Direct selling’s perception problem is largely self-inflicted
Word count: 838
By: Steve Jamieson
Since the Federal Trade Commission (FTC) announced the AdvoCare settlement, the reaction from many industry executives, attorneys and experts has followed a common theme: “The regulators do not understand our industry, and AdvoCare and their distributors are the true victims—not the people the government is purportedly trying to protect. We are right, and they are wrong!”
This is one of the times Dr. Phil would say, as he often does to those who struggle to cope with the reality they are living in, “Okay, so you are right. How’s that working out for you?”
The answer is that it’s not working out so well. That’s because we can’t solve a problem when we don’t recognize that we are not the ones defining it. While we may vehemently disagree with the government’s less-than-flattering definition of network marketing and argue they have a perception problem, the truth is that they have made it our reality.
If we start from the perspective that we are right and the government is wrong, then we approach the problem with a different set of solutions than if we were to look at our industry from their perspective. In other words, if we could change the government’s perception of network marketing, and turn around general public opinion, why wouldn’t we want to do that?
Regulatory agencies and the public have similar perspectives about network marketing, and both are negative. Instead of continuing to insist we are right, we should ask why this shared negative view is also becoming more deeply embedded in our culture through various media presentations.
I believe the answer to be quite simple: Our compensation plans are at the heart of our perception problem, and therefore, largely self-inflicted. We can argue very passionately that there is nothing inherently wrong with paying people to find other people to sell our products, and once again we would be right. But I’d ask the question again, how is that working for us?
While we may want to deny that we pay people to sell our products, and that we pay people to recruit people to sell our products, the government and the public are saying it in powerful and distinctive ways with negative connotations.
The government’s answer to our refusal to change our comp plans is to work more aggressively in taking legal action, and the public’s answer is to work in alternative income opportunities.
Yet, our resistance remains strong. We continue to use binary compensation plans that are hard to explain to the public and difficult to defend. Companies continue to sell upfront product packages with fast-start bonuses and encourage people to purchase a certain amount of product every month in order to get paid.
Often the initial answer to this growing threat from both the government’s legal action and the accompanying public perception is to better police distributor behavior with newer and more sophisticated technology, education, and training in order to elevate the professionalism of the salesforce and inspire people to encompass a stronger moral and ethical code. Then we hire attorneys to scrutinize marketing plans to ensure compliance.
Perhaps we should consider, instead, changing the way we think about our compensation plans and begin to make serious changes, so the unending wrath of government intervention finally ends and network marketing stops being the expected cultural punch line.
Other fast-growing gig economy income opportunities have demonstrated there are several variations on the “psychology of attraction” associated with income opportunities. It is no longer limited to Napoleon Hill’s “Think and Grow Rich.” Today, people are more satisfied thinking about supplementing their income.
They are not trying to reach a flashy lifestyle, but are rather seeking a second income that allows them more time to enjoy their friends and family. The certainty of income has become more attractive at the front door of a part-time opportunity than the uncertainty of chasing a dream.
However, what remains unique about network marketing is that someone can turn a side hustle into a full-time opportunity that can surpass their current position. It is difficult to do that with Uber or Airbnb.
Network marketing can attract people in the front door with more realistic and relevant compensation plans on the front end, and then we can use our ability to grow people on the back end of a full-time opportunity.
The FTC is wrong about network marketing, who we are and what we can do for people, but if we respond as if they are right, we have an opportunity to be the best opportunity in the gig economy.