Network Marketing And The Psychology Of Reciprocity – Multi-Level Marketing (MLM) is a very popular business method. It relies on “distributors” who use the power of
MLM companies continue to grow in popularity. The products and services they provide are endless: cosmetics, essential oils, weight loss shakes, health foods, kitchen gadgets, jewelry, wine and more. Most MLMs are in the health and wellness industry; You can find a comprehensive list of all health-related MLM companies here.
Network Marketing And The Psychology Of Reciprocity
Unfortunately, the direct sales and MLM business model is very troubling because it causes tremendous financial, mental, emotional and social damage (see my previous posts).
Social Media Strategy: Cialdini’s Weapons Of Influence
I decided to join my first Multi-Level Marketing company when I was only 19 years old. The woman who recruited me focused on my “pain points”: the areas of my life where I was in need of relief and felt vulnerable. I was a busy, stressed-out college student who was introverted, living far from home, had few friends, and needed extra spending money.
Despite my best efforts to succeed, I found myself overwhelmed with the constant demands of promoting products, talking my fellow students into joining sales events and buying an endless supply of products. My dorm room was swamped with boxes of unopened products. After only 8 months as an MLM sales rep, I finally called it quits.
You’ve probably heard examples of highly successful multi-level marketing stars on social media posts. Maybe you’ve been invited to have coffee with a clandestine MLM rep, or you’ve been engaged in a bait-and-switch conversation that starts as a long-lost friend but ends in a sales pitch about how the company has changed their life.
The fact is that joining and MLM does not work for most people. The vast majority of sales reps who use this business model never make a substantial income; Most of them get into huge debt. (Check the Income Disclosure Statements for more detailed information).
The Mlm Persuasion Tricks That Convinced Me To Join
Rather than understanding how dangerous MLM companies can be, I was told that my failure was all my fault. This is just one of the sneaky messages that are built into every MLM company.
One thing that most bothers me about multi-level marketing (also known as direct sales) is how they tend to prey on those who are particularly vulnerable and already experiencing financial pressures.
Instead of providing a sustainable way to earn money and become self-sufficient, this model keeps reps stuck in a never-ending cycle of buying products and signing up other unsuspecting victims.
My self-doubt and sense of failure about my MLM experiences changed after I discovered the classic work of a psychologist named Robert Cialdini. He wrote a book called
How Mlms Use The Psychology Of Influence
, which has been quoted by a lot of modern marketing experts (sometimes without giving Dr. Cialdini the credit he is due…).
In his book, Dr. Cialdini provides some scientific evidence of why we make decisions, and what makes us susceptible to being duped. Some of his stories are obviously dated since they take place in the 1960s and 70s, but I Love the way he demonstrates these
I will explain each of these principles as they relate to the tactics used by MLM and direct sales companies.
Let’s take a look at how multi-level marketing companies use the power of influence to convince people to join. For each of the six, I will provide a Devil’s Advocate opinion, which is a
Pdf) The Psychology Of Attraction To Multi‐level Marketing
Generally, females tend to have a strong desire to equalize the imbalance in a relationship. When someone shares a gift or a favor, most women feel obligated to repay “in kind,” with something of equal value. If the gift is not repaid, they may feel that there is an imbalance until the debt is repaid.
Reciprocity is often a useful tool in marketing. Although it can be a good marketing tool, unscrupulous companies use it to take advantage of the kindness of others.
Reciprocity can easily be used to hurt people, but this influencing tactic can also be used for good. We all have a strong
. Consider the impact of giving a gift to potential buyers (like the Pop-By item, which I explain here).
The Evolution Of A Unified Framework Of Reciprocity
The influencing principle happens when we fulfill a public, written and voluntary promise… sometimes one that we don’t even know we’ve made.
We tend to agree to meet with someone we trust. The danger is that our need for consistency can lead us to make uncomfortable decisions, even if we know it’s not the right thing to do. When this involves selling a product, it can be transaction avoidance syndrome – a breakdown of the sales process in which the seller is unwilling to complete the purchase. You can read more about it in my 3-part series.
When a buyer is afraid that they will be taken advantage of, their only recourse is to cancel the meeting, refuse to accept the offer, or say “no” to the sales pitch. Refusing to accept something can be very difficult, so a risk intelligent business owner will make sure that you or his buyer is never placed in a situation where they feel the pressure to buy.
Rather than taking advantage of your customer’s goodwill, make sure you provide tangible value throughout your sales process.
Marketing Psychology: 10 Revealing Principles Of Human Behavior
As humans, we make decisions with a pack mentality. When we see others who are similar to us doing something, we automatically think it might be a good idea for us too. While this can be a great tool to influence your customers’ purchasing decisions, make sure you don’t “name drop” excessively (by making it seem like all their friends are using your service). This type of over-familiarity can be a real turn-off once a buyer realizes that you’ve misrepresented your closeness to their peers.
On the other hand, this technique works really well if it comes from your target customers directly. That’s why honest testimonials are so effective, as well as organic social media shares – when your best customers share how great your services are with their peers.
Although we may not like to admit it, we are attracted to people who match our socioeconomic status, our education level, intelligence, personality type, and lifestyle choices. Some of this is from social conditioning, and it is important to be aware of whether our friendship group is also homogeneous. “Groupthink” is quite common in MLMs, as everyone tends to say and make choices that align with the overall group rather than questioning whether it is appropriate.
As a business owner, make sure you look for opportunities to serve customers in a way that makes them feel comfortable. Consider whether your marketing efforts are targeted to one socioeconomic group or type of person. Although niche marketing is very effective, it can be skewed too far by denying legitimate buyers the opportunity to use your services, simply because they don’t see themselves in the marketing message.
The Psychology Behind Successful Lead Magnets And How To Create Them
Healthcare consumers are often confused by the vast amount of information that is floating around. They can find it very difficult to make an informed choice, especially when so many companies promote products and services that promise an immediate, pain-free cure.
The best way to establish your authority in a crowded healthcare market is to start with the proper qualifications to practice your craft. If you are not yet fully licensed or certified, do not promote your services as if you are.
I encourage my clients to consider a very narrow practice focus, which may require additional training and certifications. By choosing a very distinct part of the market, you can offer a specialization that is authentic – rather than overextending a credential or knowledge base, which can lead to misrepresentation and dangerous outcomes for consumers.
When we see that something is in limited quantity, we feel compelled to participate…even if the number or situation is not something we
The 9 Revealing Principles Of Human Behavior
A limited quantity, combined with a deadline after which something will not be available, is a very attractive combination that can be used effectively… either for good or for bad.
First, consider the fact that opportunities are often not as rare or limited as they are presented. The deadlines and “
” Advertisements are almost always artificially engineered to pressure a buyer into making a purchase. Consider whether your business uses this tactic.
Have felt a compulsion to buy something because of the “fear of missing out.” The thought of not having something is often very uncomfortable, and can lead a buyer to want the product or service even if it is not in their best interest.
Simple Sales Psychology Tricks That’ll 10x Your Profits!
Finally, look for signals that there is an artificial deadline or limitation, and call out the dishonesty. If you’ve used this technique to increase your sales conversions, consider asking buyers for feedback about their experience. Is it possible that you can make even more sales by eliminating the pushy sales tactics? Although scarcity can be really helpful, it’s important to use caution so you don’t pressure a potential buyer who may later regret their decision.
As you can see, we all have the ability to influence buyers to make choices that can add a lot of value to our business.
Consider how you can apply the 6 techniques listed above in a way that aligns with your philosophy, and also that creates a balance between
If
Field Guide To A Product Mind: Reciprocity
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