The Almost Perfect Multi Level Marketing Pitch of the 21st Century - from GTBP.org

As a sales and marketing guru and self-made millionaire, I am really impressed by the latest MLM pitch that I heard the other day.  It was not the actual sales pitch that I was impressed by, or the person who presented it to me (although it was his enthusiasm that won over my time).  It was the novel marketing idea to make the entire structure transparent.  The MLM system that I am talking about is Shop To Earn http://shoptoearn.net/scotts .

 

Now the sales pitch is the same timeless MLM pitch we have all heard before.  They use the same super-cheesy rah-rah sayings like, billionaire John Paul Getty says that he would rather have 1% of everyone than 100% of himself.   Blah, Blah Blah…what they forget to mention was that John Paul Getty made his money off one oil well in the middle-east.  But maybe the old timeless MLM sales pitch works for the Readers Digest Las Vegas slots crowd which is probably Shop to Earn’s staple sales rep.  But if you get past the cheese layer, there is a bit of genius here.

 

What I am impressed about is the visibility online that shows the hierarchical pyramid structure of the participants, their profiles, how many connections they have to them, down to their actual monthly commission check.  This not only gives the Shop to Earn Co the example successful reps that they can point to, it gives them credibility.  By not just saying, John Smith makes 10K a month, but showing it, makes it believable.

 

The backbone online ecommerce and accounting system coupled with the marketing genius who convinced the partners and investors to make the entire structure transparent, is what makes this new multi level marketing company a real contender.   Now Shop to Earn gains additional credibility with the work that went into identifying their company brand with many major North American retailers.  When you go through the Shop to Earn site, and want to shop at Wal-Mart, you click on Wal-Mart and go to the Wal-Mart site.  In my opinion, and this entire article is my opinion only, this system, the transparent approach, and brand recognition association with major retailers, are powerful tools in the eyes of the average joe consumer.

 

I have not studied the commission plan in detail.  I remember Scott, the sales rep, giving me a high level picture of dollars, points, gas cards, and HE SCORED; which takes on a different meaning from my teenage days.  But I am almost certain that the payout structure is highly leveraged to incenting the sales rep to sign up new sales reps and to keep signing them up.  So there are some hoops to jump through.  It is about $500 to get started and a recurring revenue component (for Shop to Earn), of $100 a month mandate to spend in their own store, Shop to Earth.  I am not positive, but I believe that if you don’t spend the month part, you lose out on commissionable dollars from the growing pyramid beneath you.

 

To me this seems like a limited risk to get started comparable to the potential financial reward in a fast growing multi level marketing company.   Scott showed me himself what he has brought in and his place in the hierarchal pyramid structure online.  After 6 weeks he has realized over a 100% return on his $500 investment.  

 

He then showed me another contact further up then him, who started in March 2008.  The online system showed him in the pyramid, this rep personally signed up 10 reps/brokers, those 10 reps have grown to over 5,000 reps below him in 6 months.  After 6 months and only signing up 10 brokers, that rep has made $110,000+.   Scott is so excited about it, that he is talking about how this may help supplement his retirement.  

 

The system also allows you to see how many new reps are signing up on a real-time basis.  When we looked at it this past week, the company had a total of 20,000+ rep/brokers with 2,000 new brokers just last week.  That comes to 10% growth in one week!  That is amazing.  That is $1MM in new revenue in one week on top of the growing $2MM in monthly recurring revenue.  Shop to Earn will post revenue around $100MM in 2009.  Now I am asking myself, why didn’t I start this company?

 

Scott asked me for my feedback on the system which is why I posted my opinion here.  This is what I am going to tell him:

 

Run with it.  But, you need to clean up your sales approach by get rid of the cheesy exterior which can be done by with a down-to-earth honest approach.   The first step is accepting what the system is so that you can properly explain and sell it.

 

-          Shop to Earn is a MLM company which two thirds of its revenue comes from signing up new rep/brokers.

-          People become a rep/broker, not to save money shopping but to make money by signing up new rep/brokers.

-          There are no obvious benefits for asking people to change their shopping behavior to use the Shop to Earn or Shop to Earth site.  It is simply a fairly easy and painless hoop that is part of the program.

-          There are 24,000-25,000 reps now, and it is growing tremendously fast (10% a week).  Therefore, you are at the mezzanine level of the pyramid and with the current momentum; you should be able to ride the growth wave for at least a couple of years.

 

On your opening sales pitch, don’t open up with, “do you want to make a lot of money doing nothing.”  Statements like that kill all the credibility that is built into this system.   Be honest, say what it is.  Don’t oversell, try to understate.  You might want to read some basic sales techniques.  Learn what A-I-D-A stands for and how to incorporate that into your presentation.  Read about Aristotle’s Modes of Persuasion (Ethos, Pathos and Logos).  And wrap it all up in enthusiasm.   It’s catchy.  But most importantly, you need to understand, people buy from people they trust.

 

I would also suggest to the Shop to Earn executives to update the sales pitch and get rid of anything that sounds like the same old MLM cheesy lingo.  Also, tell them to get rid of their idiotic, cheap, and clearly bullshit profiles.  The ecommerce and accounting system is a Ferrari that they are driving like Miss Daisy chauffeur.  Suggest that they hire a professional sales and marketing team and to expand on their greatest asset; transparency.  

 

And no, I will not sign up to become a rep.  Personally, I have more profitable ways of spending my time.  Also, I could never approach my contacts and ask them to be a part of a MLM program.  Again, I believe you can make money on Shop to Earn.  You have the persistence and the interest to promote the system.   However, I would not depend on this to supplement your retirement ongoing.  I can see this working for a couple of years, but when the tide turns and the checks start to get smaller, I would get out and go with plan B.

 

If anyone is interested in getting more information on becoming a Shop to Earn rep, send an email to Scott Schaffer  htsa@rcn.com

 

All the best,

 

Rob

 

Rob Guerriere

Editor

Global Trade Best Practices Org.

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