When people come to fitness experts for help, many of them come vulnerable and desperate to make positive changes to their health. Fortunately, there are well-trained personal trainers who have these people's best interests at heart.
There are some fitness experts, however, who are less than ethical when it comes to training clients and running a profitable business.
Business systems that rely on multi-marketing plans are often associated with shady marketing strategies and the companies from which the scheme originated. In this post we'll discuss whether multi-level marketing in the fitness industry is really so unethical. Or is everyone just blowing smoke?
What is Multi Level Marketing?
Multi Level Marketing (MLM) is a marketing philosophy that utilises the power of face to face recommendations and referrals to sell a product. MLM companies usually sell things like:
To recruit people to sell these products, the scheme usually offers:
In other words they're all selling the dream.
For success in MLM you need to recruit people so that you can make commission from their sales. These recruits are called your downline.
While this does look very much like the illegal Pyramid scheme, the main difference between MLM and a pyramid scheme is that while a pyramid scheme recruits people to recruit more people to sell a product, every recruit in the MLM scheme is selling the product.
While the main perk of joining an MLM company is the ability to be your own boss and work from home, most MLM companies have extremely tight terms and conditions that stipulate exactly how you can market and sell their products.
Furthermore, you're often forced to sign contracts that can be changed at any time whether or not you agree with those changes.
All promotional material often has to be approved by the company and any promotional material you do create on your own is owned by the company.
Starting to sound less and less like being your own boss?
That's because you're not. Technically,you're running somebody elses business for them but not getting paid a wage to do it.
But who needs a wage when you can generate $2,000 a month.... right?
How to Get Started with MLM
Still with me? Then you're probably wondering how you even get started with an MLM company.
If you haven't already been approached by a recruiter for one of these companies, you can easily find one online and order your MLM starter kit.
Each company starter kit varies in price from $100 all the way up to $1,200. Usually sold as an investment to build your future.
Starter kits often come with informational resources on how to sell their product but in some cases you'd also be required to participate in several training days at a cost to you.
Does Multi Level Marketing Work?
Absolutely... Well, it works for the company and around 1% of the recruiters. That means that there's 99% failure rate that often leads to family feuds, alienation and even divorce.
To actually make a significant amount of money you'd need to climb to a level where you're actually being paid by the company.
For example, only 10% of Herbalife members are eligible to earn payments and only half of those earn on average $306 per year.
Only 0.8% of Isagenix members make more than $1,500 per year. That's $125 per month... but only for the top 0.8%. Wow.
And that doesn't take in to account the expenses incurred from having to market your own products, pay for your own fuel, pay for your own phone and to actually buy the product from the company.
Yes, you have to buy the product first before you can sell it!
Is Multi Level Marketing Ethical?
On to the important questions.
While the pros and cons of MLM aren't exactly in favor of the recruiters, I'm more concerned about whether it's in favor of the consumer. The clients. The people who need help and don't know where to turn.
So I started digging a little deeper in to what actually makes a company ethical. Broadly speaking, a truly ethical company will be one that is not:
While most MLM's don't damage the environment or use child labour, as far as I'm aware, employees do not get paid a lot, customers are exploited and the products are questionable.
So in a sense, the core ethical values of an MLM company are debatable.
But what about the people themselves. The recruiters. The guys on the ground that have to go door knocking, set up product parties and invite their friends and family, create their own marketing materials and get more recruits?
After some research on the topic the main benefits of joining an MLM company are as follows:
No where in this list of benefits does it ever mention helping clients. Ask any personal trainer why they became a personal trainer and one of their top 3 answers will always be "to help more people".
The business model is less focused on helping the consumer and more focused on turning the consumer in to a member of your downline.
In theory, there is nothing wrong with encouraging employees to seek out other talented workers. Good behavior should be incentivized. In practice, however, things don't exactly play out that way.
Since employees want the promised monetary awards or promotions from getting new recruits, many of them will prioritize their own needs over those of the client or even person they're recruiting.
They'll recruit two or three new employees, but these employees won't necessarily be competent or have the knowledge required to sell the product ethically.
Those newly recruited employees who have no knowledge of the product or how the body works (in the case of selling health products), will then be tasked with finding new employees to create a downline of their own. They'll then be rewarded similarly for their efforts.
And the cycle continues.
Think about how incentivizing recruiting in this way affects customers. Even if recruiters care about customer satisfaction, they don't have the skills or qualification to make safe and effective recommendations.
When working in the fitness industry, customer satisfaction and genuine recommendations can't afford to be anything but number one on an employee's list.
Clients come to fitness experts because they want help. They want to improve their physical appearance and, more importantly, their health. If the employees they're interacting with are more concerned with big paydays, there is no reason to think that these customers will get the best possible service.
What About the Products?
So many new people joining MLM companies because they claim to love the product. So we took a look at some of the more popular products by Arbonne:
Founded in the 70's in Switzerland, the sellers of these overpriced "health" supplements would lead you to believe that this is evidence that they should be trusted as they have "heritage" and a long history of being "trusted" as a brand. I can't comment on the efficacy of their skincare range they were founded on, but let's have a look at some of their most popular supplements...
1. Protein Shake Powder
Clocking in at an impressive £64 per pack or £47 per kilo, you'd expect this to be an absolute premium protein powder to help with your nutritional needs. Except that's not what it is.
A 45g serving of this packs
Not bad you might say?
At £2.13 per serving I'd be expecting more, especially when a serving of industry leading whey protein, containing more protein and less calories will cost you a quarter of the price.
