Monday, August 20, 2012

Zeek Rewards: Everyone is Guilty!

Zeek Rewards: Everyone is Guilty!

Unless you've been living under a rock... you have heard about the Zeek Rewards, MLM Ponzi Scheme... Last week, the company was shut down, with millions of members (investors), $600 million turned over to a receivership, and a flood of people realizing that they were a victim of an MLM Ponzi Scheme!
First, they knew exactly what they were doing and are not contesting the action.
Second, it is estimate that if a one page summary is sent to each investor, summarizing the contributions and withdrawals, the stack would reach about 100 meters(about 300 feet).
Third, it brought new attacks on the MLM Industry, due to their model, which was clearly an MLM Ponzi Scheme!
Fourth, they aren't the only ones out there.  Some will mask an auction or dating site to their business model.  
Pick ONE... 
  • a.) are you marketing real products and services, to real people, for a commission on sales? 
  • b.) are you marketing recruiting package for commissions?  
  • c.) are you marketing an investment program?  
Hint... a.) is the only one you should have chosen.  Don't even waste your time, and please don't share with others, b.) or c.)!  Even with a.), you need to research the company, the products, and have a desire to actually market the company's products and services.
Most of those familiar with it Zeek Rewards, knew that it was wrong from the start, however has led others to believe it was legit, and launch another.  Additionally, many knew full well it was not legit, but joined anyway and handed over thousands to the "Lure of easy money."
Just one week ago, I spoke with a company from California, that is also proposing to launch a Penny Auction MLM, etc. etc. with rewards points that can be earned, etc. etc. and compared to existing companies,  I stated that "Most companies are outside the USA, as this can quickly be an illegal scheme."  He responded... there's some here in the USA, mentioning Zeek Rewards.  Yes, they do exist in the USA, but only serve to make you think it is legit.  It is NOT.  While I offered to provide consulting, to discuss further, I have no knowledge of his status.
1.) You need an MLM Consultant
2.) You need All Docs and Business Model Details sent to an MLM Attorney
Last week, two business associates called me to inquire on Zeek Rewards, specifically, with a desire to join.  I told them NO, in my opinion, it was  Ponzi Scheme and would be out of business soon.  I had no idea it would happen in only a few days from stating it!  I do hope they didn't send their money and app in... I hear the investigators are still receiving packages from new enrollees!
No doubt, Zeek Rewards was told, very clearly, what was right and wrong.  They state having an MLM Attorney, which was probably hired or consulted with, briefly, when they first launched.  Their stated MLM Attorney is reputable, and there is no reason to believe this model was acceptable by their firm.  It is not possible to believe that any MLM Attorney would confirm the business model to be safe.  Absolutely ridiculous.  They simply did what they wanted, in the face of good advice.
Regularly, I speak with potential start ups who present a wild and profitable business model, for which I explain is not legitimate and they should not do.  Zeek Rewards, in particular is closer to the High Yield Investment Club scams of the 90's, but repackaged with an auction site to conceal it's identity.
Based on the fast pace of people joining and sending thousands (in many cases over $5k each), and the fever of looking at a back office and it's reported incredible yield, it ran like wild fire.
Worse, I've received dozens of requests to launch a similar program mixed with auction or penny auction or reverse auction,... even dating site, and pointing out existing companies doing somewhat similar... like Zeek.
Often these companies are off shore, allowing them to run longer before a regulatory agency shuts them down.  At times, they actually do so from within the US, leading others to believe they must be legitimate, and want to launch their own.
Folks... Real Products to Real People.  Not Investment an MLM Ponzi Schemes.  
If you become a member of an MLM Ponzi Scheme, you are only assisting in the continuation of such.  Don't do it.  Worse, you are just as Guilty of encouraging others to be taken by a Ponzi Scheme.
And listen, when a company is shut down, many move to the mentality, "I am a Victim."
Stop it.  Do you know how many people I spoke with in the last couple months that mentioned Zeek Rewards, that they were a member, and they KNEW it was a Ponzi Scheme, they just hoped to make some money.  I'm serious!  And if you are honest, you probably knew it to.
Not everyone that falls for such a scheme is a Victim.  They should be brought in front of the judge, with the CEO.
If it is an MLM Ponzi Scheme, don't do it, just because you think you can make some money before it crashes.  In the end, you only fuel others to believe that it is legitimate.  In my book you are just as guilty.
You knew it and promoted it!
If you are a company, don't do it.  I have turned down, on average, 60-100 potential clients per month, on this one point.  If you are interested in marketing real products or real services to real people, then I am willing to work with you and willing to discuss software solutions.  If you are not... I must turn you down.  That's correct, I turn down 60-100 people per month, no matter how much money they are willing to spend on software.
It is time the industry gets cleaned up.
Next, already people are positioning to drag "Victims" of Zeek Rewards into another MLM.
New Start Up companies are thinking of the millions of people that are now candidates for MLM.
NO.  They are not.  Even if you happen to have contact with persons, and have the right to communicate with them.... Persons who willfully join a company, such as Zeek Rewards, will never do any work in a real MLM.  These persons are not interested in marketing Real Products to Real People.
If you are even thinking about this group of persons as your target market, you are wasting your time.  They are only interested in blindly tossing money in an imaginary machine and receiving more money back.  These persons approach real product based companies with the same mentality, if the comp plan is designed to attract them.  Comp plans often do attract them, they purchase a distributor kit, then do nothing.  
There is no reason in the world, for you, to design a compensation plan to attract the masses, recruiters, or the like.  Your compensation plan should strictly be designed to reward persons for marketing real products to real people, directly, and through a sales team.  If it has crazy rewards, bonuses, or other methods, to entice the masses, you will not reach company sales goals.  If you are a legitimate company, it is all about product/service sales, not about recruiting.
Again, the industry needs to be cleaned up.  It starts with me, an Industry Consultant and Software Provider, with MLM Attorneys, with MLM Start Ups, and with Distributors.  We ALL must work together, with correct expectations, towards success.

