Thursday, June 16, 2016

Commentary: How "Ultimate Guide to Network Marketing" illustrates what's wrong with Network Marketing

I often browse used bookstores, and one day I came across "Ultimate Guide to Network Marketing" edited by Dr. Paul Rubino. As the MLM Skeptic, I read it with a skeptical mind...  Overall, I am rather... disappointed. While several of the authors out of 37 did dispense practical advice, such as how to utilize modern tech like autoresponder and such, while others laid out do's and don'ts on what to say in a sales speech, ZERO discussed what's legal and what's not legal.

"Pyramid scheme" was NEVER discussed, other than as an resistance to be overcome, as doubt in a prospect that must be quashed, and so on.

Product-based pyramid scheme was never mentioned.

In fact, the entire book is devoid of definitions other than odd backronyms like WOO = window of opportunity. There is no glossary, just an index.

Consider the implication: how would the network marketing noob know what's legal and what's not if it was NOT discussed in a so-called "Ultimate Guide to Network Marketing"? How "ultimate" can this guide be if legal stuff was not discussed at all?

Furthermore, many of the chapters were about belief / faith. Belief in oneself, belief in product, belief in company, belief in team...  Belief involves TRUST. What happened to due diligence? Common sense? What makes the company, product, or team members WORTHY of trust?

This is basically a collection of "business porn"... written by network marketing "leaders" who claimed success through effort even though they can't prove that their success was a result of their effort. Anything they wrote are results of survivorship bias and self-serving bias, but people starting in network marketing believe these to be words of wisdom, and indeed, many of the 37 articles advocate "just ape what I do" or "create system that can be easily aped"

In fact, one article is about how to CREATE business porn... awards, recognitions, newsletters, mailing lists, podcasts, Youtube videos, and so on, as marketing vehicles.

Would you really consider "monkey see, monkey do" to be wisdom?  The entire book is thin on actual practical advice. Most are motivational talk and how to customize such for your particular market (i.e. your prospects). Again, it's business porn, and it does NOT help.

Just as porn is not sex but sexual fiction designed to titillate, business porn is NOT business advice, but sales pitch designed to motivate.  Porn is fine in moderate doses, but porn addiction is serious problem. Similarly, business porn is fine in moderate doses, but business porn addiction will simply depress you as you constantly choose to compare yourself to leaders, trying to ape them, without understanding WHAT made them successful (often, it's just luck) and what price did they pay (which is NOT depicted).

The book basically is all about trust, and duplication, with a few bits of sales techniques and marketing vehicles covered, but has ZERO advice on what to look for, how to spot good from bad, and how to spot legal from illegal.

The implication is very troubling: if this is the sort of book written by top network marketing professionals, network marketing is about faith and recruiting, not about sales and earning trust.

Sunday, June 12, 2016

Cognitive Bias: Choice Supportive Bias (aka Post-hoc Rationalization)

Previously we have often talked about cognitive dissoance, which is basically when a person is faced with two sets of "truths", and they conflict, therefore one set of which must be false.

For example, let's say the person has joined a suspect scheme, and is withdrawing money bi-weekly, but not yet achieved breakeven. Then he's exposed to a source that explained that the scheme is a scam with trustworthy sources.

So, how does one resolve this conflict between two sets of facts... a) the scheme works, I am getting paid  and b) the scheme is a scam ?

One way the conflict can be resolved is through "choice supportive bias", also known as post-hoc rationalization. As the person is already in the scheme, the person is likely to choose to continue in the scheme and therefore decide that the trustworthy sources (that explain the scheme is a scam) are NOT acceptable.

Basically, the person wants the answer to be "scheme is fine" and thus chose that outcome, and came up with reasons to discount the trustworthy sources post-hoc (after the fact). Normal logic is  check all the sources, then arrive at the conclusion. This is the reverse... The person know the conclusion s/he wants, then come up with the reasons later.   It's motivated thinking.

As you can probably guess, motivated thinking means more often than not the person will reach the WRONG conclusion, since the conclusion was NOT deduced from logic, but emotion.

Let's look at some examples...