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Web Communities:
The Future of Network Marketing
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Anyone who has ever attempted to work within network marketing recognizes
that there are only two – but two very serious – challenges
to building a successful organization: how to get people to join and how
to keep them. In order for our industry to emerge as a leading entrepreneurial
profession in the 21st Century, these two issues must be solved.
The timely convergence of three dominant forces is destined to change
our world forever: the Internet, E-commerce, and Relationship Marketing.
Any one of these has the power to transform society and redefine how businesses
will operate and how individuals will work and live. But the confluence
of all three simultaneously will go down in history as a pivotal turning
point in the advancement of our civilization.
The Internet is the single most powerful force to invade our planet in
this lifetime. Radio took 38 years to reach 50 million listeners. Television
took 13 years to reach 50 million households. The Internet has taken only
5 years to reach 50 million users!
E-commerce is changing the face of business. Stimulated by convenience
as well as the ability to save time and money, consumer revenues will
exceed $14.8 billion in the year 2000, up from $7.7 billion in 1999, $4.5
billion in 1998 and $1.8 billion in 1997. There is general consensus that
e-commerce is now and will continue to be a trillion-dollar global trend.
Let’s define Relationship Marketing. Network marketing, by whatever
name you call it –multi-level marketing, network distribution, or
referral marketing – is a form of leveraging through relationships.
Just imagine combining what we already know about network marketing with
two of the newest proven promotional methods on the Internet: (1) “permission
marketing” in which the members, by virtue of signing on, give the
company permission to offer them marketing opportunities, and (2) “viral
or advocacy marketing,” which harnesses the evangelical zeal of its
customers. These have both been effective Internet marketing techniques
since Hotmail.com tagged every one of its free e-mail users’ messages
with its own offer and signed up 12 million accounts over 18 months. We
have witnessed similar success with MyFamily, AllAdvantage, ShopNow, MyShopNow,
Ivillage, SixDegrees, ICQ, Nullsoft, BlueMountainArts, eGroups, and Xoom,
all of whom use “word-of-Net” as a virtually free marketing
effort, resulting in tremendous marketing leverage. Relationship Marketing
is the combination of network marketing, permission marketing, and viral
or advocacy marketing. When combined with the Internet and E-commerce,
Relationship Marketing will create a system of duplication unlike anything
ever seen in our industry.
Neil Offen, President of the Direct Sales Association, predicts that
network marketing will see a seven-fold increase over the next decade
– from 31 million members to an additional 200 million across the
globe. Given our horrendous attrition rate, how is that even possible?
In the United States alone, 200,000 people join a network marketing company
every month and 85% quit within the first 90 days. The attrition factor
has been a personal heartbreak to so many advocates in the industry, including
myself. It is the concept of Relationship Marketing that has given me
hope that the average individual will be able to build and maintain an
active network marketing organization. In fact, I believe the DSA projections
may even be conservative, but such colossal growth can only happen by
companies stepping out with enough foresight to: harness the power of
these three converging forces; solve the inherent problem of network marketing;
and develop a community on the web utilizing these principles. I believe
the companies that succeed in putting all of these elements in place will
change traditional network marketing forever.
The Network Marketing Company of the Future:
The objective of a Web-based networking organization is to make it easy
to enroll, simple to use, convenient to make purchases, and exciting to
tell others how great it is. Respecting the trends of the times, it seeks
to provide a sense of community for members both on and off line. It must
make certain that members receive financial incentives to shop through
the community e-mall as well as subscribe to multiple “back-end”
products and services. Finally, it’s intent is to offer a compensation
plan that rewards people for using and sharing the products and services
available through the community mall while rewarding highly-driven leaders
as well as those who simply enjoy being a member.
Signing up for free, and with the click of their mouse, everyone is a
member and may shop at their e-mall for thousands of different products
from a variety of categories: fashion/apparel, sports and recreation,
books and magazines, music and movies, home and garden, parenting, travel,
flowers and gifts, etc. Services will also be provided through the mall
and will likely include ISPs, personalized web sites and e-mail addresses,
long-distance phone service, unified messaging, PCS mobile, and direct
satellite television. The costs will, in many cases, be less than the
cost of walking into a store and members will save time in the process.
Price and quality comparison is made easy. Unlike traditional mall shopping,
members will be able to purchase from multiple stores with one shopping
cart and one swipe of their credit card.
