Building a business in network marketing, with the right company, and the right product, has little downside to it except for one — it is vulnerable to a business builder in the network moving to another company. To complicate the issue further and make things worse, they may even try to take part of the network with them. The purpose of this article is to analyze this process and then provide ethical guidelines for this type of situation.

The Tactic:

Here is one recent tactic used by one up start network marketing company. As a note, although it should be obvious, this company is not a member of the DSA.

  1. The consultant decides to leave company “A” and move to company “B”.
  2. The consultant contacts via phone and/or email each of the clients and consultants in their downline in company “A”.
  3. The consultant informs each client and consultant in company “A” that if they need anything regarding product, etc. from company “A” they should contact the consultant’s immediate Upline consultant in company “A”.
  4. The consultant explains this is necessary because they will no longer be servicing them.
  5. This last comment raises the curiosity of the consultant/client who naturally asks “Why?”.
  6. The consultant then explains they are no longer with company “A” but they are now with company “B”.

Twisted Customer Service:

At first glance this may appear to be good customer service. But in reality it is actually extremely unethical. Here’s why.

This type of communication is what I call “Twisted Customer Service”. The consultant is not really calling the customer to give customer service. She calls the customer, and while pretending to offer customer service actually has an ulterior motive which is to inform the customer she is no longer with company “A” but is now with company “B”. She “twist” the customer service in a completely different direction.

In some cases the communication is not nearly this subtle. I have seen consultants in one company send out emails, not just to their downline, or those they knew before they started working with company “A”, but to every single email they have collected while in company “A”. This includes downline, sideline and upline consultants and clients. And, like the example above, the email had all their contact information, and all the information about the new company.

Imagine that. It would be no different than if a consultant, rather than send an email, called every one and told them the following:

“I am no longer with company “A”. I am now with company “B”. Here is what company “B” is about and by the way if you need anything here is my contact information.”

Unethical? You bet it is. So how do they justify this?

Business and Relationship:

Some see no issue with the above practice because they believe anyone they had a relationship with prior to joining company “A” is fair game and there is nothing unethical about recruiting them into the new company. They believe the relationship they have with each person takes precedence over the business aspect of the relationship.

The problem with this line of thought is it does not take into account everything that contributed to building the existing network. It may be true, that the network was built with persons the consultant had a relationship with, whether friends or family, prior to learning of company “A”. However, the network was also built based on the reputation of company "A", company "A's" products, along with any training and assistance that was given by this consultant’s sponsor and upline team in company "A".

Thus the prior relationship is only one of several factors that led them to become a part of the network in company “A”. Likewise it would be only one of several factors that would contribute to their choice to join company “B”. So it is no longer possible to extract the other aspects of the relationships. Thus it is not possible for the consultant to communicate with anyone in company “A’s” network, about matters of business, whether they are family or friends, in any capacity other than a representative of company “A”.

That’s because the moment a consultant makes the decision to leave company “A”, and move to company “B”, they stand outside company “A”. Any contact with any client or consultant in company “A”, for any purpose whatsoever means she is actually acting as an agent of company “B”. To use the resources of company “A”, for the purposes of company “B” is a violation of the DSA code of ethics. It is unethical.

For some this will not make sense. After all, they will argue that “I have a relationship with many of those in company “A’s” database”. So they justify contacting them about leaving company “A” and/or joining company “B”. But what they miss is this; it is not the relationship between a consultant and those in the network they talk to that determines the nature of the conversation. Rather, it is the content of the conversation that determines the conversation.

Since the consultant is no longer with company “A” any conversation regarding anything to do with the company “A” or company “B”, by definition makes it a business conversation, not a relational conversation. In light of this, since the consultant has already decided to leave company “A”, any of communication that is business related, is unethical.

The above “mix of relationships” in network marketing is why most companies I know of have some form of policy against cross sponsoring. There are two main reasons for this.

  1. It is unethical to use the resources of one company, in this case a database of people, to benefit another company.

  2. Moving an entire network of people has a negative impact on the income of those in the upline.

The Proper Ethical Response:

So what would be the proper ethical way to handle this type of situation where a consultant moves from company “A” to company “B”? Simple, the Consultant should call their Upline Consultant in company “A”, inform them they have decided to move to company “B” and have their upline consultant in company “A” service their clients.

It’s that simple. This not only provides the client with customer service but does so without introducing company “B” to them. This is ethical and is in accordance with the DSA (Direct Selling Association).

Rob Peter to Pay Paul:

It should also be understood that every client or consultant who is convinced to move from company “A” to company “B” has a negative impact on the income of the upline in company “A”. This is another compelling reason for a consultant who moves to another company to cease all communications with those in the previous company’s database. Their goal should be to reduce as much as possible any impact on their upline’s income. Sending out a notification similar to those mentioned above has the exact opposite effect.

But let’s be honest, this is exactly why they do it. It has nothing whatsoever to do with customer service. It has everything to do with “them”. It’s all about what will benefit them and their income. But this fails to take into account this fact: while cross sponsoring people from company “A” to company “B” to increase their income, there is also a corresponding direct negative impact on their upline’s income in company “A”. And with each act of cross sponsoring, the consultant increases their unethical load in the network.

Notify the Parent Company of the Decision to Leave:

There is one more issue, related to moving to another company that needs to be addressed. Once a consultant makes the decision to move to company “A”, their very first act should be a call to the headquarters of company “A” to inform them that they are now with company “B”, so all compensation checks from company “A” should cease immediately. Every check a consultant takes from company “A” after they have made the decision to become a consultant with company “B”, is an unethical act. These funds are taken under false pretenses and any funds that are taken under false pretenses are a form of stealing if not our right fraud.

Treacherous Business Partner:

It's possible a consultant could be ignorant of these ethical issues. Or it could that they are fully aware of the issues but chose to act unethically anyway. Either way it does not really matter because neither type of person will make for a successful business relationship. Why would you want to be in business with someone who can justify such obvious unethical behavior? Not to mention be associated with a company that allowed this type of unethical behavior in their organization.

So the moment someone engages in this type of behavior is the moment you need to eliminate them for any type of business relationship. But not only this person, you should also steer clear of the company that allows such behavior as well.

After all, if they can rationalize this type of behavior, when it is to their advantage, what other unethical behavior would they participate in when it is to their advantage? If they have no problem taking clients and consultants from company “A” to company “B”, they will likewise have no problem taking people from company “B” to the next company that comes along. This is no way to build a stable business, a stable income and consequently it is no way to build a true plan "B" into a plan "A".

© 2011, VoiceWind. . .Greg Loveless. All rights reserved.

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