MLM Coaches: Scavengers of a Declining Industry

Hi and welcome back! Yesterday, I showed you the story of Kimbyrleigha, a social media influencer who did videos criticizing MLMs before joining one. In addition to joining one of these predatory schemes, she offers her fellow multi-level marketing scheme (MLM) participants a coaching service. In this decision, she joins a massive trend in the declining MLM industry: scavengers seeking to make a buck before the gravy train makes its last stop in town. Today, let me show you these scavengers — and how the scavenging trend relates to other declining industries.

We’re gonna need Fred to buy about 6 million buggy whips per year. Mmmmkay? (Stephen Doyne.)

(MLM lingo: people call an enthusiastic MLM recruiter a “hun” or “hunbot,” due to their aggressive-yet-robotic tactics and their use of artificial endearments like the misspelled “hun.” The person who recruits a hun is called their “upline,” while everyone the hun recruits in turn is called their “downline.”)

Circling the MLM Drain.

Over the past few years, the public’s awareness of multi-level marketing schemes (MLMs) has risen. Yes, slowly but surely people seem to be figuring out exactly how these schemes operate and why it’s so impossible for almost any participants to succeed in them. Those participants’ outraged tantrums over this rise in awareness hasn’t changed a thing.

However, MLMs require a very steady influx of new participants to maintain its top earners’ incomes.

As a result of this design, the top earners in every MLM all seem to realize eventually that they’re recruiting people to fail. Worse, they must all recruit. The real money in MLMs comes from downline recruits’ spending. Once victims sign up, their recruiters suck their resources dry until they wash out, then discard them and move on to their next victims. If MLM recruiters stop their prowl for new victims for any length of time, their entire suspiciously-pyramid-shaped “team” could collapse overnight. It can’t survive without constant, active recruitment efforts.

And lately, MLM recruiters are having difficulty finding new victims. Their sales are in decline as well. That’s understandable, since an MLM’s sales tend to occur almost entirely within their own distributor network rather than to outside retail customers. Fewer victims means fewer participants buying “retail stock” to fill their garages and sheds or spending to stay “qualified” for commission payments at all. Making matters worse for MLM recruiters, governments and the media seem to be finally taking these predatory schemes seriously.

All in all, then, there are a lot of reasons to think that the MLM industry is in decline.

GOOD. (Image from Rock & Rule)

The Hunbots Strike Back.

Predictably, those top earners are looking for ways to make money outside of the traditional recruitment angle. For a few years now, they’ve been seeking that magical Holy Grail.

One such grail likely recommended itself to them very early indeed. In fact, it’s been in use for decades already now! The leaders of various Amway distributor networks practice it religiously (pun intended). The only difference is that most of the newfangled practitioners don’t sell their products to the victims of only one MLM. Instead, they relentlessly market themselves to all MLMs’ participants. Since all MLMs tend to operate along very similar lines, it’s not actually an inaccurate stance for them to take.

See, they’re smart cookies. They don’t bust their humps trying to recruit constant streams of new victims to their predatory schemes. Instead, they sell “business tools,” “motivational speaking,” and “coaching” to the recruits that other huns have signed up. And their victims come to them willingly and fling them huge amounts of money, thinking this stuff will help them find more victims of their own.

In its way, it’s brilliant. It’s a nearly-perfect way to make money in a dying industry — as long as the people doing it can stay off the radar of the authorities, at least!

The Expanding Sub-MLM Coaching Business.

An MLM scavenger offers all kinds of services aimed at totally teaching hunbots how to totally make bank in their totally legit small businesses. Their services might involve web-based seminars (webinars) or special-access groups, email lists distributing platitudes and useless advice, public-speaking events let by MLM darlings like Rachel Hollis, books and videos for customers to purchase and read/view, and even one-on-one coaching (typically by phone).

These scavengers sell themselves through motivational books, social media and blog posts, essays on sites that don’t care about little things like utter horse puckey getting published under their virtual roofs, and coveted guest speaker slots at major MLM conventions.

In return for purchases of their service, scare-quotes “business coaches” promise that their customers’ businesses will boom. One advertisement promises to give customers “the modern MLM blueprint,” which will take “stuck network marketers” from “2-5k/month to 10k+ using social media.” Another promises hopeful huns “sold-out launches,” “no more exhaustion,” and of course “your best results yet.” (But don’t miss the disclaimer on that last link absolving those “coaches” of any responsibility whatsoever for anything that happens to a customer’s business after paying them $997.)

Some coaches claim that their services are free. But most charge a very steep price indeed. Often, customers shell out thousands of dollars for these products. One site found MLM coaches charging over USD$10k for what sounds like one-on-one coaching.

Man alive, that is a lot of horse puckey getting shoveled at huns lately!

As far as I know, not one reputable study has ever been conducted on the effectiveness of these coaches. Nor has any one standard ever been set for these coaches’ training and backgrounds. Literally any boss babe can hang out a shingle.