People today prefer to “cocoon” within a home-based lifestyle,
but still enjoy networking with family and friends. Respecting this trend,
Internet-based communities will offer innumerable benefits that will motivate
people to want to tell others about them. They will allow members easier
access for bringing loved ones together – especially those separated
geographically or living in separate households. Pictures placed on the
web become the family album; chat rooms the family or school reunion;
through a common address book and calendar, friends recall each others’
special days by sending cards or gifts; e-mailing provides instant communication;
singles can meet in their own gathering places with plenty of options
for leisure and entertainment; even relationship skills and crisis lines
are being provided. These Web communities can serve as a vehicle for fundraising
and will offer their own universities, the ability to research any topic,
a variety of health and spiritual resources, off line regional and national
gatherings. And, of course, no community is complete without an e-mall.
Free membership is the key to massive enrollments and a wide diversity
of products and services is the key to massive ordering. With these two
features in position, the e-mall makes it possible for Web community members
to generate varying degrees of earnings. Although margins will be small
on each order, purchases on a wide selection can begin to add up and,
with a sizeable network, can generate an excellent income.
So does this solve the traditional network marketing dilemmas? Let’s
see.
How will members get other members to join? The Web community concept
has all the requirements for making this easy: can enroll for free, has
an inherent value significant enough that users will want to tell others
about it, and carries no expectation to make a required purchase. The
traditional startup barriers are eliminated by simply having members,
through a prepared e-mail message, share a valuable concept – namely,
a community that will keep members in touch with each other, allow them
to meet new friends, provide knowledge and uplifting information on a
wide range of topics, and allow them to make money, all from the convenience
of home. With this premise, who couldn’t sponsor people?
How will members keep their new associates involved? Loyalty will be
created first by being part of a community where family and friends are
already linked to one another. Secondly, cash-based incentives and easy
one-stop shopping navigation will help keep community members shopping
at their own e-mall. Thirdly, people are often more motivated by fear
of loss than opportunity for gain. A lucrative compensation program will
be designed based on their network of online consumers choosing to shop
at the community e-mall. The more their members use it, the more they
earn. With an incentive plan in place, as each participant assists other
personally referred affiliates to refer others, and in turn to assist
them to refer others, this business model can create a growing community
of participants who can earn a percentage on all purchases within their
referral network.
Critics of the e-commerce Internet community offer three objections:
people want personal interaction; shoppers play the field rather than
support a single mall; and there is too little profit on each purchase
to make it worthwhile as an income source.
- Relationship marketing has a built-in sponsor so there is always a
personal contact. Additionally, a good Web community mall will have
live customer reps standing by.
- E-commerce presently is in jeopardy because there are too many choices
for consumers with too little incentive to stay in one place. The secret
is in building the community first and then offering the e-mall as a
service to its members. Two incentives are likely to keep many of the
members shopping consistently in their own virtual mall: the loyalty
factor of a relationship-based web community together with the fear
of loss at relinquishing their position.
- It is a fact that there is very little profit built into well-priced
products purchased through e-commerce. And that miniscule figure will
be divided on a multi-level compensation plan throughout the network.
The key to a good income is in the numbers who join the network and the
key to large numbers is a genuine value offered with wide range of products
and services at no initial cost. This is what sets web communities apart.
Once the member base is established, an unlimited number of opportunities
will avail themselves to drive still greater profits for both the company
and its members.
Web communities have the capacity to become a gathering place in the
true sense and, and in many cases, can represent more of a community today
than those places wherein some people reside. Combining the speed and
accessibility of the Internet with the convenience of e-commerce with
the leverage capability of word-of-mouth marketing, members will endeavor
to build personal and professional relationships. While maintaining a
focus on success principles and family values and presented in a package
that allows anyone with an e-mail address to participate, successful Web
communities will even bring members together through offline regional
gatherings. Community once understood within the context of a village
will soon be recognized as a global phenomenon thriving within the framework
of the World Wide Web.
********************************************************
From Catholic nun to elected politician to businesswoman, Rene Reid
Yarnell now teaches, writes, and consults for the network marketing industry.
She co-founded the first Certificate Course in Network Marketing, which
she continues to teach both domestically and abroad. With her partner,
she created a 200,000-person organization, moving some $70 million in
products through twenty-seven countries. She is co-author of the national
bestseller Your First Year in Network Marketing and author of The New
Entrepreneurs. ********************************************************
You will find support by visiting her web
sites: for prospecting, TheNewEntrepreneurs.com;
for training and resources, NetworkMarketingInfo.com;
to reach Rene, Yarnell.com.
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