Network marketing in today’s world can mean a few different things: Multi-Level Marketing, Networking or Network-Effect Marketing. The one thing they all have in common is they all put people at their center of their focus and leverage the personal relationships that they have with others. Let’s start with MLM.
Multi Level Marketing / MLM
Multilevel marketing is a strategy that is often associated with pyramid schemes, where each person concecutively gets additional people to join into the scheme by paying a fee and that fee is split with the recruiter and his “up-line” (person who recruited the recruiter, the person who that person, all the way up to the top of the pyrimad.) These are often scams where the end people end up being screwed.
There is also a legitimate form of multi-level marketing. These are were the product being sold is actually a good product and it’s the product selling that is encouraged instead of recruiting additional partners. Typically, legitimate MLM operations don’t pay an infinite amount for the downline (people you recruit (1st level), the people they recruit (2nd level) and the people that the 2nd level recruits attract into the business) that you bring. Typically, the override compensation is limited to the first 2 levels of recruits. This means to really make money at it, people need to sell products and not focus on recruiting.
Networking is the art of building and sustaining relationships. This can happen in many different ways but a few of the most common ways are through business mixers and networking groups, such as local chambers, BNI & Le Tip organizations. However, it’s not just limited to mixers and networking events. It can also happen at conferences, through personal introductions and through online communities, such as social networking sites like Twitter, LinkedIn & Facebook or through online forums. The key goal is to get people to like you, trust you and understand how you can help them and their friends. To learn more on Networking, I highly recommend the book Never Eat Alone by Keith Ferrazzi.
Network-effect marketing is a form of viral marketing. It’s where you build into your product or service a way or requirement to share your product. This has been the main cause for the success of various social networking sites such as Facebook. One person joins and invites everyone in their circle of friends, co-workers & family. Once they join, each of them does the same, leading to an exponential growth model. The idea is to leverage the networks of each of your customers to grow your business. It’s not an easy strategy to implement successfully but if you can be creative in how you approach it, it can lead to remarkable results.
So there you have it… 3 networking marketing strategies that have been used successfully by numerous organizations. Questions are welcome below.