No, Network Marketing is NOT the same as Multilevel Marketing.
Network Marketing is often also dubbed as Referral Marketing.
What Marketing Information Channels are available
We have only 4 ways to do marketing:
- Uni-directional advertising
- Public Relations
- Direct Marketing/Bidirectional Advertising
- Network/Referral Marketing
That`s it. No more channels available. And these two channels are the only realistic marketing channels for IP lawyers and patent attorneys: Direct Marketing/Bidirectional Advertising and Network/Referral Marketing.
If you want to find out why, please check out my free Marketing & Sales Bootcamp.
Now what is Network/Referral Marketing
Network marketing or “networking” is explained best in comparison with hard selling, which is a special form of Direct Marketing.
It is important to know that networking events are often abused to aggressively sell stuff. That abuse does not render network marketing useless. One must be aware of the difference between hard selling and networking in order to understand the advantages (and disadvantages) of network marketing.
A sales process that is going on between two people has always the goal of the sale of a product or service.
When doing network marketing, this sale would deliberately not take place during the initial conversation between the two persons, but it would only be a later consequence of an earlier contact that has been built up with respect and care.
In other words, the actual sale itself is NOT the goal of network marketing.
Mindset Comparison between a Hard Seller and a Network Marketer
What applies to both good hard sellers and good network marketers is that they let others always talk more than they do themselves: they listen carefully to their targets and they always encourage them to tell more.
But there are some very distinct strategic differences in the mindsets of a good hard seller and a good network marketer. Hint: a “target” is a qualified potential customer, while a “contact” can be anybody.
A good Hard Seller:
- listens carefully in order to find out a specific need in a target,
- wants to satisfy this specific need of the target by his product or service,
- asks questions in order to be able to position his product or service better, and
- finds only those people interesting that qualify as targets.
A good Network Marketer:
- listens in order to find out what information can be useful for the contact,
- wants to help the contact so that the contact can better achieve his personal goals,
- ask questions to be able to be of better assistance to the contact’s needs, and
- finds everybody interesting as a contact because he knows that one can never be certain of who they know and what they know.
The core Difference in the lifestyles of a Hard Seller and a Network Marketer
A good hard seller tries to bring the attention of the target to their own product or service. The goal is the sale, and people are often only a means, a resource, and sometimes even seen as a necessary evil to reach that monthly sales goal. As a consequence of that, a hard seller is focused on the short term success.
In contrast to that, a good network marketer would start to recommend products or services of his contact to other people in his own personal network. As a consequence, a good network marketer puts all his hopes on the long term success.
Example of the Difference between Hard Selling and Network Marketing
The following is a famous example that I have encountered many times when reading about network marketing:
“A salesman of fire extinguishers meets the manager of a local bank company at a reception of the Chamber of Commerce.
The hard selling salesman convinces the purchase manager to buy fire extinguishers for his office. He is a good salesman and so he manages to sell 5 fire extinguishers for a total of 250 EUR.
The salesman perceives the reception as a successful event.
The network marketing salesman is interested in the bank manager as a person. He learns that the bank manager just passed the sailing license exam and that he is now looking for his first own sailing boat. The salesman remembers that a friend of his has a starter sailing boat for sale. He not only tells this to the manager, but he also provides them with each other’s contact details the following day. A week later the sailing boat has a new owner, and the bank manager also joins the sailing club where the sales manager’s friend keeps the sailing boat.
Four months later the salesman receives a phone call from the bank manager. The manager asks him to deliver five fire extinguishers for the office, and also for the facilities of the sailing club of which the manager recently became a board member. Moreover, the bank manager proposes to write a letter to all members of the sailing club with a recommendation for the fire extinguishers of the salesman.
All that results in a total of 8 new clients, with 50 fire extinguishers sold for 2,500 EUR.”
Now that is a more realistic business, as compared with only 250 EUR for 5 fire extinguishers.
I recommend the book “The 29% Solution: 52 Weekly Networking Success Stories” by Dr. Ivan Misner, available here for less than 10 US$. Almost my entire own network marketing knowledge stems from that single book.
It also helped me to join the BNI network marketing organisation, here. If it works for me, it may also work for you. Not only because of the excellent courses that the BNI organisation offers. The weekly BNI meetings are also a very forgiving training ground for honing your self-presenting skills.
Tip: don´t believe the nonsense that is written about BNI in the Internet. I have recorded this 37-minutes-long explanation video for you.
I myself like both: hard selling and network marketing. Both channels work for me, and in many areas.
Hard selling is good if there is a limited supply of goods or services for a multitude of potential buyers, and you want to maximize your revenues. For some people, hard selling is not an option because they cannot live with rejection. While I understand that weakness, I do not understand why these people don’t address it properly.
Network marketing is good for making networking events less stressful: just collect name cards, keep asking what you like, take notes on the name card, and enjoy the event.
As compared with hard selling, network marketing can be learned more easily than the hard core selling. However, network marketing needs a lot of patience and also a diligent pursuit of a network marketer’s lifestyle, supported by modern CRM software.
Admittedly, once network marketing becomes a natural part of someone’s lifestyle, one cannot live without it anymore.
Call to Action
Just give it a try. Invest 10 US$ and buy the “29% Solution” book and then sign up and attend a free nearby BNI meeting.
Martin “Givers Gain” Schweiger