With the new year just over a week away, we’ll be spending the remainder of 2016 looking ahead to what we think is on the horizon for customer experience in 2017. From pyramid schemes to knitting robots, we foresee 2017 to be a year full of surprising reinvention, unprecedented opportunity, and sci-fi like possibility. First up:
The Return of the Pyramid Scheme: A New Incarnation of MLM for Millennials
For decades, MLM (multilevel marketing), the controversial recruit-to-sell business model made famous by Amway, has contentedly confined itself to the cul-de-sacs, kitchens, and cars of moms, the middle-aged, and Mormons. But in the past several years this has started to change. The rise and fall of Vemma, an MLM energy drink company that recruited thousands of college students across the country to sell its energy drink with false promises of lucrative earnings and just days ago settled a case brought against it by the FTC for operating a pyramid scheme, suggests that millennials are ripe for the pyramid-scheme picking.
Millennials, unlike their parents, may not be wont to download a computer virus or wire money to a stranger they meet on a dating app, but the popularity of social selling and buying and the success of influencer and guerrilla marketing with millennials suggests a vulnerability to the appeals of MLM–autonomy, empowerment, and authenticity–and to the risks.
In 2017 we expect to see more MLM companies take shape and target millennials in a similar fashion to Vemma: by selling them more than a product, but also an experience—the experience of recruiting their friends. While this experience can have many rewards, whether it be the satisfying feeling of being part of a movement, of making a difference, or of taking charge of one’s own destiny, (and we have seen that millennials are willing to pay for these things), such experiences don’t always pay out equal to their investments.
While many companies are already doing their best to appeal to the better impulses of millennials (charity, social and economic impact, personal empowerment), MLMs are inclined to take this a step further, promising monetary rewards and delivering only on experience, while reaping all of the financial benefits. For this reason, when agreeing to use their influence to sell, advocate, and recruit for a company, millennials should be as scrupulous offline as they have always been online, and be wary of anything—no matter how authentic, empowering, or impactful it may appear—that seems too good to be true.