AFFILIATE MARKETING CROSSOVER IN NETWORK MARKETING AND DIRECT SALES 

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MLM, affiliate marketing and direct sales; three different selling models in flux, blurring their boundaries as they borrow techniques from one another. It’s a hot topic in the network marketing industry today and Richard Sletcher understands this landscape very well. What are your thoughts on the adoption of MLM strategies in affiliate programs, or the rise of affiliate marketing techniques in direct sales? How will this affect hierarchies, compensation, or loyalty from the volunteer armies? Enjoy this exciting conversation, filled with great stories and interesting insights about how this industry is changing.


This is an extremely complex business – you’re dealing with a normal company plus you’re dealing with an army of volunteers. On the one side, it’s like running a church, on the other side, it’s like running a really big business.

Patrick:

Richard, it is great to be with you today. Super excited about this call. And how are you, my friend?

Richard:

I’m doing absolutely wonderfully. It’s been a while coming. I’m so glad to be in this call with you.

Patrick:

I am as well. So maybe a great place to start is for context, is just your history in the industry. Give everybody a little bit of a taste for where you started, how you got into the industry and that’s probably a good place to start.

Richard:

Okay, well, I was running a big ad agency in Cape Town, it’s a property ad agency, and a company, a director of a company walked into our boardroom and said they were looking for somebody to do some advertising for them, and they were an MLM business. And they explained to me how their MLM business worked, and I was just blown away by the concept. I’d never heard of it, this is 1988. I’d never even heard of MLM. Anyway, so we got really excited about this. I mean, we thought this is the best thing ever. We went out shopping for Ferraris immediately, as one does. And so we started developing all of the documentation and all of the stuff that an MLM company needed in those days. And it was sort of before the days of software as a service. And it was… you know, so you didn’t have an online presence, really. Everything was done manually in those days. So it was application forms and you know, all the kind of stuff that went back in those days. Anyway, after about three months of working with this guy, he suddenly just disappeared off the planet. And it turns out that he was a US-based guy and he was in South Africa and he turned out he didn’t want to stay in South Africa because he was having problems with his visa or something. And he pushed off back to the States and of course didn’t pay his bill, nice of him. So if you find him, his name is Gert van Seel. If you find him, please track him down and let me know. Anyway, so, but I was left with all of this content and all of these ideas. So I thought, well, how hard can this be? So what can possibly go wrong? You know, and all great disasters start with the line, how hard can it be, I think. Anyway, so we went and spoke to a company in South Africa that did timeshare and we came up with a deal with them where we would actually sell timeshare through multi-level marketing. And we launched this MLM business in 1989 and it just exploded on us. It was just insane. We were signing up thousands of people a day, or not a day, a month, and this business was just exploding. And then all of a sudden, this company, they couldn’t deal with the volumes. We were sending them too many leads and they couldn’t deal with it, and they pulled the plug on us, and just took the business out in a heartbeat. We were one day we were going, the next day we were gone. And so I got myself pretty badly burnt. I learned a lot of very expensive lessons in the process of that. And so that was my first experience of MLM.

Patrick:

And at the time, when you still were you still running the advertising agency at the time?

Richard:

Yeah, yeah. So my partner focused on the ad agency and I focused on the MLM side of it. And so, I mean, I got myself pretty badly burnt with that exercise. ‘Cause you can imagine, suddenly you’ve got people who aren’t getting paid commissions because the company owes us money and they weren’t giving us the money and they canceled the agreement. So there was court action happening and it was a mess.

Patrick:

So today, you know, not to jump forward, but I want everybody to have context as we go through this call, MLM for CEOs. Tell us about what you’re doing today and focused on, and then we’ll backtrack a little on the history.

Richard:

Well, MLM for CEOs is a channel that’s aimed at the C-suite. So I want to talk to people who were in my position in 1988, who see the opportunity that MLM presents, but don’t know what they don’t know. And you know, it’s so easy to think that this is a simple game, because what you do is you sit down with your spreadsheet and you go two, four, eight, sixteen, thirty-two, sixty-four, one hundred and twenty-eight, five hundred and twelve, and you do this exponential calculation and you go shopping for Ferraris. But the thing is that this is an extremely complex business and you’re dealing with a normal company plus you’re dealing with an army of volunteers. And these two things are totally different animals. On the one side, it’s like running a church, on the other side, it’s like running a really big business. And when these businesses take off, they are exponential in their growth curve. So you can go from a thousand people to two thousand people to four thousand people to eight to sixteen to thirty-two thousand people, literally in the matter of months. And so we’ve seen companies, one of our clients went to a hundred and fifteen thousand people in their first twelve months in business. Now the issue is there are all sorts of challenges that come into play around these businesses. There’s challenges if they’re not growing and there’s challenges if they do grow. There’s no such thing as a linear multi-level marketing business. It just doesn’t grow in a linear fashion.

