What is the Difference between Network Marketing, MLM, Multi Level Marketing, and Referral Marketing?
What is the Difference between Network Marketing, MLM, Multi Level Marketing, and Referral Marketing?
Nov 22
Network Marketing, Referral Marketing, Multi Level Marketing, MLM… the names may differ but they all refer to the same system that is one of the fastest growing methods of moving products or services in the world today. It is very similar to a franchise allowing people to earn commissions but without the huge financial and time investment requirements.
Network Marketing is a simple method of distributing products and services… it is not about the type of company that you are with. Your company has simply chosen the Network Marketing model as their preferred sales and distribution method instead of setting up their own sales force and marketing to wholesale/retail outlets.
In a `conventional’ business, a company will spend a fortune advertising its products or services to potential customers.
How much do you think an advertising campaign on TV, or a campaign in the daily newspapers, costs?
How much do you think an advertising campaign on TV, or a campaign in the daily newspapers, costs?
Or full page glossy features in magazines with superstars earning millions for their endorsement of trainers, golf clubs, anti aging skincare products, clothing?
Or the cost of cosmetic counters in departmental stores with demonstrators giving free makeovers or anti aging skincare testing?
In a `conventional’ business, a company moves its products through a string of outlets, all of which incur running costs and additional profits which all have to be added to the final cost. The result is that all these additional costs can equate to 85% or more of the final price paid by the eventual consumer.
In Network Marketing, the company usually deals either directly with the eventual consumer or via independent distributors – either way the independent distributor whore ferred the customer will receive commission every time that customer buys.
This method reduces the overall costs and allows the company to pay commissions to its distributors. This often allows the company to produce better quality products / services at very competitive prices whilst still receiving good margins with which to pay the distributors.
Which of the following options do you think would be the one that would get YOU to buy Product X?
1. A total stranger on a TV advert telling you that Product X anti aging skincare product is the greatest of its kind in the world, or
1. A total stranger on a TV advert telling you that Product X anti aging skincare product is the greatest of its kind in the world, or
2. An advert in a national newspaper telling you that Product X anti aging skincare product is the greatest of its kind in the world, or
3. A friend who you trust, recommending you buy Product X anti aging skincare product because they have personally used it and believe it to be the greatest of its kind in the world
For most, it would be option 3, ‘a friend who you trust that had personally tried and recommended Product X anti aging skincare product’.
Tens of thousands of companies are very aware of the incredible power of personal recommendations and either have MLM divisions of their own or offer you a gift or incentive to recommend their products to others.
How many times have you recommended a movie or a restaurant and then have the manager of the establishment pay you a commission? I bet it’s NEVER!
Well, in Network Marketing you DO get paid for recommending your company’s productor service to someone. And, usually, you get paid every time that person spends money with your company.
There are two types of people in this world:
The ones who pick up a check every month for recommending products /services The ones who do not pick up a check every month for recommending products / services Which one would you rather be?
Now, so far this sounds like a direct selling operation paying commissions to self-employed agents doesn’t it? Of course it does!
Well here is the BIG difference:
You want to earn extra money and when you introduce like-minded people who also want to earn extra money, you will earn a continuing commission on THEIR EFFORTS,too – and on the efforts of the people that they bring in! In most companies, this goes on for several layers of enrollment – now that is powerful!
You are basically enrolling other people into your business and leveraging extra income from their efforts in the same way that a Sales Manager would get an over-riding commission on his/her team’s efforts. The difference is that you could have thousands ofpeople in your business that you earn from even though you have not personally introduced them all – and probably will never have contact with them either!
As an example, I introduced six people into one of my businesses. By teaching them howto do what I do, in 8 months my business grew to over 18,500 people and I earnedincome from most of them – but all I did was introduce six people and taught them to do what I did!
As I already said at the beginning of this article…
IT IS UNDOUBTEDLY THE GREATEST INDUSTRY IN THE WORLD!