Scott H Leonard
MLM / Direct Selling Conultant
MLM / Direct Selling Software Provider

Thursday, August 16, 2012

Mass Email Dangers for MLM Companies

Mass Email = Maximum Risk for MLM Companies

For years, I have warned of MLM Software systems which permit mass email or subscriber autoresponders within the MLM Software System. In come cases, the requests are or the distributors or "Leaders" to have these features. I can not express how wrong this is, nor how much liability you place on your company.
First, can you prove the email recipient requested to receive your communication, ON THIS SUBJECT? While companies don't like it, confirm subscription via a received email is a must. That said, it should be a confirmed subscription to a specific communication subject. Just because a visitor subscribed, does not mean he has agreed to receive all company solicitations, only the particular one he subscribed to. All else is SPAM and brings great risk on the company.
Second, auto responders which fire the moment a registration occurs, without the confirmation link to confirm opt in IS SPAM.
Third, any mass email tool in the hand of Distributors or "Leaders" WILL BE WRONGLY USED. And it will be wrongly used from the company's .com and IP range. I keep repeating, "Desperate People do Desperate Things" and you need to know that most Distributors are Desperate, or are two steps away from being Desperate. Give them the ability to upload a contact list and send emails and guess what... Your Company, Your .com, Your IP range is firing NON Opt-In email solicitations to whomever! SPAM. Not to mention the content... Distributors will promise a bottle of vitamins can cure cancer or a business opportunity can pay $15million per month... join now.
Communications should always be managed from the company, and even then, great care must be maintained in the handling, confirmation of opt-ins, newsletter content, and handling of op-outs.
Recently, I had a conversation with a company, which I encouraged that they speak with an attorney. Later that day, I wrote an email to this person, regarding our conversation and included contact info for an appropriate attorney which I had suggested. I cc'd the attorney and included a paragraph in my email, directly to the attorney, as a means of introduction.
Both the company and the attorney received the email and the introduction was made. An hour later, I received an email from the attorney, who stated "In conformance with the CAN SPAM laws, I appreciate the referral, and direct introduction, however, I will not contact this person directly, but will wait patiently to see if she contacts me."
It's been a long time since I have seen an attorney with such integrity. You may not understand it, but rather than accept the direct introduction, within the email, referenced phone introduction, CC to both company and attorney, direct comments to attorney within same email.... with all that.... CAN SPAM laws basically provide that he had not been contacted by the company and he could not communicate to them. He must wait for response.
You may say, "what is the world coming to?", I say "hoo rah" for those abiding by the restrictions and maintaining a higher standard.
Now, for your MLM Company, you should also know that a Distributor Registration does not indicate Email Newsletter Subscription, nor to what subscription subject matter. It is very important that companies look at their subscription process and forms, then contact an attorney to discuss how to include such during the registration process. Of course, a receipt is one thing, but newsletter and company email can instantly become spam.
Scott H Leonard

How To Negotiate your MLM Software

How To Negotiate Direct Selling and MLM Software

  1. First, you share your business model.  What products or services will you be selling and how do you intend to sell and market these products or services.
  2. Second, you share any integration that may be needed to support the sale of these products or services.  In some cases, it may be real time integration with a warehouse management system.  In other cases, it may be an API integration between third party site that conducts a transaction.  It could be a monthly CSV file from third party, provided to you for upload and post.
  3. Third, you share specific expectations and functions that you want in the Distribturo Back Office and in the Amin Back Office.
  4. Fourth, you share the specific MLM Compensation Plan, Bonuses, Ranks and Rank Advancement that you would like to use.  At this point, it is good if your MLM Software Provider is also an MLM Consultant or MLM Expert.  If so, it is best if you are willing to be educated and allow them to comment on the Compensation Plan.  Many people propose MLM Compensation Plans that are not capable of making money.  They over pay distributors or pay almost nothing to the distributors, making them angry.
  5. Fifth, your MLM Software Provider should provide a contract or license agreement.  Take time to review and schedule a call to ask questions about any part.  An MLM Software Provider will provide Managed/Hosted solutions for a fee.  These fees are necessary to manage the expansion of your business, updates and customer service needed along the way.  When acceptable, sign and return.
  6. Sixth, your MLM Software Provider should provide a detailed Compensation Plan Specification or System Specification Document.  It is mostly meant to spell out the details of your compensation plan as they relate to the system.  This wording is very important.  Take time to review and schedule a call to ask questions about any part.  When acceptable, sign and return.
  7. Seventh, you share site design requests with their designers.  A design document may be provided and require approval, sign and return.  Stay in communication with the MLM Software Provider during the development process, responding as quickly as possible.
  8. Eighth, when the site goes live, begin placing basic content items, such as About Us, FAQ, Founders, etc.  Also make sure you prepare and provide the Policies and Procedures, Terms and Conditions, Privacy and other policies.
  9. Ninth, contact your Merchant Provider to make application for a merchant account.
  10. Tenth, locate and purchase an SSL for your site.
  11. Eleventh, when MLM Software Provider is complete, be quick about scheduling training on use of the system.