It’s exponential.

Patrick:

Right. If you have success, it’s exponential.

Richard:

If it succeeds, it succeeds too big. And if it fails, it fails completely. It doesn’t seem to be a middle ground between those two things. And so what I wanted to do is put together a channel that… talks to all of the issues that the C-suite faces when they get into multi-level marketing and they start setting up an MLM business. Because they don’t know what they don’t know. And I came at this having run two major companies. I ran a big courier company, I ran a big ad agency. So I knew how to run companies. I got into the MLM space and I didn’t know what I didn’t know and I burnt myself really badly in the process. And of course, learned a lot of hard lessons. Subsequently, I started another company in the early 2000s, which was a roaring success. And I’ve been involved in six or seven major success stories in the MLM space where I’ve either been in there as a consultant or some form of service provider with our IT solutions, et cetera, to help grow businesses. So… it took me 10 years though, to put that experience behind me, to actually recover from that and actually have another go at MLM.

Patrick:

Well, one of the things I appreciate about your perspective, you really have come from all sides of it in your 35 years. You’ve built multiple times in the field. You’ve been in the consulting, you’ve been in the president, CEO kind of roles. And then additionally, you’ve been on the software side. So you’ve worked with a lot of companies, we don’t need to spend a lot of time there, but you’ve seen the genealogy issues, the commission engines, all of that, from helping a lot of companies on the SaaS side.

Richard:

Yeah.

Patrick:

So talk to us, let’s talk a little bit and drill down on that difficulty. It’s difficult because of the exponential nature of network marketing and some of the things you touched on, but I think it’s gotten even more complex. I’m sure you would agree today, when we start talking about the different type of plans and you look at social media, and affiliate marketing… and I’d like to talk a little bit about the difference between affiliate, MLM, and direct sales. Could you educate everybody just a little bit? I think there’s some nuances there, and I’m hearing more and more often people throwing these into the same bucket almost, and they’re not.

Richard:

No, no they’re not. You’re 100% correct. So let’s just talk about direct sales. So a typical direct sales business is somewhere, someone like a Tupperware. I’m sure you’ve heard of Tupperware. So they sell these amazing plastic containers and the way their structure works is that I become a dealer with them. I purchase the products at a discount and I sell them on at a profit. There’s a team leader who looks after me and she makes a small overriding commission on anything I do. Above that, there’s an area manager who looks after the team leaders, and above that, there’ll be a regional manager who looks after the area managers, etc. So there’s a very strong, structured hierarchy, and it’s very much area-based. So if you’re a team leader in Quebec, then you are dealing with people in your specific area, and you’re not dealing with an extended network of people. And the structures are… very strong and getting up the ranks is quite difficult. You have to be nominated, you have to be specially trained. You can’t just become a team leader, et cetera. So it’s a much more structured approach.

Patrick:

Is that always… that’s almost always… I don’t think I realized that part. That’s almost always true in direct sales where it’s more regional and more structured from the hierarchy, from the organization down?

Richard:

100%. And you’ll see specifically companies like Rainbow or Kirby or 4Vac who are selling high priced vacuum cleaners, is a prime example, where there’s a real need for training and for management and for making sure that the salespeople are actually doing the number of calls. You’ll find that those businesses are typically, they’re direct selling companies with very strong regional bases and you cannot sell outside of your areas, you can’t… your networks can’t grow outside of the areas. You can promote people out of your networks, but there has to be an area for them to move into and they leave their team behind. And there’s a whole lot of stuff around direct selling.

Patrick:

And I would assume this puts a bit of a governor on the growth as well, because the infrastructure has to be there and people in place before, whereas now we… anything else on… let’s finish that anything else? I mean, the comp plans tend to be shallower, right? And the commissions for selling tend to be a little bit higher for the individual seller of the product. Would you… is that true?

