GAMES MLMers PLAY - And Why Gary Halbert Hated MLMers.

16 replies
I don't hate MLMers. Gary did.
I see it as just another "business model"... but one where you can jump into for a small amount of cash... as oppose to buying a franchise to sell hamburgers.

But over the years, offering the service of marketing help to dudes and dudettes with "MARKETING" in their name (Multi-level-Marketing) or (Network Marketing)... it's surprising how little they understand "marketing costs".

Every business... that is... every business... let me repeat... every business has selling costs and marketing costs... even the MLM business.

Generally speaking, no matter what kind of business you're in, selling cars or card board boxes, you can expect at least a 20% costs of sales column in your financial records at year end.

And many MLMers expect to get sales "for free"... but boy are they mistaken.
If you have no marketing budget, then you're going to spend TIME, TIME, TIME, digging up the leads and converting them to cash and your TIME must be worth something. Right?

One of the "Games MLMers Play" ... at least with me... is they sometimes say... "Wow, Mr. Austin, if you're so good at marketing, why don't you just sign up with me and we'll both get rich."

Aren't they just cute? Never mind all the time and money I've invested in myself, my brain, and my level of skill and expertise, to be able to navigate my way around multiple marketing problems.

I should get them all in a room at the same time, and let them all shout out in four-part harmony: "Wow, Mr. Austin, if you're so good at marketing, why don't you just sign up with me and we'll both get rich."... "no me"... "no me" ... "no me".

Gary hated MLMers as they did not have the $15,000 bucks to hire him to write a sales letter.

And, it also cost time, time and more time, to educate most MLMers to understand the value of "direct marketing"... online or offline, and so, MLMers are as frustrating as any other market for a old-fashion copywriting dude.

No matter what business you're in, you're going to have SELLING COSTS involved.

The goal is to lower your "cost per lead" and your "cost per sale".

I don't hate MLMers. In fact, I'm sympathic to their challenges.



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  • Profile picture of the author GordonJ
    Originally Posted by AdmanMrWoo View Post

    I don't hate MLMers. Gary did.
    I see it as just another "business model"... but one where you can jump into for a small amount of cash... as oppose to buying a franchise to sell hamburgers.

    But over the years, offering the service of marketing help to dudes and dudettes with "MARKETING" in their name (Multi-level-Marketing) or (Network Marketing)... it's surprising how little they understand "marketing costs".

    Every business... that is... every business... let me repeat... every business has selling costs and marketing costs... even the MLM business.

    Generally speaking, no matter what kind of business you're in, selling cars or card board boxes, you can expect at least a 20% costs of sales column in your financial records at year end.

    And many MLMers expect to get sales "for free"... but boy are they mistaken.
    If you have no marketing budget, then you're going to spend TIME, TIME, TIME, digging up the leads and converting them to cash and your TIME must be worth something. Right?

    One of the "Games MLMers Play" ... at least with me... is they sometimes say... "Wow, Mr. Austin, if you're so good at marketing, why don't you just sign up with me and we'll both get rich."

    Aren't they just cute? Never mind all the time and money I've invested in myself, my brain, and my level of skill and expertise, to be able to navigate my way around multiple marketing problems.

    I should get them all in a room at the same time, and let them all shout out in four-part harmony: "Wow, Mr. Austin, if you're so good at marketing, why don't you just sign up with me and we'll both get rich."... "no me"... "no me" ... "no me".

    Gary hated MLMers as they did not have the $15,000 bucks to hire him to write a sales letter.

    And, it also cost time, time and more time, to educate most MLMers to understand the value of "direct marketing"... online or offline, and so, MLMers are as frustrating as any other market for a old-fashion copywriting dude.

    No matter what business you're in, you're going to have SELLING COSTS involved.

    The goal is to lower your "cost per lead" and your "cost per sale".

    I don't hate MLMers. In fact, I'm sympathic to their challenges.



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    MLM and IM share a few things:

    1) Low cost of entry. A sample kit, maybe in MLM, a website, maybe, in IM.

    2) No licenses needed, available to anyone.

    3) HIGH failure rate, maybe as much as 90+%. Because...

