MLM Goes Social (Networking)

Have you ever participated in a multi-level marketing pyramid? I personally have not but many of my friends have as MLM has been extremely popular here in Russia in the last decade or so. The industry where it enjoys the most success is cosmetics as women tend to enjoy talking about their beauty and giving advice on what beauty products should be choose to further improve one’s looks.

There are some international players in the game here like Avon or Oriflame but one of the most prominent successes is Faberlic – a local company that manufactures various beauty products based on the space technologies originating from the former Soviet Union after the technologies and scientists behind them were left without any government support in early nineties.

I have two personal friends among participants of the Faberlic network – one of them does pretty well in terms of revenue she generates off the network she built for the company while the other one is not such a financial success as she is mainly subscribed to buy products for herself, her family and friends.

And since I’ve been watching the process quite closely (and even visited their office a few times to buy something for one of the friends as my own office was once in the same building), I can certainly confirm that this marketing method must be a success for the company that has managed to zombie hundreds of thousands of women across Russia and Eastern Europe.

And now the MLM company is pioneering another trend – this time online – social networking for their representatives that will certainly offer them better tools to control representatives efficiently. I have visited the company’s website once and was surprised by how good it both looked and performed (which is quite unusual for Russia as the vast majority of corporate websites of non-internet companies here are far from usable – I can certainly confirm it after spending half of my day today on such sites for a customer of mine). And now they have decided to innovate once again and launched a dedicated social network for their representatives.

The newly-launched social network is built on the existing NetCat CMS enjine and offers the usual web 2.0 features like profiles, friending, private messaging, information on online friends and birthdays of friends.

In addition to these standard features, the social network is obviously integrated with Faberlic’s own resources as it makes it possible to track performance of one’s personal network, build various reports, easily access corporate news and information on various promotions. And of course there is functionality to easily access information from the marketing resources of the company for future use in the sales process.

With hundreds of representatives working for the company across Russia and Europe, the social network will be the largest closed social network here and it will be interesting to see how it will develop in the future. For now my guess is that it will be a success as the representatives are already active enough online building their own promotional sites, blogs, and groups so having a dedicated tool where they could share trade secrets and compare their results with others will only be another benefit (that will probably further boost sales for Faberlic – after all, this is supposed to be their final goal). And MLM seems to be such a natural fit for social networking that it is a surprise we don’t see more projects like this implemented.

Via (in Russian)