For the first time in many years, I had the privilege (misfortune) to receive (be tormented by) a Multi-Level Marketing presentation (assault). There are many obvious reasons why I have a strong disdain for MLM…probably no different than anyone else´s. Fortunately as time moves on, the rising popularity of social media should greatly reduce the effectiveness of MLM 1.0 as a business process, hopefully causing its practitioners to abandon its use. From the ashes of MLM 1.0 should arise a much more pleasant methodology of leveraging relationships via social media to make sales (aka MLM 2.0).

“Each time a user adds a new (Facebook) application, their friends are notified. If more than one user adds it, the notification may even appear a little bit bigger with headshots of the users who added it. Never underestimate the power of peer pressure or how quickly things can go viral.” Lisa Barone

Marketing via MLM 2.0 will have none of the unsavory aspects of MLM 1.0. A marketer will introduce their product to people with whom he/she already has preexisting relationships, with the hope that the recipients will think enough of it that they will share it with folks in each of their social networks. People who value their standing amongst their peers generally won´t recommend products they don´t actually like for their integrity as a member of a trusted group goes along with the recommendation. Ideally, if the product is well received, it will go viral through a large number of diverse networks.

MLM 2.0 will be more efficient, much faster, more lucrative, and stigma-free. Trusted, unbiased relationships will drive MLM 2.0 revenue and the sales process will be much more comfortable for the marketer and the prospect.

Also, Social Media will render greatly reduce the effectiveness of MLM 1.0 techniques. If a social network participant were to bring up the content of an MLM sales pitch in their group, fellow members will likely set them straight.

“I met this guy who showed me a sales presentation for a morfambulator. It looks great. I think I´m going to get one for $600.”

“Did you know the FTC is going after the company who makes those things?”

“You can get something similar at Costco for $39.95…and it works.”

“8 of the top 10 Google results for morfambulator are complaints.”

“Check out this video on YouTube that exposes the shady techniques that are being used to market morfambulators.”

How likely will the person fall prey to the MLM marketer? Not too likely.

MLM 1.0 thrived in a pre-internet environment. The omnipotence of search engines severely crimped the ability to sell via MLM since a person could research any and all claims made in the presentation. However, the MLM marketer could still rely on the “relationship” with the prospect to potentially counter the information found in the search engines. Social media renders such a defense useless because the prospect is now empowered with information gathered from people with whom the prospect shares a trusted connection. As social media becomes much more universal, MLM 1.0 will die a well-deserved death.

Discuss this article in the Small Business Ideas forum.

July 23, 2007

Todd Mintz is the Director of Internet Marketing & Information Systems for S.R. Clarke Inc., a Real Estate Development and Residential / Commercial Construction Executive Search / Recruiting Firm headquartered in Fairfax, VA with offices nationwide. He is also a Director & Founding Member of SEMpdx: Portland, Oregon's Search Engine Marketing Association.

Search Engine Guide > Todd Mintz > Social Media Marketing = MLM 2.0