    4) Both are entered into by the under educated (in business), the desperate, the dreamer, the unprepared.

    I am NOT sympathetic to the challenges these people bring with them.

    First, Mr. Austin, you know the math, as you've demonstrated over and over as regards Remote Direct Marketing. Costs of customer acquisition is one of many MATH problems lost on these two groups.

    Both are a "numbers game", but the majority don't know WHAT numbers, or how to find them or how to use them.

    They enter unprepared and Most (majority) quit after a few months of frustration, failure and frazzle or in IM, keep at it 3, 5, 7 years and report back here about how hard it is...some even going a decade or longer trying to reach some IM hill top.

    Hate may be a strong word, but sympathy? Why?

    NOPE, I don't hate, nor do I sympathize, but mostly IGNORE as perhaps, most business people do these MLM/IM types of people.

    GordonJ
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    • Profile picture of the author kenmichaels
      Originally Posted by GordonJ View Post


      Hate may be a strong word, but sympathy? Why?

      NOPE, I don't hate, nor do I sympathize, but mostly IGNORE as perhaps, most business people do these MLM/IM types of people.

      GordonJ
      ......Ditto
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    • Profile picture of the author AdmanMrWoo
      Originally Posted by GordonJ View Post

      MLM and IM share a few things:

      1) Low cost of entry. A sample kit, maybe in MLM, a website, maybe, in IM.

      2) No licenses needed, available to anyone.

      3) HIGH failure rate, maybe as much as 90+%. Because...

      4) Both are entered into by the under educated (in business), the desperate, the dreamer, the unprepared.

      I am NOT sympathetic to the challenges these people bring with them.

      First, Mr. Austin, you know the math, as you've demonstrated over and over as regards Remote Direct Marketing. Costs of customer acquisition is one of many MATH problems lost on these two groups.

      Both are a "numbers game", but the majority don't know WHAT numbers, or how to find them or how to use them.

      They enter unprepared and Most (majority) quit after a few months of frustration, failure and frazzle or in IM, keep at it 3, 5, 7 years and report back here about how hard it is...some even going a decade or longer trying to reach some IM hill top.

      Hate may be a strong word, but sympathy? Why?

      NOPE, I don't hate, nor do I sympathize, but mostly IGNORE as perhaps, most business people do these MLM/IM types of people.

      GordonJ

      I LOVE YOUR POSTS...

      Speaking of knowing your "costs of customer acquisition" ... gotta tell you this story... I was a speaker at a MEMBERSHIP HVAC convention... during lunch, I'm at a table with several HVAC contractors. One contractor says to another, "What's your cost per lead and cost per sale?" ... Gordon, I nearly fell out of my chair... finally, a contractor who GETS IT...

      Turns out, this contractor was the first in Florida to get his trucks wrapped in that fancy signage thing which you now see everywhere. As I recall, he said the truck wrap cost about $5,000 bucks... but it was bringing him leads at about $17 dollars per phone call. (This, compared to his yellow page ads which brought him leads at about $250 per phone call.)

      He was a smart operator. Good at marketing and management.



      REGARDING MLMers... who need to market...
      I have a direct mail system in my back pocket that would "kick ass" for MLMers.

      I know where to get some highly responsive mailing lists of folks who are looking for a business opportunity... and I create "blind" letters to mail out to them. A "blind" letter makes them raise their hand, asking for more information about the opportunity. It's a system that has generated a 32% response depending on the right list.

      But with MLMers, it's typical to generate an income of about $10,000 a month, with just 100 people in your downline... and once you reach that income, you can coast for 5 or 10 years before your downline needs to be replenished.



      REGARDING MARKETING COSTS FOR MLMers:

      If the goal is to get 100 people in your downline, and generate $10,000 a month off of it... how much would be be willing to spend to get the 100 folks signed up?
      Using my direct mail method, you're looking at list rental, postage, printing, stuffing, creative fee, a little consulting... let's say it cost you $10,000 to get your 100 sign-ups... (it won't, but lets say it does)... then... you'd make your money back on the 2nd month. Right?



      Most MLMers won't spend a dime on marketing because the guy who signed them up told them "just reach out to your family and friends"... so they do... and then get UNinvited to Thanksgiving dinner.



