Entrepreneurs: Learn from Amway’s success in network marketing

Regardless of how you feel about MLM or network marketing, Amway’s success cannot be denied. Behind the more than 3 million distributors selling more than $7 billion worth of products in more than 70 countries stands an effective management system that helps and gets the most out of an organization of disparate people, none of whom operate from a company office. Every entrepreneur can benefit from understanding how Amway recruits, trains, and motivates its Independent Distributors.

Even with an estimated annual turnover of over 40%, Amway “manages” to keep growing. And now the current trend of outsourcing jobs and downsizing companies plays squarely into their hands.

Any entrepreneur or businessperson can learn from Amway and improve the performance of their business by adapting the same techniques.

Studying Michael G. Pratt’s scholarly article, “The Good, the Bad, and the Ambivalent: Managing Identification Among Amway Distributors” in the September 2000 issue of “Administrative Science Quarterly” provides some interesting information.

Amway has focused on everyone’s need for identity; theirs, how they relate to their associates and to the business or company with which they are linked.

Having come to understand the importance of this topic, Amway figured out how to capitalize on the negative feelings people have about their identity and, through dream building and positive action by upline distributors, motivate them to become into successful Amway distributors.

Recruits to the Amway program are carefully screened to determine where they fall on the dissatisfaction scale and why. Once determined, negative statements designed to increase dissatisfaction (“sense breaking”) are repeatedly presented to the individual by attacking the sense of why the individual should remain in that bad situation.

The moment the person is ready to leave the unpleasant situation(s), Amway gives the person a new meaning for their life (“Sensemaking”) until finally the person takes action (” Sensemaking”) as he or she sees. the feeling of joining Amway.

Once aboard the Amway bandwagon, downline people are constantly evaluated by successful upline people who are extraordinarily adept at determining where they are in these three emotional states. If someone starts to become ambivalent, “help” is quickly given to any condition that needs attention or reinforcement.

How does this help you in your business?

First, understand that many people are, for a variety of reasons, experiencing identity crises; maybe you were too and that’s what motivated you to start your own business. Work worries, family and financial problems, and worries about retirement all contribute. Second, consider that anyone in such a frame of mind will not be very productive. Also keep in mind that they will eventually solve your problem. And know that as their employer, you may be the victim of their attempt to take action, or as their helper, you may be the beneficiary.

Third, recognize that you, as their employer, are in a position to help them kill the identity beast (or make it worse) by the way you treat them. Lastly, you can and should always look for ways to help them improve their identity, their self-esteem, their business, and perhaps their personal relationships.

How do you help? Practice what Amway does. Improve your people skills so you can tune in to how and when people are changing. We all do it, some more often than others. But you need to be able to see who is changing around you and how, with respect to Sensebreaker and Sensemaking, so you can provide more sense. If the meaning of someone’s life is unclear, if he or she can’t find a way to focus on what’s important, then that person certainly can’t take action. They can no longer help themselves achieve their dreams or help them achieve their goals. But what’s worse, they’re susceptible to a smooth-talking Amway recruiter or their competitor who’s more in tune with the people.

With more telecommuting and reliance on the Internet, especially in technical fields like engineering and science, more people are spending less time in offices or settings where meaningful appreciation and heartfelt “atta-boys” are expressed. In these times and situations, it is easy for people to develop identity problems. If you can’t see your organization and talk to them often and in depth, you may end up losing good people to better employers.

If Amway can get millions in sales per distributor, you should be able to get how much? Half as much? Would you settle for twenty-five? Just remember that Amway owners in Canada are smiling at how little respect most of us give MLMers.