Have you ever heard about a matrix?
This is a system of marketing used predominantly in MLM (Multi-Level Marketing). It is a people to people method of reaching out to customers and consumers. Simply said, it is a system of selling a product that recruits people, who in turn, recruit other sellers who, in turn, recruit and so on…Each level in which you find yourself corresponds to a certain type of compensation.
This system has been traditionally used in marketing tangible products like health care products, household equipment just to name a few.
This model of business has seen tremendous growth in Africa in general and in Cameroon in particular. There are in their hundreds on the Cameroonian market now. In a country where regulation is hard to be respected and where corruption is the backbone of the economy, all sort of these ding and dong programs are littering the market.
A network marketer from Douala, the economic capital of Cameroon. once told me that, every 10 potential prospect for network marketing is part of at least 10 different MLM companies!
How many actually go home with improved living conditions? That question is hard to answer. The reality on the ground is that the people are getting poorer every blessed day.
Is MLM actually bad a form of marketing?
Absolutely no! It is, on the contrary, a very great technique of reaching out to clients and consumers because it goes beyond a product, it creates a community. It fosters a sense of belonging and togetherness. In this present age where loneliness kills more than cancer, MLM could be the right way to bring people together and create a vibrant living community.
Many businesses and community programs function following the MLM system.
I will look at 3 types of programs that function on the MLM model. At each, I will point out their weaknesses and possible solutions if any.
Traditional MLM involving the sale of a product.
These are companies that deal in tangible products. In Cameroon, you will find them mostly in the health sector. They sell products that treat as they claim, from cancer to hypertension, fibroins, hepatitis, you name the rest. Do these products deliver the result? That is a different ball game for another time.
So what are their weaknesses?
First all, there is unequal distribution of referrals (commonly called downlines).
People make MLM successful. No people, No MLM. Period! Because people make this type of business to succeed, it is but of paramount importance that this asset is given the utmost attention.
Unfortunately, that is not often the case. MLM companies understand this and I am sure that they do everything not to take care of the people. Rather they exploit this weakness to their advantage.
Strange right? Aren’t they supposed to look after the people who make their company succeed? They do, but in a way, that benefits them and not the people.
Okay, this is confusing. Let’s get practical.
Let take a binary matrix for example. Like the one in the pic below.
When you recruit 2 referrals, and they, in turn, recruit each 2 referrals, then everything works smoothly. That is the ideal plan.
Most often, that is not what we meet on the ground. It is never that easy to fill all the positions.
Imagine a situation where you recruit 2 referrals, only 1 of them, in turn, is able to recruit 2 other referrals. Then only 2 of these 2 referrals is able to recruit.
That creates holes in the matrix. The group is working but nobody is earning. Companies pay huge bonuses only when both sides of the matrix are filled.
In the above example, the company is earning from your hard work.
This creates discouragement and the whole thing dies down. These people move to the newest company in town. The same problems occur and bam! They move again
As the French will say, “Les mêmes causes
produisent les mêmes effets.”
Secondly, the people at the top.
This is a huge debate in the MLM world. The general belief is that people who come in first are those who benefit. That is the sad truth on the ground. Network marketers are always looking for the newest MLM company in town so that they can be at the top.
What happens to those at the bottom? Well, they wait patiently and if luck smiles at them, they will be the first in an MLM company. Good luck if they ever are!
As long as network marketers don’t solve this problem, MLM will remain a source of exploitation.
Do hear “objection!”
Yeah, I know you will tell me that if people don’t earn it is because they are not working enough. Nothing could be further from the truth. These guys toil day in day out. They work for these companies and not for themselves. In almost all of these companies, the pay for recruiting and balancing a matrix is higher than that for selling the product itself.
Crowdfunding and peer-to-peer donations using MLM
These two programs have seen a consistent rise in presence on the net. Crowd funding as the name goes, is the act of funding a course, project, business by a crowd. The crowd here is a group of people that have come together to fund a given course.
Peer-to-peer is the act of providing help to a member of a community and receiving help in return.
Now, those are some of the incredible things I like in this globalized world. Breaking traditional physical barriers to meet like-minded people from various backgrounds and do things together. It is a brilliant way of reaching out and forming strong bonds through giving.
With peer-to-peer, gone are the days when giving was done by celebrities and the rich who then claim not to receive praises through the media. Coming from a religious background, I know the power of giving.
They are an excellent way of raising fund for a project.
Culturally speaking, these programs are not different from what we know in Cameroon as "njangi" or "tontine" in French. In a "njangi", a group of people put money together and give to one person. This is done either on a weekly or monthly basis. Everybody has his/her turn of receiving funds. We call receiving funds “chopping njnagi” or “bouffer la tontine” in French. As the year goes round, every member contributes and receives.
The sum of money that flows in this form of funding projects in Cameroon is more than what flows between financial institutions. From the poor to the rich, they fund their businesses and projects through “njangis”. It is an incredible tool to make dreams come true. Hardly will you find an adult Cameroonian who does not belong to a "njangi" group.
What’s the problem with this form of giving in the online community?
The administrators
These are the key people in this form of giving. If they are not credible, the program won’t last. Most often, these admins buy so many positions at the top and placed themselves to be the first people to receive. Once people keep giving and giving without receiving anything, they become tired and stop referring new people. The program stalls and collapses. The admins run away and create a different one under a different name.
How many have I been scammed in? Too many to count
The length and type of matrix.
Once a matrix exceeds 4 levels, it becomes burdensome. What does that mean?
A 2x9 matrix, for example, means that you have to get to level 9 to complete the matrix. To get there, you need 1022 referrals to cycle level 9. That is too much. The 1022 people will each need to recruit 1022 people to cycle level 9.
That is practically impossible. That is why you will never hear of people cycling out in long matrices. So what happens to the people at the bottom? They receive nothing and end up very discouraged and frustrated for lost investment.
The people at the top.
With lengthy matrices and bad administrators, the people at the top are always at the top. They keep earning and earning while those at the bottom have nothing.
As long as any matrix does not solve this problem, it won’t last. Stay clear of such!
The unhealthy quest for referrals.
A matrix can only work if there is no hole. In a very local language, no "njangi" will work if one person in the chain misses contributing or is absent. The same goes with matrices. When people refer others and they are placed ONLY under them that creates holes in a long run. What if those below them stop referring or recruiting? The system will stall and collapse. However, when people are recruited and placed in line so as to avoid holes, the program becomes solid and everybody earns when it is his/her turn.
Those are some of the issues plaguing MLM model of business and programs.
Does that mean it is a bad system?
Absolutely no! There are still very good ones on the web. They are few but reliable.
These few reliable ones understand the underlying principle of MLM: MLM is not a solo venture, it is a group thing.
One of such great program that is trendy on the net now is Matrix Survivor. Read the article on it and you will be amazed for what it has in store for you.
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