Have you ever been to a great movie or a great restaurant and told a friend about it? That's called word-of-mouth advertising. Business love word-of-mouth advertising because it's much more effective than all the money they spend on any other form of advertising, promotion, or marketing. Network marketing is a way for business to leverage the power of word-of-mouth advertising.
Let me give you a hypothetical example. Suppose you recommend a great restaurant (Let's call it ROD's Restaurant) to your sister. Your sister and her husband make a reservation for dinner and, during the meal, the waiter asks them how they heard about ROD's Restaurant. They mention your name. How would you feel if the owner of the restaurant sent you a thank you letter and a coupon for a free meal in appreciation for your recommending his restaurant? It would probably make you fell wonderful. The restaurant owner also explains in the letter that because of your recommendation, ROD has gained a new long-term customer. This customer didn’t result from ROD's Yellow Pages ad or it's radio and newspaper campaign. Therefore, the owner wants to reward you for this new word-of-mouth customer. Anytime your sister visits his restaurant in the future, he will send you a check for 10% of the value of the meal as a continuing thank you. Sure enough, every several months you receive a small thank you check. You're so impressed that you encourage others to visit ROD. This generates more free-meal coupons plus more 10% word-of-mouth checks. After a year, you are receiving small checks each month. After several years, you've help to create dozens of monthly customers, which generates hundreds of dollars of extra, no hassle income to you. That would be nice, wouldn’t it?
Excerpt from the book of Robert Allen's Multiple Stream of Income
Multi-Level Marketing (Networking), the Ulimate Money Machine
Money Pipeline
Once upon a time there was a quaint little village. It was a great place to live except for one problem. The village had no water unless it rained. To solve this problem once and for all, the village elders decided to choose and assigned two people to deliver water on a daily basis. They felt that a little competition would keep water prices low and insure a back up supply of water. The two people who are going to work are Sam and Paul.
Sam and Paul are immediately ran out to start their work. Each of them bought two galvanized steel buckets and begun running back and forth along the trail of the lake which was a mile away. They immediately began making money as they labored morning to dusk hauling water from the lake with their two buckets. They would empty them into large concrete holding tank the village had built. Each morning they had to get up before the rest of the village awoke up to make sure there was enough water for the village when it wanted it. It was hard work, but Sam was very happy to be making money.
For Paul even though he is earning a lot of money, he began to feel unhappy and tired. He started to think a way to get out of the rat race. Instead of competing Sam on working from Sunday to Saturday, morning to dusk, sometimes even night, he makes a plan. A plan to make pipe line from the lake going to the village so that the water will flow continuously anytime. Instead of hauling water the whole week, he reserved the two days (sometimes three days) to build his plan, which made Sam very happy since he had no competition on those days. He used some of his earnings to buy materials and used some of his time digging to accomplish his plan. He also invites Sam and some of his friends to help him build the pipeline but Sam were just laugh at him and his plan.
After years of hard works, Paul and his friends who believe on the pipeline finished the plan then later announced in the village that they can supply clean water 24 hours a day, 7 days a week. They also announced that they would charge 75% less than Sam’s service.
In order to compete, Sam immediately lowered his rates by 75%, bought two more buckets, added covers to his buckets and began hauling four buckets each trip. In order to provide better service, he hired his two sons to give him a hand for the night shift and on weekends.
Paul on the other hand, realized that if this village needed water then other villages must need water too. He rewrote his business plan and went off to sell his high speed, high volume, low cost and clean water delivery system to villages throughout the world. He only makes a penny per bucket of water delivered, but he delivers billions of buckets of water everyday. Regardless if he works or not, billions of people consume billions of buckets of water, and all that money pours into his bank account. Paul had developed a pipeline to deliver money to himself as well as water the villages.
Sam and Paul are immediately ran out to start their work. Each of them bought two galvanized steel buckets and begun running back and forth along the trail of the lake which was a mile away. They immediately began making money as they labored morning to dusk hauling water from the lake with their two buckets. They would empty them into large concrete holding tank the village had built. Each morning they had to get up before the rest of the village awoke up to make sure there was enough water for the village when it wanted it. It was hard work, but Sam was very happy to be making money.
For Paul even though he is earning a lot of money, he began to feel unhappy and tired. He started to think a way to get out of the rat race. Instead of competing Sam on working from Sunday to Saturday, morning to dusk, sometimes even night, he makes a plan. A plan to make pipe line from the lake going to the village so that the water will flow continuously anytime. Instead of hauling water the whole week, he reserved the two days (sometimes three days) to build his plan, which made Sam very happy since he had no competition on those days. He used some of his earnings to buy materials and used some of his time digging to accomplish his plan. He also invites Sam and some of his friends to help him build the pipeline but Sam were just laugh at him and his plan.
After years of hard works, Paul and his friends who believe on the pipeline finished the plan then later announced in the village that they can supply clean water 24 hours a day, 7 days a week. They also announced that they would charge 75% less than Sam’s service.
In order to compete, Sam immediately lowered his rates by 75%, bought two more buckets, added covers to his buckets and began hauling four buckets each trip. In order to provide better service, he hired his two sons to give him a hand for the night shift and on weekends.
Paul on the other hand, realized that if this village needed water then other villages must need water too. He rewrote his business plan and went off to sell his high speed, high volume, low cost and clean water delivery system to villages throughout the world. He only makes a penny per bucket of water delivered, but he delivers billions of buckets of water everyday. Regardless if he works or not, billions of people consume billions of buckets of water, and all that money pours into his bank account. Paul had developed a pipeline to deliver money to himself as well as water the villages.
Paul lived happily ever after and Sam worked hard for the rest of his life and had financial problems forever after. The end
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