to Network Marketing ??
In business networking you have to saw before you reap, thats true - but that certainly also apply to NM (aside from the first pack you might be lucky to sell to the customer (which then might be a on time thing ;-)
Besides long term investment in networking, some business networks actually DO pay you to grow the network!
At least The Social Business Network Ecademy has a referral plan!
So as a professional networker, here is my link;
http://www.tinyurl.com/powermember ;-)
So YES you can be rewarded monetarily to grow your network - just always keep in mind not to get into it for the short term economical gratification- but with the mindset:
WINNING by SHARING!!
(Leon Benjamin)
or
GIVERS GAIN
(Ivan Misner)
I would also like to comment on:
ReplyDelete"Business networking and referral organisations, both online and offline, often take a "no network marketing/multi-level marketing" stance. Groups like BNI, 4Networking, Ecademy and LinkedIn are a few examples."
In general thats true (or used to be) - but its not the whole truth!
First of all, the networks that you mention are really different!
This is my classification of them:
BNI - a referral network (offline only)
Ecademy - a community (both off- & online)
LinkedIn - "Yellow Pages" *) (online only)
4Networking - I do not know
*) now starting with some actual networking possibilities (forums, event posting etc.)
If BNI has a policy for MLM I do not know - but IMHO they work kindda in the same way:
referring people whether they like/trust them or not - so its all about selling too.
Ecademy, as a community, is ALL about knowing, liking, trusting - and then as a second, comes the selling.
Thats why "The MLM way" was not allowed in the past - but now with a more open attitude to the industry (as long as you only try to sell to people that you actually know, and who has asked for your info = not the usual spamming way).
LinkedIn has A LOT of MLM´ers - also in the spamming way (mostly as its not too easy to report spammers there, I think).
Hi Tina,
ReplyDeleteThank you so much for your comments.
In any industry there are good and not so good companies with good and not so good workers. Network marketing is no different.
When somebody researches a network marketing business they should look at the training that is provided.
Even so, some, and particularly those that are new to the industry, will ignore training and try to do things their own way. That is also true of members of networking groups.
I agree that business is about building relationships. However, I have built some incredible relationships in far less time that 12 months!
Tina, regarding your comments about my statement "Members rewarded financially for growing network", you miss my point. What I mean is they are not financially rewarded for increasing the number of people that are purchasing a product.
ReplyDeleteNetworking organisations are businesses and make profits by becoming bigger. I'm not suggesting that is wrong but I am saying that the people that build the membership base are not directly rewarded for doing so. In network marketing, when a member of the network makes a purchase the people that built that network are financially rewarded.
Hi Tina,
ReplyDeleteregarding your comparison on the organisations that I mentioned.
I simply chose these as examples as they are some of the most well known in the UK... and they are all businesses that are in business to make a profit.