Have We Reached Saturation?
By Len Clements © 1999
At one time in the long history of multi-level marketing – decades ago, in fact – there was a great concern by both MLM participants as well as state and federal regulators that there would be an inevitable point of market saturation that would cause the entire industry to come to a painful, grinding halt. Well, in over half a century we’ve managed to tap less than 10% of the US population (even counting all those who tried it, quit, and will never try it again). Guess that saturation thing isn’t going to happen anytime soon.
Well, at least not distributor saturation.
Unfortunately, we have another concern. It’s opportunity saturation.
I read a somewhat amusing article the other day by a well respected MLM guru who was claiming that the network marketing industry is “booming!” His rationale for making this tired, almost cliché exclamation was the massive number of MLM company start ups that have occurred in recent years, and are still occurring today. Now, I don’t have a PhD in economics, but I’m pretty sure an industry “booms” when the number of customers for a particular product increases on a mass scale, not when the number of peopleselling the product increases. This is basic supply and demand. An industry booms when the demand booms, not the number of suppliers. In fact, when supply far outstrips demand is one primary cause for a major industry slump.
Call me a cynic, call me a pessimist (ah, if I only had a dollar for every time someone did…), but from my view, I’d say we’ve been in an industry wide slump for about four or five years. Sure, the number of MLM companies is increasing at a phenomenal rate, but many times greater than the demand!
One (of many) indicators of this “opportunity saturation” is the way companies today are stepping all over each other with their corporate names. I mean, there’s only so many ways to combine “Life,” “New,” “Health,” and all or part of “American,” before we flat out run out of company names!
I recently did a search of my MLM company database which, keep in mind, contains less than half of the approximately 1,200 companies out there, and found no less than 35 companies with the word “Life” in their name. Thirtyfive! There was Vision For Life, and Nutrition For Life, and Renaissance For Life, and there was just 4Life. There was LifeSciences Technologies and LifeScience, Inc., both of which smushed the first two words together.
There were a mere dozen with the word “Health” in the name and seven used the word “Body” including Royal Body Care, Total Body care, and Nature’s Body Care (who used to call themselvesAustralian Body Care).
There’s Excel, the telecommunications company. But, don’t stutter when you say their name. People will think your talking about E-Excel.
The two I get confused by the most are Nato and Natus. And now we also have N.A.T.A.L to go along with Matol.
There’s FutureNet, Furturewave, and Future World. And speaking of the future, here’s some for you Star Trek fans: Voyager, Trek Alliance, and New Generations. As of this writing, there is no MLM company called Deep Space Nine, Incorporated. Give it time.
I had a contest in my newsletter to see how many MLM companies, living or dead, had the word “way” somewhere in their name. Amazingly, only ten could be found. They were: Kingsway, Richway, Jewelway, Neways, Greenway, Jetway, Easy Way, MultiWay, American Freeway 100, and of course, Amway. Any others?
The last thing we need is for existing companies to renamethemselves. Images International claimed, several years ago, that they had to change their name due to a trademark conflict. They became Neways. Recently, Image International launched (now companies are retreading old, abandoned names!). Maybe, to avoid confusion, we could call one company “Old Image International” and the other one “New Image Inter-” nope, can’t do that. There’salready a New Image International!
Speaking of “New,” apparently there are so few words left that can be attached to the end of this word (Nu Skin, New Image, Neways, Nu Directions, Nu Care, Nu Botanical, New Resolution, New Vision…) that a recent start up decided to just call themselves “New.” That’s it, just New. Okay, technically it’s New, Inc.
“Image” isn’t the only example of resurrecting dead company names either. A few years ago some ex-FundAmerica guys tried to restart that program and called it FundAmerica 2000. Great idea. Let’s take a company that was just shut down for being an illegal pyramid scheme, which made the news on every major network in the land, and who’s founder was brought up on criminal charges and sent to prison – and call our new company by the same name!
For some reason, no one wanted to join FundAmerica 2000. Strange.
Less than three years ago a company ironically titled Momentum went out of business. Personally, and this is just me talking, that’s way too soon to be calling a new start up “Momentum.” Even if you put “Health & Nutrition” after it, as one just did.
Why?, you might ask.
Because us distributors have a penchant for referring to our companies by the fewest possible words, omitting them from right to left. For example, do you really think distributors in “Health Dynamics, a Division of Terra Forma Incorporated” really call themselves that? (Actually, some do – and it’s kind of painful to hear them do it). Let’s reduce the words, from right to left, until we get to the minimum that makes sense. Does “Health Dynamics a” make any sense? Mmmm, I think we can go a word or two more. How about just “Health?” Nope, one word too many. And yes, in fact, most reps do call this company “Health Dynamics.”
Imagine the confusion between companies like 21st Century Global Network, and 21st Century Nutriceuticals. I recently made a negative remark about the former on my radio show, and got calls and letters from the latter who were not at all happy. Why? Because I did the same thing! I lopped off “Global Network,” as most others do, and just called them “21st Century.” You’d think this problem was solved when 21st Century Global Network was absorbed by Legacy USA. But, alas, we still have 21st Century Collectables and 21st Century Network! What’s more, Legacy Health Solutions will likely use the same minimalist method that Legacy USA reps will use – and they’re both call themselves “Legacy.”
Fortunately, Legacy Lifeline is no longer with us. Well, at least until some new start up thinks it’s a cool name.