Richard:

That is true and also it is a top-down approach. With multi-level marketing, it’s a bottom-up approach. I sign up as a consultant and I grow through the network by building my team. With direct selling, it tends to be a top-down approach. We appoint a regional manager. The regional manager finds the area managers. The area managers find the team leaders and the team leaders find the network of people who are gonna be doing the selling. So it becomes a top-down approach. There’s not a lot of incentive for me as a consultant on the ground to actually recruit anyone. Now some companies, direct selling companies, try to utilize some sort of overrides to try and drive that process of bringing people into the network. But because it’s so regionally ring-fenced, it’s very, very difficult to just sign up people, because you have to sign up people in your area and the areas get saturated quickly and generally you don’t know people in the… adjoining areas. It’s difficult to get into that. So it’s much more top-down. You advertise for people, you bring them in, you train them up. There’s a lot of training and then you manage them. So that’s traditionally how the direct selling side works.

Patrick:

And then we can talk about MLM and affiliate, but I think what’s really important here for a lot of organizations is they’re trying to sometimes jump. I see a lot of it with affiliate marketing. MLM companies are trying to jump into affiliate marketing, and they’re not thinking about any of the unintended consequences to the current organization, the structure, delivery of the product, and a whole host attribution and a whole host of other things. And you almost, you do have to begin with the end in mind a little bit. So, you know, as we talk about this, we can jump to MLM, but a lot of problems. What are you seeing in relation to that?

Richard:

Well, the thing with an MLM play versus a direct selling play is that you, it’s an education thing. You have to train the people. You have to make sure they know how to sell. When it comes to MLM, you’ve got a much wider reach. In other words, I can sign up anybody anywhere in the country. They come and do their training online. It’s not that important that they understand the product really well because the company’s tools can tell the person about the face cream, or the new pills, lotion or potions. So we can use a lot of company tools to actually do a lot of the selling for us and a lot of the training for us. And a lot of that stuff all happens online. And because it’s less training intensive, you can get away with building a big national – slash – international company. So companies like an Amway, Herbalife, GNLD, those kind of companies can spread globally. Because if I’m, you know, if I’m living in LA and I’ve got somebody else living in New York, I can call them up, I can tell them about the business, I can get them signed up and I can point them at all of the company training and off they go. I don’t necessarily need to be in the same space and because I’m signing up a hell of a lot of people, the tendency seems to be that you get a lot of churn. In the direct selling side of things, you don’t get as much churn. Your churn rates are much, much lower because the person is highly trained and therefore successful and therefore generating an income. So your churn rate is much lower in the direct selling. In the MLM you’re not having that training side of things, so what tends to happen is the guys are not as successful, they don’t make as much money and then the churn rate is high. And I think that’s one of the reasons why we get, why our industry has a bad name. And let’s not kid around the block here, the industry does not have a great name. And I think the reason being this exact thing…

Patrick:

What? Are you serious?

Richard:

Sorry?

Patrick:

Really? Seriously?

Richard:

Ha ha ha. Yeah.

Patrick:

Listen, how do you, you’re consulting a lot of companies. I know I just referred somebody to you last week and you’re helping a lot of organizations that have an established product or service in the marketplace. They have an established business and despite some of the negative things that surround MLM, they do realize there’s a model there that makes sense. As a side note, I will say it’s been very interesting to see with affiliate marketing how it’s almost validating, sometimes through confusion, but it’s almost validating MLM in direct sales because they don’t have the understanding of the differences, and they’re seeing all these affiliate marketers that are essentially – in some ways – they’re getting paid for promoting a product or service, which is what network marketing has been. So it’ll be interesting to see in the next several years how that plays out as well. You know what I’m saying, but going back to, listen, you’re helping a lot of organizations. When you sit down with them, I know you can’t give them a whole tutorial on the differences in all these verticals. How do you decide, internally in your own mind, which vehicle is best for a particular company? How do you help them navigate some of those decisions?