      The reason it takes 100 sign-ups to get around $10,000 a month in income, is that 80 of those folks will be lazy and do NOTHING for you. But 20 will hustle. Good news.



      Just thinking.

      Linwood
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    • Profile picture of the author Claude Whitacre
      Originally Posted by GordonJ View Post

      MLM and IM share a few things:

      1) Low cost of entry. A sample kit, maybe in MLM, a website, maybe, in IM.

      2) No licenses needed, available to anyone.

      3) HIGH failure rate, maybe as much as 90+%. Because...

      4) Both are entered into by the under educated (in business), the desperate, the dreamer, the unprepared.

      I am NOT sympathetic to the challenges these people bring with them.

      First, Mr. Austin, you know the math, as you've demonstrated over and over as regards Remote Direct Marketing. Costs of customer acquisition is one of many MATH problems lost on these two groups.

      Both are a "numbers game", but the majority don't know WHAT numbers, or how to find them or how to use them.

      They enter unprepared and Most (majority) quit after a few months of frustration, failure and frazzle or in IM, keep at it 3, 5, 7 years and report back here about how hard it is...some even going a decade or longer trying to reach some IM hill top.

      Hate may be a strong word, but sympathy? Why?

      NOPE, I don't hate, nor do I sympathize, but mostly IGNORE as perhaps, most business people do these MLM/IM types of people.

      GordonJ
      Although I don't have anything against the MLM model....here is why it isn't interesting to me.

      You are selling a business model, complete with marketing and selling...to non-business people. And you are (by necessity) selling the concept as being totally without selling and marketing.

      Hate to sell? join an MLM....where selling is basically the job description.
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      • Profile picture of the author kenmichaels
        Originally Posted by Claude Whitacre View Post

        Although I don't have anything against the MLM model....here is why it isn't interesting to me.

        You are selling a business model, complete with marketing and selling...to non-business people. And you are (by necessity) selling the concept as being totally without selling and marketing.

        Hate to sell? join an MLM....where selling is basically the job description.
        I don't do MLM because I did it...once.

        I sold it by phone and got them to three-way call a friend (lead) and intro me...
        and I added them to the down-line. Another word I was building their down-line for them on the phone. My mistake was I stopped at five deep and gave them the same script and assumed they would all do it once I taught them how. Ya know because we could all get rich together.... Muhahahahahahahahaha

        Nobody works as hard as you do.

        Lesson learned - never again.
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        • Profile picture of the author Claude Whitacre
          Originally Posted by kenmichaels View Post

          I don't do MLM because I did it...once.

          I sold it by phone and got them to three-way call a friend (lead) and intro me...
          and I added them to the down-line. Another word I was building their down-line for them on the phone. My mistake was I stopped at five deep and gave them the same script and assumed they would all do it once I taught them how. Ya know because we could all get rich together.... Muhahahahahahahahaha

          Nobody works as hard as you do.

          Lesson learned - never again.
          I've been in a few over the decades. One I made money in. Real money.
          We were selling Alpine air purifiers for $600 each. It cost (I believe) $2,500 to get in the business, mostly for inventory.

          I had a friend who started in that company by recruiting 5 tested, established, successful business people. And he never recruited again. They each built a huge business. For several years, he was earning $500,000 a year with that company. He was the biggest distributor in the world (and it was a huge company). He had one full time employee who was in charge of shipping and receiving the air purifiers. He was selling that many.

          It was the only MLM I was ever in where it attracted salespeople, because real money could be made from selling at retail. And I did really well with it.

          But....most distributors in the company were non-salespeople...who bought in for $2,500 each, because they bought the idea that sales were automatic, that the demand was high.

          After a couple of years, my biggest chunk of money was made buying the inventory from inactive distributors for 20% of what they paid, and sold it myself. It was a heavily "front loaded" marketing plan, and that's where most of the money was made (in the company), loading garages full of unsold inventory.

          You and Kay are right. We make money because we have drive and skills. But the people several layers down, still making nothing.
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  • Profile picture of the author Kay King
    Hate to sell? join an MLM....where selling is basically the job description.

    Have posted something about this in the past but that brought it back to me.


