Network Marketing (or multi-level marketing) is, by definition, simply a marketing strategy that allows a company to pay nonsalaried distributors, agents, franchisees etc a commission on direct sales of products or services. The commission, or compensation plan as it is often referred to, will vary in the same way that the company’s products will vary but, given the huge amount of reputable and successful businesses out there following this model, network marketing is clearly here to stay. What’s more, unlike ‘direct sales’ that tend to be one-off high cost purchases (think double glazing), network marketing, or referral marketing, relies on a relationship of trust between the salesperson and the customer.
So why does the term ‘network marketing’ send some people running for the hills? In a nutshell, because they confuse it with illegal ‘pyramid’ marketing scams that have made headline news. Network Marketing is not illegal – it provides genuine products for genuine prices, and there won’t be many people who haven’t heard of firms such as Tupperware, Avon, Discovery Toys, Linen-at-home, Mary Kay and endless others. Although promoted as ‘party plans’ these are all in fact network marketing schemes that allow distributors to choose their own hours of work and be compensated according to their sales. In fact, many people prefer this way of starting their own business because they tend to have low entry costs and few, or no, overheads.
For many network marketers, the tried and trusted methods of lead generation will continue to work effectively. Working their ‘warm’ market by contacting family and friends, referrals from their ‘warm’ market and happy customers, ads in local newspapers, handing out business cards, ‘opportunity’ meetings, free samples, trade shows, business groups that offer networking opportunities etc etc. There is nothing wrong with this method, and most network marketing companies will promote this method of selling in their training sessions and promotional literature. There will also be many distributors following this method who have made a good living from their mlm business.
For today’s serious network marketer, however, there are many more opportunities available to them than just these ‘direct’ methods and, in recent years particularly, with the increase in internet entrepreneurs and the downturn in the economy leading to the creation of more and more home businesses, online network marketing, referral marketing, mlm marketing etc have become everyday buzzwords to the keen marketer. The pathway to earning big money in network marketing is through growing a combination of both customers and distributors, and the internet provides almost unlimited opportunities to generate leads through either free or paid-for advertising, opt-in pages, free giveaway products that will encourage prospects to visit their website, auto-responder e-mail series, blogs, social forums, video forums such as u-tube etc etc etc.
In summary, there is no reason at all why we need the internet for network marketing but, for today’s savvy marketers, we must certainly consider it as a serious marketing tool.
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