Network Marketing Scam

Network Marketing = Digital Pyramid Scheme

Old wine in new skins. If you hear and read about “Network Marketing” more often, just remember: This is not the new hot shit in digital marketing, but a new fancy word for “pyramid scheme”.

I became aware of the topic “Network Marketing” through the documentation of Ctrl_F Network Marketing: Fast Wealth? As an old digital marketer, I directly felt my honor had been seriously injured: Why do I not know this new channel? How can I use it? Am I perhaps no longer on the pulse of time? Can I hang up my wireless keyboard directly on the nail?

In fact, after the documentation I was able to unscramble myself. Nothing new, a lot of jabbering and a systematic approach that evokes both admiration and disgust in me.
But take a look for yourself, maybe you will notice it yourself:

Video: Network Marketing: Fast Wealth?

My first impression of the video was actually very positive towards the company’s approach and critical towards the journalist’s hypothesis: Two former Bitcoin guys have a great idea for a digital business and do contemporary recruiting (via streams), PR and marketing. In doing so, they show the old economy that their kind of promotion is outdated. But after a few minutes, this impression changed and at 6:15 a.m. I even laughed out loud. The realization behind it:

The guys from Pulse Empire have fed the 100-year-old structured sales organization with digital tools and are now remotely following in the footsteps of every sales pusher colony in history.

The images of Mehmet E. Göker and his company MEG, as well as various AWD financial advisory practices, quickly came back to my mind. Characteristic here above all:

  • Every salesperson profits from the sales of the sales people he/she has acquired
  • The product that is being sold must be understood almost not at all or only roughly by the people who sell it
  • It is advertised to the outside world with thick cars and champagne, which in most cases is only reached by members who were either there early or have an almost psychopathic sales mentality.
  • The majority of the team is made up of people who either joined the team as lateral entrants or who have a rather bumpy resume until they join (the system is aimed at followers).
Pulse Empire trailer
they live big and attract by promises of great success

Even though there may be a hint of admiration for the development of such a massive distribution network in some parts of the documentation, I would like to expressly warn every reader:

Don’t fall for this or any other company that suggests you can earn big money with “Network Marketing” or become part of a superior business model!

Especially worrying in the example of Pulse Empire:

Network Marketing Scam
… your job is to get Leads into the call …
  • The people who recruit new sales staff or tipsters do this partly from their own children’s room and have no idea in which system they are working
  • Existing sales staff sell or broker a product (trading) that they do not understand and whose potential return they cannot credibly assess or calculate
  • Sales events and recruiting videos are produced and staged with maximum manipulation. This means that even enlightened, rational interested parties can jump at the suggested stimuli (wealth, affiliation, fame) and feel attracted to the system.
  • The system of permanent recruiting can destroy the social ecosystems of the participants in the long run. For example, it is actively recommended to approach friends, acquaintances and family.
  • There is a suspicion that funds or initial investments are first used to serve the commission pyramid upwards before the money is put into the actual “financial product” that is being brokered.

I am less critical of the remarks made in this article regarding the legal forms and entities behind Pulse Empire. Even if it is very shady, some of the constructs are sometimes necessary to ensure a smooth business operation. Furthermore, the product in the trading segment is not negative per se. However, it is very doubtful that the shown visitors of the events are able to intellectually process the mechanics behind it. It is also very doubtful that this type of investment is a valid way of investing for a large part of the customers.

Related Videos: Network Marketing

Since I immediately started ringing the bells towards the pyramid system and I came up with two or three other examples, I have put together some related videos for you to watch:

System megalomania – Mehmet Göker

System Grössenwahn - Mehmet Göker | doku

Only the boss makes a profit – Maschmeyer’s sales tricks

Nur der Chef sahnt ab – Maschmeyers Verkaufstricks

Michael’s Pyramid Scheme – The Office US

Here the whole thing is shown much better and more funny:

Michael's Pyramid Scheme - The Office US
Christoph Kleine
Christoph Kleine

... is Managing Director at THE BIG C Agency & founder of Besides Online Marketing he works on issues of Usability, Web-Analytics, Marketing-Controlling and Business Development. Xing, LinkedIn.

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