Then let's look at the ingredients:
"Arbonne Protein Matrix Blend (pea protein isolate, cranberry protein, rice protein), sugar cane, cocoa powder, natural chocolate flavor, sunflower oil, corn starch, inulin, xanthan gum, stevia leaf extract, flax seed, gum acacia, guar gum."
Not only does whey protein score higher on the biological value score but pea protein is lacking in amino acids, namely cysteine and methionine. This makes it a relatively poor protein source. Rice as a protein source is also difficult to digest, particularly brown rice, it’s also high in phytic acid, which can hinder the absorption of minerals like zinc, iron, magnesium, etc.
And the Sugar Cane is just sugar, masquerading as a "natural source" and the sunflower oil is not the best choice of fat so far as your health is concerned.
It's also marketed as "Vegan" and "natural" playing on the common health halo scam that these products use to try and position themselves.
So, premium price, not so premium product.
2. Daily "Power Pack" for Women
A 30 day supply of this will set you back an eye watering £84! Again, at £2.80 per day I'd be expecting an absolutely top notch product.
Unsurprisingly it also fails to deliver.
They use inferior oxide versions of some of the vitamin and minerals in the product, which aren't as well absorbed by the body. Not to mention some don't even meet the recommended daily allowance, such as calcium and magnesium. The vitamin d version used (D2) is also not as well absorbed as products that contain the D3 version and it has a weak botanical blend (plant extracts essentially) and a low dose of pro biotics.
There are loads of better, comparable, products out there that costs a third of the price and have not only a better quality of ingredients but MORE of them!
Strike two for Arbonne...
3. Herbal "Detox" Tea
Quite cleverly this is sold as a "herbal infusion tea" here in the UK and that's because LOTS of people have cottoned on to the fact that "detoxing" and "cleansing" is a fad made up by greedy businesses.
And that's because it is.
Because unless you have been informed by a medical professional that you need to get rid of some toxins from your system then your liver and kidneys are doing this 24/7 anyway, or you'd be dead.
The BEST thing you can do for you health in this regard is to "eat food, not too much, and mostly plants"
A wide spectrum of fruit and veg, lean protein sources like meat, fish, eggs, dairy plus wholegrains and pulses and you'll be just fine.
A cup of Yorkshire Gold it ain't.
So there you have it.
If Arbonne's supplement range is anything to go by I certainly wouldn't now be rushing out to buy their skin care range either, or any other health MLM product for that matter.
Next time someone tries to sell you this crap at least you can politely (or otherwise) decline knowing the facts about these poor quality and over priced products.
Implications For The Fitness Industry
We've already touched on several of the implications of relying on multi-level marketing in the fitness industry. That said, we'd like to add to some points we made earlier.
As we stated, customers often get a raw deal when subjected to multi-level marketing. They come to fitness experts for help and end up dealing with recruiters who don't have their best interests at heart. The service customers get just sucks and let's be honest, if you can recruit your client, there's an issue.
These types of encounters ultimately make customers distrust the industry. They're much less likely to rely on the services after they've had bad experience after bad experience. Who, after all, is going to buy from a salesman who treats people like money bags?
The same is true of employees who never receive the "promotions" they were promised. Many of these employees quickly leave and warn others not to get involved, and that's not a good look for the industry as a whole.
So Is Multi Level Marketing Inherently Unethical?
Despite the issues we have with multi-level marketing, it's not inherently unethical. Companies can ethically partake in multi-level marketing and whether you're running an ethical business depends on your own intentions.
If you joined an MLM because someone promised you a pile of infinity money, you might not be in it for the right reasons.
Encouraging talented employees to recruit other talented employees is hardly condemnable. Every company wants to have the best talent under its belt, and rightfully so.
Further still, the problem might easily be fixed if the industry set some recruiting standards. That is to say, companies should incentivize recruiting talented and/or knowledgeable workers and punish those who don't recruit based on talent or knowledge.
Offering promotions isn't inherently unethical. Companies are free to "promote" as they see fit. If that promotion just happens to come in the form of a change in job title, so be it.
Promising promotions only becomes problematic when employees are led to believe that the promotions are more than they are. Companies should be upfront about the fact that their promotions aren't accompanied by raises or higher salaries.
MLM companies should also stop telling employees that they'll be CEOs in a year's time. Gamifying a business like that doesn't serve the consumer. It only serves those at the top end of the business.
As it turns out, multi-level marketing in the fitness industry isn't necessarily unethical. At least, it's not unethical in theory.
Unfortunately, however, as it is practiced, it could definitely be a lot more ethical. Customers could mean more to employees. Employees could mean more to employers.
Hey, we can dream, right?
Luckily, there are some sectors of the industry which haven't succumbed to the ills of multi-level marketing. Personal trainers, though they may market to customers, play a whole different ball game.
More importantly, they get customers results because they care. If you're a personal trainer, you know that more than anyone else.
Agree? Disagree? Chime in to give us your take on multi-level marketing in the fitness industry. We'd love to spark a conversation.
Did you find this information useful?
Drat! We would love to hear your feedback.
PT Business Health Check
If you're a personal trainer who's not sure whether their business is working at optimum levels, the Personal Trainer Business Health Check is for you.
Become a Member
Get instant access to the Institute of Personal Trainers free fitness business courses, resources and tools.
If you'd like links to scientific research about fitness, free resources and the odd funny meme to share with you clients, we'll be posting daily on our Facebook page.