What To Say To Is This A Pyramid Scheme
Below is a MRR and PLR article in category Business -> subcategory Marketing.
How to Respond When Asked, "Is This a Pyramid Scheme?"
Introduction
During a recent discussion following a post about pyramid schemes, many were eager to learn how to respond when someone asks, "Is this a pyramid scheme?" Before crafting the perfect reply, it's essential to evaluate whether your company?"or your actions?"might unintentionally resemble a pyramid scheme.
Key Considerations
1. Is Recruiting the Focus?
If recruiting is the primary focus, this might raise concerns. According to Douglas Rushkoff's book, Coercion, a pyramid scheme is characterized by prioritizing the recruitment of new members over the product itself. This can lead to the impression that selling distributorships is more important than the actual products or customers.
2. Evaluating Payment Structures
A quick review of different company pay plans often reveals a significant emphasis on recruiting. Many companies direct a larger portion of their financial incentives towards recruitment rather than customer sales, suggesting that recruitment is indeed more lucrative.
Analyzing the Pay Plans
- Customer Orders: Typically range from $85-$120 with commissions of 0-7%. In some companies, no payment is made unless the distributor reaches a specific company level.
- Recruitment Bonuses: Range from $50-$350 for sign-ups, far outweighing the benefits from simple customer orders. This setup incentivizes prioritizing recruitment over direct sales.
Companies heavily weighted toward recruitment can give off the impression of being pyramid-like. Naturally, reps prioritize where the monetary rewards are highest.
Responding to the Question
When someone asks, "Is this a pyramid scheme?" consider replying:
"Let me explain what we do, and you can decide whatever you want to call it."
Pause
"We market products directly to consumers, like you and me, and partner with others interested in doing the same. Do you think you might be interested if I showed you how it works?"
Conclusion
Ultimately, the best response involves transparency about business operations, letting others form their own opinions. Feel free to share your own effective responses in the comments.
Stay tuned for additional strategies and insights in future posts!
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