Sunday, December 1, 2013

Network Marketing? Or Cargo Cult Marketing?

Ever heard of Cargo Cults? No? It's a cult (alternative religion) that evolved during WW2 in Malenesia (little Pacific Islands) where the natives evolved a religion based on airplanes dropping huge amounts of cargo out of the sky and if they pray and march and wear the right uniforms and build "runways" or "fake airplanes" the great plane will come and give them more cargo. And yes, they're still around.

Cargo Cult of the Pacific, via
Those of us who know a little history would realize that those were WW2 supply missions where transport planes drop supplies for our troops that probably went off course for one reason or another.

Cargo cults existed for 50 years and no great planes have appeared since WW2. Yet it persists. Why? Because they *wanted* to believe, even though it doesn't work and hadn't worked for 50 years. They keep doing the same thing.

Richard Feynman coined the term "Cargo Cult Science", where people are doing apparently scientific research, studies, theories, etc. trying to explain some problems and propose solutions, except they have tried for decades, and nothing has worked. He was referring to criminal science (how to reform criminals) and pseudo-science such as ESP. Things have NOT improved for those fields. It's gotten WORSE.

Network Marketing is the same way. It is really "cargo cult marketing" because in most cases most network marketers only know how to indoctrinate as many people as possible and hope they make you rich. All the junior reps are recruited through "edification" of the top reps, and was given the message: monkey see, monkey do. (i.e. you can be me if you do what I do) even though there is no proof that doing what they did is the key to success.

Only a few PROFESSIONALS realize the truth and try to do it the right way. VAST MAJORITY of people are doing it wrong, and they are either ignorant... or simply don't care. They see their own success as "proof" of their own brilliance, not realizing they are simply lucky... or good at OTHER things... such as recruiting or cult indoctrination.

And that's exactly what a cargo cult does. They do what their "ancestors" did even though there is no proof and no reason it would work.

But there's more... the CULT aspects.

Network Marketing had ALWAYS been plagued by MANY deep-seated problems, two of the most problematic was lack of profit by the affiliates, and cult-ish behavior.

Study of most network marketing companies' income disclosure statement shows that well over 90% of all participants make less than US Median Personal Income on commissions paid by the company. While there can be some "retail profit", there is no proof of such, and network marketing does NOT require proof of retail, merely the INTENT of such. And that's before we counted any expenses.

I have yet to see ONE company that can prove it has profited MOST of its participants... except true direct selling companies (not multi-level). Indeed, such income disclosure statements seem to suggest that vast majority of participants LOSE money in network marketing, not earn it. And this has been the case since the advent of Amway, up to today's big-name MLMs such as Vemma, Herbalife, and so on.

Then there's the cult-ish behavior, leading to a new term called "cult sales". Amway had been long accused of cultish behavior when a lot of local Amway Support Organizations turned into cult of personality, that use cult tactics to keep members keep buying products they don't use, sales aid they don't need, and so on and so forth. It took Amway a decade to rid itself of that image, and even then it's often resurrected in investigative reports.

Yet modern MLMs such as Vemma and Herbalife often have VERY similar tactics. One such cult was documented in Israel operating on Herbalife, while there were many reports of cult-ish behavior by Vemma members, leaving their family and partner behind in their chase of success and so on.

Yet you see new MLMs started every day, using the same tactics: same multi-level comp plan (with minor variations, like matrix, unilevel, jump over, X-up, blah blah blah), using the same cult language (avoid the dream stealer, you just don't understand us, this will revolutionize _____...).

Then there's this story about Mary Kay's indoctrination. Apparently Mary Kay *hates* woman wearing pants, so all the top reps only wears dresses or skirts. And they try to indoctrinate all the junior reps to NEVER show up at MK meetings wearing pants (heh?) 

The truth is Network Marketing have been doing the same thing for 40 years and it hadn't worked as well as they expected.

The Franchise system, which started at about the same time as Network Marketing, with big names like McDonalds, Burger King, KFC... etc., with its MUCH HIGHER barrier of entry (as most franchises cost much more than Network Marketing) is 33 times LARGER than network marketing, according to one MLM veteran.

Instead of improving the system, they have improved the cult indoctrination.

That's why it's more "cargo cult marketing" instead of "network marketing".

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