    My first online venture was an MLM - I did quite well - made money - was in the top 10 and top 20 'earners' month after month (sound like more money than it was in reality)....built two sites to train my 'downline'. After a couple years I took a hard look at my downline of 3000 people and realized they were feeding MY success but very few were finding any success for themselves.


    I went into the MLM with years of sales experience so it never occurred to me I couldn't sell it. When I realized I was selling something other people could not succeed in....I quit the mlm and never joined another one.


    WAY back I was stumped on something Halbert had written - at the time I didn't know he was a 'big deal' - I sent him an email and said 'could you explain a bit - I'm tearing my hair out on this problem'.


    Halbert responded quickly with an email explaining the part i didn't understand....and the email began with 'at least you have hair'..
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  • Profile picture of the author Alex Cohen
    Originally Posted by AdmanMrWoo View Post

    I don't hate MLMers. Gary did.
    I see it as just another "business model"... but one where you can jump into for a small amount of cash... as oppose to buying a franchise to sell hamburgers.
    MLM is a business model that gives false hope.

    And in many cases it's cult like; turning family members against each other.

    Alex
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  • Profile picture of the author Claude Whitacre
    I'm making a prediction right now. Within a few months, many MLM distributors will claim that their stuff could cure Caronavirus.

    For a long time, it was almost a given that the excited MLMer would say that "I hear this could be the cure for cancer". I heard that so often it made my teeth grind.

    This isn't the companies saying this, but the over zealous distributors.
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    • Profile picture of the author myob
      Originally Posted by Claude Whitacre View Post

      I'm making a prediction right now. Within a few months, many MLM distributors will claim that their stuff could cure Caronavirus.

      For a long time, it was almost a given that the excited MLMer would say that "I hear this could be the cure for cancer". I heard that so often it made my teeth grind.

      This isn't the companies saying this, but the over zealous distributors.
      The F.D.A. has already warned any company not to promote claims that products such as teas and essential oils could help treat the coronavirus. There's at least a half dozen companies (non-MLM) specifically warned by the FTC and FDA.

      https://www.nytimes.com/2020/03/09/h...rus-cures.html

      Instead, it is more important to wash your hands and avoid touching your face, and to maintain healthy habits such as getting a good amount of rest, hydrating and eating fruits and vegetables.

      Such games and hype in marketing is seldom limited to just MLM distributors; they just seem to get most of the attribution especially here on the WF.
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  • Profile picture of the author Kay King
    Did you see the Jim Baker news? Remember the Jim and Tammy show - and the downfall from that? He's been trying to promote that silver 'stuff' as a cure and was told to cease and desist....once a scammer, always a scammer.
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    • Profile picture of the author max5ty
      Originally Posted by Kay King View Post

      Did you see the Jim Baker news? Remember the Jim and Tammy show - and the downfall from that? He's been trying to promote that silver 'stuff' as a cure and was told to cease and desist....once a scammer, always a scammer.
      And now he's being sued by the Attorney General of the State...
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    • Profile picture of the author kenmichaels
      Originally Posted by Kay King View Post

      Did you see the Jim Baker news? Remember the Jim and Tammy show - and the downfall from that? He's been trying to promote that silver 'stuff' as a cure and was told to cease and desist....once a scammer, always a scammer.
      Maybe he likes prison.

      To scam someone - meh - it takes a certain type,
      but to scam in a way that you know will cause loss of life.
      Ooof, that simply raises the bar in a way that I don't understand.

      I mean, these people aren't mentally ill...are they?
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  • Profile picture of the author myob
    It should be emphasized here that Jim Baker's horrendous scams never had a connection with any MLM company. There are bad apples in every industry. And, reputable MLM companies these days have become extremely focused on reigning in rogue distributors
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    • Profile picture of the author Claude Whitacre
      Originally Posted by myob View Post

      It should be emphasized here that Jim Baker's horrendous scams never had a connection with any MLM company. There are bad apples in every industry. And, reputable MLM companies these days have become extremely focused on reigning in rogue distributors
      I agree. In fact, in every instance where I have heard a claim made that's just not true...it came from an over zealous distributor, not the company.

      And yes, it's true in every industry, even my own.
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