Attorney Marketing Blog

Multi-level marketing (MLM) has a bad reputation, especially since the somehow rising popularity of pyramid schemes. People often make the argument that MLMs are just a stone throw away from being a pyramid scheme.

For clarification, I’ll briefly list the few differences they have: MLMs offer a consumable product and are supposed to make the majority of sales off of the product; pyramid schemes loosely provide products, but sales are entirely reliant on recruiting more “investors.” While the differences seem loose and lines are blurred, if those differences are enough for the Federal Trade Commission (FTC) to make the later form of business illegal and the former legal, then it’s good enough for me.

So, now that we know that multi-level marketing has been deemed legal by the FTC. How well of a business strategy is it?

Dr. Jon Taylor conducted research that analyzed over 400 MLM companies and published his findings in his free e-book Multi-Level Marketing Unmasked. His study found that:

• Approximately 99.7% of MLM participants lose money;

• The more you invest, the more you lose (which contradicts the well-spread belief that success in MLM reliant on effort);

• MLMs continuously misrepresent success and income potential;

• There is a positive correlation between MLM participation and failed interpersonal relationships.

After listing some pretty strong reasons as to why you should not engage in multi-level marketing, let’s talk about what these companies do RIGHT.

-Ethics Interruption-

Before we dive into how you can incorporate MLM concepts into your law firms marketing, let’s talk about ethics. While multi-level marketing is legal, many people do not believe the marketing strategy is ethical and to be transparent, I agree. Large MLM companies have been reviewed and had to change policies to push product more than recruitment, but the entire system is built to make a minimal number of people at the top wealthy by taking the money of “investors” at the bottom of the pyramid.

The multi-leveled “pyramid-like” structure of the hierarchy is NOT where we will learning marketing strategies. Don’t be a jerk. Treat and pay your employees fair. Do not abuse your authority with clients. What we will be learning from MLMs and pyramid schemes is the psychology used in the companies.

3 Lessons You Can Learn from Multi-Level Marketing and Pyramid Schemes

Build a Tribe of Raving Fans

Of course, that’s not the wording they use. Regardless of what their herd is called, they know how to get people invested (in the figurative and literal sense of the word) in the company. Even though the failure rates of participating in a multi-level marketing company are just one Google search away, the consultants are still actively recruiting. How do they convince people that they will be successful in MLM? One way they achieve is by building a network from trusted people.

Those who join multi-level marketing companies do so because they trust the person that approached them with the opportunity. Often they are offered free or highly discounted products and join the MLM because they genuinely enjoyed the products. As an attorney, you should have a network of people that trust you through your newsletter, emails, VIP program, etc. Be sure to not drop your quality service when the client hires you. Your referral network should be as vast as you can manage it.

Build a Strong Sense of Community

Pyramid schemes do a great job at creating community. They do this by hosting conferences, seminars, and reward parties for top performers. Mary Kay entices consultants to perform well by offering a cruise ticket with other top performers. The conferences and seminars are high-energy and fun; consultants enjoy going to them. The reward events, like cruises or vacations, give consultants time to interact and have fun with like-minded people.

Do not underestimate the value of office culture. Build up the community in your law firm that cultivates learning and encourages staff to stay (even millennials). You might be surprised to know that only 34% of U.S. workers are engaged in the work they do [Source: GALLUP]. Allow staff to take a few mental breaks and talk with and get to know one another. The higher employee satisfaction is, the increased employee engagement, productivity and retention will be.

Know Who Your Ideal Client is and Target Your Marketing Towards that Person

While the majority of products sold in multi-level marketing companies are makeup and beauty related, there are products specific towards men as well, like knives and protein shakes. Depending on the product, there is a particular person in mind that the consultant is trying to sell to and eventually recruit. Feminine products interest stay-at-home mothers and young women who are looking for side jobs that can get them a little extra income and the men who are targeted frequent the gym. The reason consultants are able to sell products and recruit more investors is that they target the right person.

If you are wasting money by purchasing advertisements that get mass impressions, you are not wisely investing in your marketing. Impressions do not matter if the people listening do not need your services. Always invest and “recruit” clients who both need and can afford your services, as well as have a demeanor that you enjoy working with. If you do not know who your ideal client is, think of past clients that you have enjoyed or disliked working with and write down their demographics and psychographics.

Ben Glass

Ben is a nationally recognized expert in attorney marketing and the owner of Great Legal Marketing.

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