Under what network marketing is disguised. How traditional business uses MLM methods
Seeing the success and speed of scaling network companies, traditional businesses everywhere have started borrowing and implementing MLM methods. Essentially, practically every modern organization, partially or fully, applies elements of MLM in its work, and many people don't even realize it. In the article, we will discuss what approaches traditional companies have adopted from network marketers.
Why Are We All "Deep into MLM"
The topic of attracting and retaining customers concerns every entrepreneur because having a base of regular and loyal consumers is the key to a successful business. As practice shows, MLM is most effective in this regard.Network marketing involves:
Engagement in something global. People like to be involved in something more magnificent, work in a team, collaborate with a well-known brand.
Mutual assistance. In MLM, a sponsor is interested in the development of personally invited partners, takes responsibility for the initial training and support of newcomers.
Building long, trusting, and mutually beneficial relationships with partners. By partnering with a multi-level company, one can be confident in the quality of the product being marketed, the stability, and the progressive growth of earnings.
Gamification. To motivate and engage newcomers, networkers have learned to transform business into a game.
We discussed the nuances of implementing gamification in a company in the article Network Marketing Gamification. How to Develop MLM Project.
Network marketing methods and their combination help significantly accelerate the development of any organization. Essentially, this is how a business gathers a base of loyal distributors of its product, organically increases recognition among a wide audience, and consequently increases the number of product/service sales.
Why network marketing methods are not openly used
Society has a rather ambiguous attitude towards the MLM phenomenon. At one time, some network marketing methods were used in fraudulent schemes. Essentially, most ordinary people simply do not know the initial principles of MLM and think that it is a deliberately cunning scheme to deceive ordinary people. The main principle of network business can be formulated in a single phrase:
To learn more about this topic, read the article on how to distinguish a network company from a so-called pyramid. Also, in the blog, we have addressed the issue of How MLM Methods Are Disguised in Traditional Business If we analyze the market from a networker's point of view, we will see that many companies use multi-level marketing in one form or another. Businesses have learned to modify MLM methods, adjust, and adapt them to their projects. Below we list the terms that entrepreneurs may use in an attempt to disguise their connection to network marketing: Partnership programs or affiliate advertising. This is a special form of collaboration with a brand, where a person places content with a project link on their resource and thus attracts people to the partner company's website. In return, for promotion, they receive bonuses in the form of fixed earnings, free products, or sales commissions. Affiliate programs can be beneficial to everyone - both corporations and small startups. The niche in which the company operates is also of no particular importance. For example, based on this principle, cooperation can be established with well-known trading platforms (Aliexpress, Rozetka), sellers of travel services (booking.com, AirBnb), banks (Tinkoff and Alfa), and so on. With the development of Instagram, influencer marketing has become very popular (a form of interaction with opinion leaders). Its essence lies in the fact that bloggers advertise the company in their videos/live streams or stories, and in return, they receive compensation (in the form of products or money). Essentially, this is a very veiled form of an affiliate program, especially when the compensation is in the form of the promoted company's product. Cashback. Refers to a situation where a person receives a fixed part or percentage of the amount spent back to their account when making a purchase. For example, the effectiveness of cashback as a promotional method was proven by the Ukrainian project Monobank. The team used it as the main "PR tool". In just a few years, Monobank became the third in the number of issued cards among Ukrainian banks. In 2020, they had 2.7 million customers, but by the end of 2022, they want to reach 5 million. By collaborating with an MLM company, a networker always receives discounts on its products. Essentially, cashback is a similar reward to a partner for a purchase. Promo codes. This is a unique combination of characters that entitles the buyer to a discount, gift, free shipping. The buyer can get it from a third-party promo code service, directly from the online store, or see the code word in an advertising publication. If we conduct a simple market analysis, we can see that the above-mentioned methods are the most popular. In the article Affiliate Programs, Cashback, and Promo Codes as Promotion Methods, we talked about the principles of their operation and advantages in detail. By placing an order with a promo code, a person informs the company of their "partner" status and receives a discount on the product. Here one can draw a direct analogy with discounts for MLM distributors. Referral programs. Essentially, referrals are not much different from partnerships. However, while in a partnership program it may be enough to sell the company's product, in a referral program, the emphasis is placed on attracting a new partner to the project. Very often, in restaurants and bars, online stores, and notably in online games, referrals are referred to as the "invite a friend" promotion. This promotion can be either ongoing or temporary. This is roughly how the developers of the game Hearthstone describe the terms of their referral program: Referral programs like "invite a friend" are a direct equivalent of inviting partners into an MLM business structure. The only difference is that referral programs are usually one or two levels deep. Affiliate marketing. Essentially, it is a trendy term for partner marketing, where affiliates are the same as partners. Companies that use this marketing principle simply promote products through a network of distributors. Direct sales. Refers to a situation where the buyer receives the product directly from the manufacturer, bypassing an endless list of intermediaries. Sales in all network companies are built on this principle. Bonus programs. This refers to a situation where a user is rewarded with bonuses for performing a specific action desired by the company (e.g., buying a specific product or purchasing goods for a certain amount). Typically, bonuses can be accumulated and used for future purchases. The system by which bonuses are awarded in the Sportmaster store network is called the "club program." According to its terms, customers can also receive discounts of up to 30% off the price of the goods. Bonus programs are the equivalent of a one-time bonus for achievements in an MLM company, which is usually awarded when advancing in rank or meeting activity requirements over a certain period. Bounty program. This concept is common in the cryptocurrency industry. By participating in such a program and performing specific actions to promote a crypto startup, you can earn tokens of that project. Essentially, virtual currency is payment for a partner's work, the same bonus that can be used in future transactions. CPA marketing (Cost per Action). This type of marketing involves a mediator between the product manufacturer and the end buyer in the form of a company that has gathered potential distributors around it. The manufacturer's task is to register in the CPA network database and offer their range of products for sale ("offer"). Subsequently, the mediator's partners decide for themselves which "offer" is more profitable to advertise on their resource. One of the largest CPA networks in the CIS is Everad. They operate in the health and beauty niche; they publish offers for sale in Europe and Asia. Recommendation-based crowdfunding. In the crowdfunding investment niche, projects are emerging that promote themselves through referral links. The essence of such platforms is that every investor registered on them receives a referral link. When like-minded people of the referrer click on the link and invest in a project that interests them - the partner receives a bonus. In our blog, we covered the topic of crowdfunding in network marketing. Read how network marketers use it to attract investments and promote a project. This type of promotion is analogous to attracting to an investment MLM project - a partner receives a reward for recruiting a new person who joins the company's structure As you can see, many network marketing methods are successfully applied in traditional business. These techniques are used by globally known companies (like Booking.com, Airbnb, Uber) as well as niche startups. If you want to boost your business promotion - it's time to review your marketing strategy and implement an affiliate program, cashback, or anything else from the above. Team FlawlessMLM can help implement network marketing methods into your business or launch an MLM project from scratch. Contact our manager in the website chat (flawlessmlm.com ) and get a free consultation about solutions for you.
Subscribe to our newsletter
so you don't miss out on useful information from the world of MLM