This MLM Thing Really Sounds So Familiar.

Yesterday, a few folks noticed the big similarity between these MLM scavengers and a similar late-stage cottage sub-industry popping up around evangelicalism: church revitalization businesses.

Thom Rainer started one of those before even retiring from the leadership of LifeWay Christian Resources. A number of other ones exist in the evangelical Christ-o-sphere. One church-health group, 9Marks, offers up a number of essays about revitalization from some big names in evangelicalism — including a typically useless contribution from J.D. Greear, the current President of the Southern Baptist Convention (SBC)!

(Interestingly, I see nothing on that 9Marks link from Thom Rainer. But the site does feature a recent review of one of his short, equally-useless-looking fluff books.)

The people starting these revitalization businesses make very similar promises to frantic evangelical pastors. They claim that they’ll help pastors identify their churches’ various problems and fix them — if at all possible. Then their churches will grow again! The endless decline of Christianity will turn right around! Hooray Team Jesus!

And hooboy, these revitalizers sure charge a lot for this advice! In the Deep South, we’d have said, They’re mighty proud of their product. But I don’t know if it’s pride so much as absolute greed.

When Industries Decline.

When an entire industry begins to collapse, it does so because its products no longer appeal to enough paying customers to make adequate money to support businesses within that industry.

Maybe technology left that industry behind in the dust — like video-rental shops getting completely lapped by streaming services. Or maybe public sentiment turned against that industry, leading to vastly-shrinking patronage — like circuses experienced in waves. The products aren’t selling as much anymore, especially not at profitable levels.

At such times, a sensible business owner seeks out ways to innovate and new ways to connect to modern customers. Some kimono sellers in Japan are having good success doing exactly that. They had to shift their thinking considerably in the process. I don’t think the results of their innovation would even look recognizable to old-school kimono sellers.

An excellent 1983 Harvard Business Review paper, “End-Game Strategies for Declining Industries,” has something potent to say about the matter:

Correct or not, competitors’ perceptions of demand in a declining industry potently affect how they play out their end-game strategies. If managers in the industry believe that demand will revitalize or level off, they will probably try to hold onto their positions.

Demand for both MLMs and evangelicalism is very unlikely ever to return to previous levels. However, huns’ success absolutely depends on their own relentless self-marketing as being part of an active, vibrant business model. And evangelicals can’t accept any other self-perception. Thus, they’re at possibly the greatest risk of all similarly-declining industries’ salespeople of making that exact mistake.

Scavengers as a Mark of Dying Industries.

Sometimes, though, scavengers sense a way to make money on a dying industry. They promise a way to make that industry’s previously-successful sales and marketing tactics work again. They hold out this golden opportunity to return to the Good Ole Days, back when the industry was at its peak.

And in these cases, they’re wrong.

There really isn’t actually a way to return to a declining industry’s peak. If there was a way to make those old sales techniques work again, it already would have been found by the business owners themselves.

However, the people who respond to this kind of marketing don’t want to close shop, but they also don’t want to shift and change to adapt to their industry’s new normal. They want the old normal back again.

That’s what scavengers offer. When a large number of businesses in the declining industry grab for that offer, that’s when I start thinking they’ve long passed any window of opportunity for genuine revitalization.

Riding the Gravy Train Right Out of Town.

That’s what we see in MLMs and evangelical churches alike. The top performers tend to ossify in place. They aren’t actually offering valid blueprints for success in the first place. Heck, they might not even really know why they found success in a field where so many others have found only failure. For all their customers know, they might even be flat-out lying about having found any success at all in reviving their own businesses using their blueprint.

But in those two industries, customers have been stripped of their critical thinking skills. They have no idea what real accountability looks like. And they certainly aren’t familiar with valid sales strategies.

By the time a critical-mass of understanding gets reached, their scavengers will be long, long gone — with their customers’ money in hand.

So I present us with more good news today, everyone. Hang in there!

NEXT UP: How the principles of power in broken systems explain what we’re seeing in scandal-riddled groups like evangelicalism. See you tomorrow!

Captain Cassidy’s Absolutely Free and 100% Successful MLM Coaching.

To make that top .1% money in an MLM, all you need to do is be one of the following:

  • The MLM founders themselves, their family members, or their best friends
  • An already-vastly-successful hun from another MLM who can be brought over with your extensive downline in a sweetheart backroom deal
  • Someone with an already-existing huge social-media network that can be mined endlessly for victims
  • A popular scare-quotes “business coach” selling “tools” and “training” to huns

To a vastly lesser extent, you can also become one of the top perhaps-3% of huns by being a very charismatic and morally-flexible person with a normal-to-nonexistent social-media following who is willing to work 100+ hours a week viciously manipulating people for barely-starvation pay. 

There you go! 

(Where’s my zillion dollars?)

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