Richard:

Well, look for me, it starts off with A: what is their product? And what level of input do they need from their client base? So a company came to us recently, they’ve got an internet-based product where they have to go into the person’s home, they have to do an installation. There’s a whole lot of work that needs to happen around the product, and that would be much more suited to a direct selling approach. Because, we have to have trained installation, we have to have trained salespeople, they have to really go in and understand the product. We have another client of ours who sells insurance products and they, what it is, is a referral business. So what happens is I send out a link, the person grabs the link, they click on the link, the company phones the person, closes the deal, and the sale is made. And the person gets paid for sending out the link. Now, that would be much more geared towards a MLM or affiliate type of approach.

Patrick:

Hmm, yeah.

Richard:

But what I’m finding, what I’m finding is that because of all of the competition in the affiliate space, where these affiliate marketing companies are desperately trying to acquire affiliates, what I’m finding is that they are building a lot of MLM strategies into their affiliate programs. So I go in and I have a look at an affiliate program and, in the old days, you would get like a straight 30 or 40% forever. You sign up a person in ClickFunnels and they’ll pay you 40% and off you go. You sign up a hundred people, whatever the money they’re making is you get up to 40% out of the deal. Now I’m seeing companies coming out like Funnela who are saying, “Hey, we will give you an infinity bonus”. Fundamentally, what they’re doing is they’re providing an infinity bonus, infinitely deep on anybody who joins the business from your introduction. And they’re working on this infinity bonus and they are creating leadership bonuses because what they want you to do is find other people like yourself and get them going. Now, I mean, that’s a multi-level marketing play to an extent. Okay, they don’t have all the recognition and the incentives and they don’t have all of that stuff, but what they’re doing is they’re adopting some of those MLM strategies because they know that people are looking for ways to earn.

Patrick:

Are they just taking 1 or 2% from that structure? Because they can’t take too much from the affiliate side, otherwise they’re not competitive right in that space. So how do they deal with the infinity bonus?

Richard:

Well, they’re saying to their affiliates, look, with any other company, you get 40%, okay? But you get 40% only on the people that you bring in. What about the people they bring in? And the people they bring in, and the people they bring in, infinitely deep. You get zero on those. So what we’re gonna do is we’re gonna give you 20%, but we’re gonna give it to you infinitely deep. And so now suddenly I’m not just earning 40% on the people I bring in, I can earn 20%, infinitely deep, on a global network of people signing up all over the world.

Patrick:

I mean, this is a network marketing model for affiliates. Is that going to… what’s your thought on that? Do you think it’s all going to work?

Richard:

I think it’s gonna be amazing. I think it’s gonna be amazing because if I’m an affiliate marketer and I’m working for company A and they’re paying me 40% front line and I see hey, company B will give me 20% but they’ll give me infinitely deep. Well, I’m gonna swap my efforts over here because why would I wanna work with a company that’s only giving me front line commissions when I could do the same amount of work but earn infinitely deep? Because you know what happens, I introduce you to the thing, you decide you want to become an affiliate as well. Fantastic. Now you go out and you bring in two, three, five hundred, a thousand people. I make nothing on that. I would rather make 20% on my own efforts, but 20% on everybody else’s efforts in my network.

Patrick:

I’m going to be fascinated to see. I just wonder, you know, in MLM, so much of it is about culture and team building, and that creates some of the stickiness, the culture. The affiliates feel a little bit more like a hired gun to me. They want to get paid. And when you tell them that they have a big audience and they’re going to get half the commission, and they say, I don’t really care about recruiting anybody, I don’t want to deal with that. But I have an audience and I want to sell… they’re a hired gun and they might want to just go to the highest bidder. And they’re like, somebody else is selling a very similar product that I can sell to my base. And they’re going to pay me twice as much money. I just wonder if you won’t have so many people jumping ship all the time for the next highest. You know, if you come for the money solely, you tend to leave for the money. It’ll be interesting. Yeah.

Richard:

I’m curious to see. So the thing is, as an affiliate marketer, okay, there’s two problems with affiliate marketing. The first problem is that I have a lookout in the market and then I become an affiliate for 500 companies. I keep on joining different… and I’m joining every company and I’ve got no focus on anything. I get a few people here and a few people there and I’m earning peanuts though, because… and I mean, even if it’s good money, it’s still peanuts compared to what’s happening because the company gets me to sign up a whole lot of people. But I potentially know people in my network who have got big networks themselves. Because let’s say you follow MLM for CEOs. I introduce you to MLM for CEOs on an affiliate program, but you know 10 people who you actually, you know, just purely by telling them about MLM for CEOs, they decide to join. Now, that’s cool, you getting money on those 10 people, but I’m not. But now suddenly, because of the strategy, I earn on your people.

