Marketing Options: Multi-Level Marketing

Over the years, the marketing and advertising strategies employed by businesses—both small and large alike—have changed dramatically. What once used to be traditional advertising on a black-and-white television has since evolved into elaborate onlineguerilla marketing campaigns, sometimes costing several thousand dollars a month.

Multi-Level Marketing

Regardless of the product, marketing tactic or the budget, the desired outcome remains the same; attract attention, increase exposure, and brand-strengthening. One marketing strategy in particular is widely used, but seldom talked about. That strategy is referred to as multi-level marketing or MLM. Unfortunately, multi-level marketing has been given a bad name because it is often employed by sketchy folks operating pyramid schemes. However, when employed as a legitimate business strategy, multi-level marketing can be quite effective.

What is Multi-Level Marketing?

In a nutshell,multi-level marketing is basically the promotion of sales through a referral system. While it is similar in function to a pyramid scheme in that incentives and compensations is awarded to individuals that refer other people into the program, the expected outcome is far less malicious. In short, it is a promotion aimed at getting customers and/or employees to boost the existing customer and/or employee base though a direct referral process.

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For example, a television service provider has a promotion in place where an existing customer can refer a new customer, ultimately receiving a discount on their monthly bill as an incentive.However, contrary to popular belief, multi-level marketing does not use a tiered system like that of the frowned-upon pyramid scheme. Most multi-level marketing promotions have one line between the company referrer and referee. The referrer gets an incentive from the company to recruit people into a program and/or the company itself.

Many marketing firms have begun adding MLM packages to their lineup of services. However, as with most things in life, some services are clearly better than others. Ambit Energy has established a pretty good reputation with their multi-level marketing services. With so many positive Ambit Energy reviews posted online, it would be hard to think otherwise. Should you choose to recruit help with your MLM campaign, be sure to check any available reviews online as they serve as virtual testaments to the services offered by a particular company.

A Friend of a Friend

This type of marketing strategy poses many benefits for companies that implement them effectively. Not only do they bring people into your company and/or program, but also present little expense to the referrer. The incentives vary wildly, sometimes being as simple as entry into a contest, or even a direct payment. The discretion for the reward is up to the company. Unlike other marketing approaches that aim to entice people towards your product and/or service, these promotions reward directly for enticing people into the program.

There have been many companies over the years that have successfully built their company solely by employing these types of strategies. Take Avon for example; instead of dedicating a physical building for the purpose of selling their product, they featured various promotions, discounts, and rewards to people who reached certain sales goals. Not only that, but they also offered incentives for people who recruited other like-minded sellers to join the company as well. Subscription services also rely heavily on referrals to boost their customer base.

Of course, there are some obvious drawbacks to this form of marketing. While the direct incentives can are a minimal expense associated with promoting the program, having something in place to handle and manage the program, dealing with the new customers and/or employees, can start to add up rapidly. Combine this with the fact that a substantial number of referral programs have minimal to no success in boosting customer and/or employee numbers. While that doesn’t mean that all multi-marketing strategies are prone to failure, there is a significantly greater chance of failure when compared to other forms of marketing. In the end, whether a multi-level marketing strategy is right for your business is solely for you to decide.

The specific advantages and disadvantages of a multi-level marketing scheme are:


Let your customers/employees market for you
Allows for expansion of customer/employee base


Not as effective as other marketing strategies
May end up costing more than it benefits

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