I went undercover and attended an MLM (Multilevel Marketing) talk as an unsuspecting guest to find out what really happens there to expose some of the tactics and tricks they use.
Have you ever received invitations to talks or seminars that promise to teach you skills to earn big money? Or have you seen an advertisement on Facebook for a training course that will allow you to earn a five figure monthly income after you complete it? Whatever fancy words are thrown around, chances are, it’s probably an MLM scheme. If you think you won’t fall for it, think again! The event managed to pull a mixed crowd at the talk, cutting across the major races and religions in Malaysia.
Learn what I found out at the MLM talk recently to get a better understanding of how it works so you don’t fall for MLM scams in the future.
The “Yes” Technique
It began with a question,
“Who’s happy with their life right now? Raise your hand”
That was the first thing the speaker, *Adam (not his real name) asked once we were all seated. Not many hands were raised, indicating most of the people in the audience were unhappy with their life. Adam then tells everyone that he will share how we can change our life for the better.
“I have over 30 years of experience, and I now live my life on the beach”
One of the main attractions of most MLM schemes is the claim that you can work from home (or even by the beach) at hours that suit you. It sounds great, but also too good to be true. They paint a picture of how your life can be great IF you join their program or business. So the first thing Adam did was to make us agree with him that our current lifestyle is bad and that we can indeed be living a greater life. We should be able to travel, live and work from a beach or work according to our own hours
Take note that Adam started by getting us to agree to something small, which is basically that our life is awful. This is the “Yes” technique. A speaker begins the conversation with questions to generate a “yes” response. It’s usually something relatable, such as:
“Who is happy with the life they are leading?
“What have we learned to get in school?” Good grades
“What should we find after graduation?” A good job
“So we can earn money to buy a?” House!
“And we get promoted in order to save more for?” Retirement?
“And we work for a boss that’s stupid, right?” Yes!
The point is that once the attendants have agreed, it will be easier to get them to agree to something bigger, which is to part with their money later on. But the “selling” part happens much later after Adam has most of the attendants clapping and agreeing with almost everything he is saying.
“Amazing” Testimonials Trick
Moving on, Adam then tells us about the “top tiered affiliate marketing system” that will teach you how to generate at least USD 10,000 dollars or more! Then he presents a real person under the training program who is making a “fortune”,
“This is Tiffany. Everybody say hi to Tiffany. Tiffany has been with us for over a year.”
Adam then asks how much income Tiffany has made over a year after following the training program. Guess what, she’s already made 5 figures, and her goal this year is to make her first 6 figures and Tiffany says she’s already on her way.
“I’m living proof that this system works. As and when I want to work, I work. I travel wherever I want. Take the opportunity”.
Who’s to say these “real” people are indeed real and are not paid to say those claims? In such situations, don’t fall for the testimonial trick, no matter how convincing the person giving it sounds. We were also showed video testimonials of people praising the training program. Don’t fall for it, a video testimonial can easily be bought on Fiverr for as little as $5.
Another red flag raised during the talk happened when we were shown slideshows with pictures of happy people holding up mock checks. Apparently, these people raked up huge amounts of money by joining their program. BUT the amount Adam claimed was received by those people and the amount displayed on the mock checks in the pictures was different! These are little things to keep a look out for.
Adam shares that this training is usually done overseas. But they’re now bringing the training “right here to you in KL!”. Aside from that, he goes on to say that the company is international, “you can find us in various countries, we’re in Australia, Canada and more”.
By mentioning their presence in other countries, they’re trying to make you think they’re an international operation, and therefore, that should be safe. Remember, just because a company has international offices does not make it any more legitimate, or even legal. Do a background check of the company with local authorities, such as Bank Negara or Securities Commission Malaysia, first.
Tiered Level System
Another clear warning sign was when Adam started telling us about the “diamond mastermind” level. Apparently, this is one of the levels you can reach, and once you do, you get to attend training and “party” with the other “success teams” at exotic locations such as Bali, Costa Rica, Barbados, Jamaica and more.
MLM typically works with a pyramid-based structure, where you have to work your way up to the different levels. If you hear about levels and how the higher you go means you’ll earn bigger bucks and get more (such as the free trips), it’s a red flag.
The Anchoring Tactic
“So are you all ready to be living a better life?”
Adam asks enthusiastically. He explains a 3-day training which will be held at a 5-star hotel “for you” for USD 997. But, if you pay for the training during the session, you get a special family and friend’s price. Now it’s half the price, making it USD 497, AND you get to bring along a friend for FREE. You’ll also get access to a “personal coach” for life.
Adam then asks, “Is living the current lifestyle making you happy? This is a small investment.” This is the anchoring technique to get you to fork out your money, by getting you to agree that it’s a small investment for a happier life. Anchoring is used to stimulate a response in other people to something that has been done or said. Once the anchor is established, the person would be able to evoke a positive emotional response in another person, which was what Adam did by anchoring the attendants by getting them to agree that they are not happy with their current life.
The Scarcity Tactic
He then says, “This is a limited time offer, and we know this will be sold out soon, so raise your hands right now to get your spot for the training.” Think about it, if the training will indeed be sold out, why do they have to keep on pushing for sales? Don’t fall for words like “limited time offer” or “one time offer”. Adam also tells everyone, “Make sure you get your spot right now while you can.” Creating scarcity and urgency is another trick often used by MLM and scams. They tell you there’s an expiry time for the offer to create pressure and a sense of urgency. Don’t fall for it, don’t rush into things. We were also told that no recording of any kind is allowed due to the ‘intellectual property’ and secret nature of the slides they are showing us. Guess what, there was no secret or anything new on the slides.
Businesses use scarcity to make opportunities appear more appealing to you by claiming there is limited availability. This is a technique of persuasion that is frequently used and which you are most likely to be exposed to. So remember this tactic and take it into account when you are making a decision on any purchase.
Peer Pressure Trick
This was the last segment of the MLM talk. By now, you would have already discovered the whole purpose of the talk was simply to secure sign-ups for the “3-day training program”. During this segment, those who have signed up for the training were applauded for taking the decision. Their names were mentioned out loud and everyone was asked to “cheer, clap and congratulate them”.
This is done on purpose to create peer pressure among the attendants who have yet to sign up, which may cause them to think, “I want to be a part of that too!”. We all know how Malaysians tend to have the kiasu attitude. But this is when it will work against you. Don’t be kiasu and don’t fall for the pressure if you ever find yourself in such situations.
Once you sign up, you have actually proven to them that you are willing to spend your money on them and you will actually pay them to get further indoctrination in the follow-up workshops that will ask you to invest much higher amounts.
In the end, you will end up spending a few thousand ringgit to buy a license that allows you to sell licenses to other people. Affiliate programs should be paying you, if you have to pay the affiliate program, it’s a scam.
There you have it, folks. Everything I shared above is as I experienced it, making them very real tactics which scarily, many Malaysians are falling for. Take note of the pointers so you can spot an MLM scam and avoid becoming a victim to it.