Patrick:

Do you think that should be an infinity bonus or a two level? It almost feels like, hey, just take it at a two level bonus because they’re not thinking about the depth and duplication. They’re not worried about that in the affiliate space, but they want to get paid on what they do. And I’m just thinking out loud with you here. I mean, that’s an idea…

Richard:

Yeah, look, the proof of the pudding is going to be in the eating. But I think my point really is, how does one company differentiate themselves from everyone else? How do I attract the affiliates who currently are just looking at this flat marketing plan? So now I’ve got two options. I can either say to them, move to me because I’ve got a better product. And, you know, then we’re trying to move them based on either price, or product, or I’ll give you more commission and then it becomes a race to the bottom. And I don’t believe in that at all. Or you need to somehow differentiate yourself because everybody is competing for those affiliates. Everybody wants them. They’re marketing to them. They’re going to all of the influencers and they’re trying to convince the influencers to come on board and get involved. And so there’s a lot of competition for those affiliates. And I think that what these guys are doing is they are trying to come up with a strategy that pays the affiliate much more money, much more money, because they are now not earning just on their width, because they still earn on their width, but now they’re earning on their depth as well. And so I think these guys have got a winning formula. I do. But we’ll see. I mean, who knows?

Patrick:

Do you think it largely stands alone from the network marketing industry in a sense, like the traditional MLM of building culture and depth and relationships? Do you think it stands a little bit alone or it’s being incorporated into the current model?

Richard:

So what I’m seeing in the multi-level marketing space is that there’s a move in terms of MLM, there’s actually a big move towards affiliate marketing. I see that the MLM companies are saying, “Hey listen we need to be talking directly to the customer and we need to treat our networkers as affiliates not just resellers”. Now in the MLM space they’re resellers as well and that’s fine, but I see a big trend towards dragging people into the affiliate marketing strategies. So what happens is every single distributor gets their own link, just like an affiliate company. They then get provided with marketing and advertising and training, et cetera, on how to go out and advertise that link and advertise the products. Anybody who clicks on that link buys directly from the company. The company fulfills and then the affiliate earns a whack of money based on the normal MLM strategies. So what they’re doing is they’re pulling multi-level marketing into the affiliate space. But what I see as well is that there’s a big draw from the affiliate space towards the MLM side. 

Patrick:

I almost feel like that, you know, especially in the space you’re in, and you may already have this, but almost a matrix that you could present that shows, okay, here’s the strengths and weaknesses of each of the different models, and here’s where they can overlap, right?

Richard:

I think that’s an excellent idea. I think I need to put that together.

Patrick:

It would be really cool because then you just go straight to a company and go, look, here’s based on your product, the audience that you’re trying to recruit, the complexity of the sale or the simplicity of the sale, the renewal of the sale, right? It used to be back in the day… I mean, when I grew up, my mother was in Amway and we had a garage. I remember she was… a relatively short window, but she was a go-getter and we had a garage full of products, right? And it was her job to resell that product on a monthly basis. And people would show up and buy that product. Today, that’s going to the company. The company is saying, “Hey, we’ll deal directly with the consumer, we need you to generate new customers.

Richard:

Exactly.

Patrick:

Right? And the best, the fastest, well, I mean, I say, I mean, anyway, okay, all right, yeah, the matrix would actually…

Richard:

The fastest… go, go, talk to me.

Patrick:

Well I mean, the MLM tends to do it through relationship-based, person-to-person more effectively than any model that exists. The affiliate marketing is doing it through large affiliates. They touch them quickly. The relationship is not, nearly as tight, it’s the Kardashians, right? You influence me, I’ll buy, and then the company picks up all the resales, but the Kardashians still get our attribution or whatever. You know, I’m using them as an example, but, and then an MLM side, it’s just interesting. Like I can visualize a matrix that would be really powerful that people could just identify based on their products, the kind of people they wanna, you know, you get it. Yeah, it’s just interesting.

