Tips From The Top

MLM Due Diligence: Insidious Enticement

If you’ve been in network marketing for any amount of time, you will have likely come up against the idea of “Enticement.”

“Enticement” is illegal. The standard “enticement” example is showing someone your big wowzah check or super duper weight loss, and making them imagine that your check/weight loss is typical; they can do it without any effort; they can retire in a second; etc.

You can Google “enticement” and “MLM” and get lots of info on this subject.

But there is another sort of “enticement.” It’s all about NOT showing someone your results!

This only works, of course, if it’s about the money. If you are in a weight loss MLM, and you try to tell folks that you lost 100 pounds using your Weight-B-Gonez product while lying on the couch snarfing down fast food, they can look at you over the top of their spectacles and see that, um, NO, you’se lyin’, Porkchop.

When it comes to money, people do it all the time. It’s what I like to call “insidious enticement.”

Let’s say that your sponsor is only making a couple thousand dollars a month (maybe even only a couple of hundred dollars a month!). Now, granted, that might seem like good money to you right now – but perhaps they are “implying” that by “doing what they did/are doing” that you can have an income where you can ‘fire your boss,’ ‘wake up when you’re done sleeping instead of to an alarm,’ ‘live larger,’ and all the rest.

Could you “fire your boss,” if you were making what they are actually making?

When you ask your sponsor or potential sponsor how much they make, how big their “downline” is, how many customers they have, how long they’ve been at this/how many years they’ve been in the business, how many hours they actually work the business (at the beginning, and now), and how much of their $ is tied to their actual “work efforts” versus “residual”/cashflow income, they’ll often clam up, and sagely state: “Oh, it’s ILLEGAL for me to show you my check, or tell you any of that.”

Hogwash. This is still “enticement.” And it’s actually a more insidious kind.

If you ask your sponsor how much he or she makes, I would tend to bet you that they are making a lot LESS than you imagine that they are. If you ask your sponsor to lay out the hours that they work per week, how long they’ve been in the biz, the amount of distributors/customers that they have, their weekly/monthly income, and the “split” between “money for time spent” income (e.g., just like your “job”) and “residual” income (e.g., “money while they’re sleeping”), you can make an educated decision about the choice of this business over another business. It is exactly like “looking at the books” if you were considering purchasing a “bricks and mortar” business.

Granted, it’s not exactly the same as that. They’re not selling you “their” business – as would be the case if you were considering taking over the local Laundromat or hardware store. But by trying to get you into their business, often potential sponsors are misrepresenting the business by what they are not saying.

I sometimes uncharitably think that the reason so many people shout and holler and rail against high dollar earners showing their checks is that they don’t want to show their measly checks!

Interestingly, many folks state that one should not “show a check,” based on the idea that if you’re at your “real job” and standing around the water cooler, folks don’t go around and ask what each other is making. Also, many network marketing professionals state that if “someone is asking what you are making” in an MLM, you “haven’t explained the compensation plan well enough.”

I don’t agree with those statements. First of all, network marketing is supposed to be a level playing field. Unlike the “standing around the water cooler” example, everyone is supposed to be able to get to the same place by doing the same things. You’re just trying to figure out what that really means – which is Due Diligence. Moreover, though it’s true that if you “explain the compensation plan well enough,” your prospect should be able to figure out how to get to the dollar figure they desire, that’s like saying that a bricks-and-mortar establishment “should” make a certain amount based on statistics – not on fact.

And remember – the person that you’re talking to will get paid something for you joining them. They have a vested interest – perhaps in hiding what they “really make” so that you will join them, which will help them make more.

I joined an MLM and did my homework. I asked my sponsor (let’s call him Joe) to run through what his check was, and how he got to the amount he got weekly (for his work efforts in the MLM/recruiting/etc.) and monthly (as “residual income”). Interestingly, my sponsor didn’t really understand the compensation plan, so I wound up going through and explaining where he could make more money by changing where he put his efforts! But I could literally tie the compensation plan, numbers, and the rest together. That MLM changed its compensation plan, and most everyone’s check (mine included!) went down by about 60%. However, folks are still out there touting it as a way to “retire” – as a way to have “5-5-5” income versus “40-40-40.” (“40-40-40” income means you spend 40 hours a week for 40 years at a job, and retire on about 40% of your annual income – “5-5-5” means that you work 5 hours a week for 5 years at an MLM and retire with 5x what you would in a “regular job” – sometimes referred to as 3-3-3 or 7-7-7.)

I think that this is disingenuous.

If you’re already spending a lot of time in a network marketing business and “just can’t figure out” how you’re not able to even come close to “firing your boss,” then make an appointment with your sponsor and get them to “show you the money.” Look at what they are making, and how many distributors they have, how many customers they have, how many hours per week they put into the business . . . in short, do your (belated) due diligence on the business that you’re planning to “retire” on. Get the black and white facts behind what your sponsor is intimating he or she makes. You might be very surprised.

And no, it’s not illegal for them to run through their numbers with you – especially if, in fact, they are making a lot less than their language “hints” that they are making.

If you’re considering entering into a network marketing business (or any business!) then get the facts from the outset. The person that is talking to you about the business might be new at it themselves. If that’s the case, they can show you the compensation plan, show you what they plan to do, and show you how they believe it will make money, given the comp plan. But if they are not new at it, then there are facts and figures that you can actually look at (just like for a “regular” business!) to help you make your decision. If they are making a ton of dough (I’m telling you – they’re probably not), then be sure that you ask for the FAQ from their MLM that will state the “average” income of someone at their level in the business. Every MLM is required to make this information public.

But if they’re not making a ton of dough, then at least you know the truth before you proceed.

I still personally believe in network marketing/MLM as the best way for a “regular person” to get a business going, and to learn and understand how to run a business. It’s also the business that has made the most millionaires out of regular people without any special background. But I’m just tired of how many people seem to be out there hooting and hollerin’ about how great their business is – and then, when asked for the particulars, hide behind the “enticement” banner.

Perhaps MLM is right for you – perhaps the one you’re already in. Perhaps a different one.

Perhaps it’s not worth the time and effort to you, once you really get the facts and figures.

Perhaps you love the products so much, that a little money tied to introducing others to those products is super.

Great. But just remember one thing . . . get the real facts. Don’t take someone’s hyperbole for truth – especially when that “hyperbole” is them hiding the ball from you, telling you they “can’t” (as the old movie goes) Show You The Money.

It’s just as much of an “enticement” to talk big about something that isn’t really that big than it is to show something big that isn’t the average experience.

Enough said.