Heritage Health Products, which is commonly referred to by their own reps as just “Heritage,” probably won’t suffer as much confusion with the now defunct International Heritage Inc.. You can drop the “Inc.” but that’s about it. IHI was rarely referred to as just “Heritage” because that would require dropping a word from the front end. Never happens.
Another example would be Longevity Network (drop the Network, call it Longevity), and American Longevity (can’t drop a word from the front, so it’s always the whole “American Longevity”). There’s also weird hybrid names like Youngevity (yes, there really is one).
Okay, so what about Mannatech? (which, by the way, used to be called Emprise – when there’s a shortage, corporate names should be rationed one to a company!). You’d sure think this company name would remain unique, wouldn’t you? Well, ask a MannaValley distributor. Of course, when the words are conjoined you don’t drop one. I don’t think anyone’s going to claim to be a distributor for “Manna.”
Rumor has it that the management of Renaissance For Life was fit to be tied when some folks who spun off of Destiny (Telecom) started another calling card deal and called it Renaissance USA. And, you betcha’, everybody was calling them both just “Renaissance.”
Since there is at least a (verifiable) 92% failure rate among start up MLMs, most of these name overlaps take care of themselves, as was the case with the extra Renaissance. But, here’s the ironic twist to this story. The owner of Renaissance For Life launched yet another MLM company (they’re calling it a sub-division) and called it Advantage International Marketing. There’s no other company with a first name of “Advantage” (is there?), so, what’s the problem?
Well, there’s one more thing we all love to do with our company names. Make acronyms out of them! Right? Nutrition For Life is “NFL.” American Communications Network is “ACN.” National Safety Associates is “NSA.” Staff Of Life was “SOL” (which probably explains why they changed their name to R-Garden). So, guess what Advantage International Marketing is called? That’s right. AIM. Guess what the much older American Image Marketing is called? That’s right. AIM!
Some companies have really cool names. I like Usana (anything with the word “Sauna” in the title works for me). Longevity, of course. Integris works. I’ve always liked the name Vaxä, even though I have no idea what it means. Equinox is a beautiful name (too bad it’s such an ugly opportunity). And I’ve always liked the old, homey sound of Watkins. Thank God the founder wasn’t named Manson, huh?
In their apparent desperation to come up with a neat company name, with so few still remaining, some companies, it seems, had to take from the bottom of the barrel.
I’ve never liked the name “Changes.” I know how much we distributors hate changes – that is, perpetual changes to the comp plan, changes to the products, changes to the marketing system,changes to the company name… I don’t want “changes.” I want consistency. I want solidity. I want to be a distributor for Stability International!
Or, how about Jackpot International? Or, Millionaire Maker’s Inc.? Why not just get a megahorn and stand outside your state’s Attorney General’s office and yell, “We’ll a pyramid scheme, we’re a money game, investigate us PLEASE!!!”
And who came up with the idea to launch a company called “Y2K International?” Why not call it “Paranoia International.” Or, “Hysteria International.” Or, I got one – how about “Armageddon International!?”
I wonder… What is Y2K International going to call themselves next year? Y2K1?
No discussion of the MLM Name Game would be complete unless we gave a little attention to the screwy games we play with what we call this entire industry.
Back in the 1950’s, when Shaklee and Amway first began, this form of business was called only one thing – multi-level marketing. Today, you may here it referred to as; Personal Marketing, Consumer Direct Marketing, Direct to Market Selling, Direct Marketing, Home Marketing, Dual Marketing, and unfortunately, even Pyramid Sales (with no negative connotation intended). I’ve even heard it referred to as “Multiple Layer Retailing,” and “The UnFranchise.” Give me a break!
The most common alternative title is, of course, Networkmarketing.
Why so many aliases? I theorize that it has a lot to do with the negative image that the term “multi-level marketing” still brings with it. There are so many people that still associate this term to pyramids schemes, fly-by-night rip-offs, home party demonstrations, door-to-door sales (ding-dong), and really boring products like soap and scrub brushes. One way to avoid this stigma is to create a whole new identity. I think companies just wanted to present a new, fresh image of the business.
I once called a Mary Kay representative, many years ago before I knew better, and told her I was interested in getting information on “multi-level marketing” businesses. She curtly told me that Mary Kay is not a multi-level marketing company. They use a form of business called “Dual” marketing. When I questioned further as to the nature of this seemingly new way of doing business, she explained that in dual marketing you make money two ways. You can buy the products wholesale from the company and resell it at a profit, or you can sponsor others to sell them and you make a commission. Duel. Two ways. I was still confused.
When I asked her if these people you sponsor can also sponsor others into the business and do you receive a commission off their sales as well, she said definitely yes. Okay. So all these people are “marketing” the products? Yes, she replied. And they are marketing the products on different “levels” below you? Yes. On “multiple” levels? Yes. They’re marketing the products on multiple levels? Yes. So it’s multi-level marketing? NO! It’s dual marketing.
I really question whether or not all these pseudonyms really have much effect on uninformed prospects, anyway. Many times I’ve used the term “Network” marketing, only to have my prospect respond with, “Oh, that’s like multi-level marketing, isn’t it?” When I agree, they sometimes come back with, “Is this like one of those pyramid schemes?” Very rarely do they not do the math.
Call it what you will, it’s all multi-level marketing in the literal sense. They’re all marketing products on multiple levels.
If anything, I think we should just all just stick with MLM or Network marketing. Anything else might seem as if we’ll trying to hide something — as if we’re not too proud of what we’re really offering.
If that’s how you really feel, best you call it “quits.”