Richard:

Yeah. But the thing is that because of, well, COVID kicked this thing into overdrive because people could no longer go out and sit belly-to-belly with somebody and tell them about the product. So for two years they had to find other ways to do business. And so that I think accelerated the move from traditional MLM, which is the belly-to-belly selling affiliate style approach to multi-level marketing. And so I’m seeing within the MLM space that a lot more MLM companies are saying, hey, we’re going to deal with all the hassles, we’ll connect with the companies, you bring us the customers. And what we will do is we will together with you, market to these customers and sell them our products. And so what’s happening is that the MLMers are becoming much more, let’s call it, affiliate-oriented people rather than the traditional MLM. Because in the old days, what did we do? We’d have a party, we’d get together with a bunch of our friends, we’d sit around a coffee table, we’d show them the products, they’d place an order and we would go and collect the products from the company and deliver the products to the client. Nowadays, I have a QR code on my phone. I say, even if I do a party, I go around the house and I give everybody my QR code or I put it up on a board. Everybody snaps the QR code, it drops them into the e-commerce store. They place their orders, the product is delivered straight to them. The whole thing is done and handled by the company. Now the advantage of that is the company now owns the customer. So the advantage to the company is just phenomenal because even if the affiliate leaves, the company still owns that customer and can continue to market to the customer. But the benefit to the affiliate is even if the affiliate isn’t working aggressively in the business, the company is marketing directly to their client base and they continue to earn. So the… the move towards a more affiliate-oriented MLM play seems to be taking off and seems to be gaining a lot of traction out there. And the traditional forms of doing MLM seem to be, I won’t say fading into the background, but much less prevalent. I mean, you’ve got a prime example. Your RapidFunnel product, absolutely awesome product, but a large chunk of what happens there is I send out my link. The person connects with company produced material. They then make a decision, they click on a link, they register, they sign up, they buy the product, they do whatever. My connection and contact with them is just a case of continuing to send out the link and continuing to have them engage with me until such time as they buy. And everything that I’m doing is created by the company. So the company creates the links and creates the advertising, creates the marketing material. I have my RapidFunnel App on my cell phone and I’m just pushing this information out. And because of how you’ve structured the RapidFunnel application, I can push out a hundred leads a day if I want to. I can push advertising and marketing to Facebook or Twitter or to Instagram or to whatever. I can be pushing this information out there and reaching my entire extended network without actually breaking a sweat. Now, The cool thing about it is that everybody’s got probably a thousand people in their phone book. So you’ve got a hundred thousand people who each connected with a thousand people every month, and suddenly you’ve got millions and millions and millions of people that you’re connecting with easily. And so from a point of view of where the affiliate marketing goes and where the MLM goes, I am seeing that because of these strategies, because of people like you with… with the RapidFunnel App, I’m seeing the MLM companies veering towards traditional affiliate style marketing, but using all the power of the compensation plan to drive the affiliates to say, hey guys, this is a much better plan. And I see the affiliate marketing people veering towards MLM because they’re looking for ways to reward people and provide people with greater opportunities within their business.

Patrick:

That’s well said. No, it’s so well said and it’s going to be interesting. For some people, it’s incredibly scary and for some people, it’s incredibly exciting – and it’s the exact same thing. You know, our perception really matters here because it’s going to settle in a little bit on something. There’s going to be some really big winners for those companies that are willing to think outside the box and don’t destroy their core model in the process. You know?

Richard:

Well, we’ve got a client in South Africa called AVBOB and they sell funeral policies. Now let’s just be honest, funeral policies are probably the least exciting product on the planet to sell. I mean, really. So they’re selling funeral policies. The first thing is that we haven’t even launched the business and we’re going to have 6,000 distributors right now in the company. So the company’s on a vertical climb and there’s a couple of reasons for this. But the big reason is the simplicity of doing the business, because all they have to do – send out a link. The link gets picked up by the company, the company phones the client, makes the sale, and then the affiliate earns commissions. And it’s a proper MLM commission structure. We’re using a binary plan, we’ve got a retail commission, we’ve got leadership bonuses, we’ve got incentives and recognition. It’s the whole MLM play.

But there’s videos, I must actually send you some when I get a chance, but there’s videos of these guys, these leaders, dancing in the streets and singing songs about AVBOB and singing songs about how the business is exploding. And I mean, just… it has created a buzz in South Africa like nothing I’ve ever seen. And it’s because of the implementation of the affiliate strategy within the multi-level marketing space that is just… causing this thing to absolutely explode. And as you know, we’re wanting to… we are in the process of implementing the RapidFunnel App. And I think that that is gonna take this to a whole new level. It’s going to absolutely, I think it’s gonna take this whole business and move it to a completely different space. And because of the growth and the scale of what’s happening, we have got… other massive companies which I’m not allowed to talk about who want to get in on that play. So it’s I think again you know what you were saying about the affiliate side and the MLM side, I think that there’s a convergence there. If you have a look at…

Patrick:

There really is. It’s exciting. And I attended the ANMP, the American Network Marketing Professional Association event this past week and spoke there and all that. And it is a merge of understanding, these digital marketers have kind of owned this space where they’re very good at disseminating information in the social media world, and then getting attribution through cookies and clicks and conversion. And the evolution of that is, you know, certainly within our platform and the things that we’re working on together is that you deliver all of that to an independent rep where they don’t have to be the influencer and that they don’t have to create all this stuff. We create it, we deliver it to them, now they deliver it to their smaller micro-niche channels. And all of a sudden you have this exponential… I mean, you think an influencer is big that has a hundred thousand people. Well, go take a thousand people that each have, you know,

Richard:

A thousand people

Patrick:

A thousand people…

Richard:

And now you’ve got a million

Patrick:

A thousand people that have a thousand people, that have a thousand people…

Richard:

Hundred percent!

Patrick:

And the multiplier makes that single influencer look comical…

Richard:

Exactly.

Patrick:

All the tools are pre-built, but that historically has been the problem. And it works in affiliate marketing, it works in direct sales and it works in MLM. It’s a… anyway, listen, hey, tell us as we wrap up here, Richard, MLM for CEOs. I am super excited. I mean, I’ll just tell everybody listening. I think you’re one of the brightest minds in the entire space. You’ve been around it and you just know it so well, and I love the channel. Talk to everybody about… who is that channel for, ideally? You’re doing a lot with consultants and service providers and all that. Talk to us about the vision for MLM for CEOs now and where it’s going.

Richard:

Well, the key thing is that when a CEO decides that he wants to look at MLM as a route to market, and it could be MLM, it could be affiliate, or it could be a hybrid of the two, it could even be direct selling. When they’re deciding to look at that, it’s because they’ve experienced how difficult the traditional retail space can be. And they’re looking to increase their margins, they’re looking to increase their reach, they’re looking to expand their market radically and quickly. And they discover MLM. And what MLM for CEOs is there for is to say to them, look guys, this is what you need to know. So what I’ve done there is I’ve created, I don’t know, I must have with, rough guess, two to three hundred hours of video content, where A: I’ve created content that specifically talks about every aspect of the business, how to create a compensation plan, how to run an incentive, how to do a recognition, all of those kinds of things. But where I’ve also interviewed the top people in the world who have been involved in running the top companies like ex-CEO of Avon, the person who runs the whole of Europe and UK and the east in Amway and some.. like heavy hitters. I’ve been interviewing them and talking to them about their experience in the industry, what they’re doing now, how they’re seeing the industry changing. So when you go to MLM for CEOs, there’s all of these great minds, all of these people who, to be honest with you, Patrick, knock me into a cocked hat. These guys are highly experienced. I mean, guys like Mark Beiderwieden, who ran the whole of Europe in the East in Amway, just amazing characters. And so it’s people like that who I’m talking to. So if you’re part of the C-suite and you’re thinking of getting into the MLM space, then there’s two to three hundred hours of content that you can listen to. And it talks about every aspect of the businesses – the good side, the bad side, what is a pyramid scheme, how do you create compensation plans, everything. And then the other thing that we’re doing now with MLM for CEOs, we are assembling all of the top people in the industry worldwide. People who have got really valuable services for the industry, and we’re trying to pull them into a single space. So that if you’re part of the C-suite and you need compliance, we can provide you with compliance people in your area. If you’re looking for mechanisms to grow your business, we can provide you with mechanisms, like RapidFunnel, to help you grow your business. If you’re looking for software, whatever you’re looking for, we can provide you with the gateway to the right people who can actually help you to set your business up. And I can tell you right now, nothing replaces having an expert in your corner to grow your business, especially a space that you’re not familiar with. You get them in, they shortcut all of the pain, and bear in mind that these businesses grow crazy fast. I’m just going to do a quick calculation because I’m a bit used to this with my maths… So on average, an average size multilevel marketing company is 30,000 people. The average amount of sales, for example, in Europe is about 2,500 rands per… 2,500 euros per MLMer. So if you’ve got 30,000 active multi-level marketing distributors…

Patrick:

That’s annual sales?

Richard:

Annual sales, yeah. You’re doing about 75 million euros a year.

Patrick:

Mm-hmm.

Richard:

Now 75 million euros a year, that’s a reasonable size company. Now that’s just average 30,000. A company like Amway’s got millions of people. They did 11 billion dollars a couple of years ago was their top turnover. Avon also, somewhere in the 11 or 12 billion dollars… so an average size company will generate about 75 million euros. So when you start these companies, if you think about, if you’re trying to start a tuppenny ha’penny company… well, this is the wrong space to be in, because if you get it right, this is literally a license to print money. 

Patrick:

I think that’s the biggest thing, right, is if you get it right. And so many fail, but they fail just because they just didn’t have quite enough knowledge or they couldn’t avoid the landmines that are in front of you. I mean, they’re above the water, you can see them, your ship’s going through, but there are landmines and there’s a lot of history here. And with a little bit of education, you really can protect yourself from the high failure rate. Right? Would you agree with that?

Richard:

Well, it’s even more dangerous than that, because what happens is companies come in, they don’t understand the compensation plan. So they put a compensation plan together. They don’t realize that they are falling foul of the pyramid scam rules. Next thing, there’s a team of police sitting on your doorstep, taking your car and your house and your wife and your children and putting you in jail. And so this is not a space to mess around in. You cannot mess around in this space, because the consequences are dire. They call it a Ponzi scheme and you go to jail. You know, you do not pass go, you don’t collect 500, you go straight to jail.

Patrick:

And people are creative too. And if you don’t understand the unintended consequences, structure drives behavior, incentives drive behavior, you get the structure wrong, you get the incentives wrong, and all of a sudden you’ve been gamed to death by very creative people, and it’s completely your fault.

Richard:

100%.

Richard:

I say to people, look, if you are serious about starting a business, you need to understand you’re starting a multimillion dollar business. You’re not starting a small business, you’re starting a multimillion dollar business. And you need to get people in your corner who can actually help you run and manage your business. One of the things that we’re doing with MLM for CEOs, we’ve got this thing called the Partner Program, where we go into the business as, let’s call it, full-time consultants. We take a position in the network, that’s how we get remunerated, and we help the company go from zero to a million dollars a month in turnover. And so our goal is to be in the company’s corner to really drive that process, to give them 30 odd years, 35 years of experience to build their business. And so that’s something that we are looking for. We’re very careful about who we take on because we have to be able to work with the person, they’ve got to be receptive to the ideas. A lot of CEOs are A-type personalities, and they obviously know exactly how to do everything – and very, very difficult to swing them in any direction. So we need to have people who accept that there’s a way to do these things. And then we, you know, we interview in companies, and those companies who are excited about this concept, we go in there and we partner with them, and we help them succeed. So anyway, that’s kind of the story of MLM for CEOs.

Patrick:

I love it. How do people, if they want to reach you directly, Richard, what’s the best way for them to do that?

Richard:

Well, the first one would be richard@netready.co.za. So that’s richard@netready.co.za. What you can do is you can check me out on my LinkedIn account, which is Richard Sletcher. That’s S for Sally, L-E-T-C-H-E-R, Richard Sletcher. And then we have got a YouTube channel called MLM for CEOS. That’s MLM, F-O-R, C-E-O-S, where we’ve got all of our content and that’s free. There’s no cost or charge to that. You can go along, all of that content is absolutely free and open. We just want to really, in that space, help as many people as is humanly possible.

Patrick:

Richard, it’s always good spending time with you, my friend. I always enjoy it. Thanks so much for being on the show.

Richard:

It’s been an absolute pleasure. Thanks a stack, Patrick.

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About Richard Sletcher

Richard Sletcher has deep network marketing knowledge. He’s spent the last 35 years involved in the MLM industry, as CEO and consultant to multiple successful companies, and as CEO, COO and Chief Architect of Netready, specializing in MLM, Direct Selling and Party Plan software. Richard has helped some of the biggest companies in the world achieve success in MLM and is passionate about working to alleviate South Africa’s unemployment rate.

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