Though they sound remarkably similar, distributed marketing and multi-level marketing are completely different concepts.
One is a widely used marketing model, while the other is a controversial business model often compared to a pyramid scheme. Despite their differences, the two have been known to intersect. Let’s take a closer look.
What is Distributed Marketing?
Distributed marketing is a marketing model where a centralized marketing department distributes brand content and tools to a remote network of local marketers. Simply put, it’s a system that provides corporately approved brand communications to local marketing or sales professionals, and allows them to customize content catered to the needs of their local environment.
The distributed marketing model is typically used by large corporate entities or mid-sized business with smaller local branches, dealerships or salespeople in multiple locations. One of the most common examples of a distributed marketing organization is the classic franchise network (think McDonald’s). Other examples of companies that use distributed marketing include Coca-Cola, Estee Lauder and Apple.
The greatest benefit of a distributed marketing platform is that it allows a company to protect their brand. Corporate approved marketing resources are disbursed throughout the network, spanning across digital, social and traditional channels. This uniform message reinforces marketing tactics executed across all local outlets and enables a company to increase revenue, reduce advertising costs and boost efficiency across the marketing supply chain.
A distributed marketing provider can help ensure a company’s success by way of automated marketing programs. Busy franchisees, distributors and local salespeople don’t have time to puzzle out complex marketing programs. Automated marketing programs make it easy for sales teams by doing all the heavy lifting — all they have to do is opt in and supply local customization preferences. By providing local associates with user-friendly tools to produce and launch multi-channel marketing campaigns on demand, companies can boost engagement throughout their network.
What is Multi-Level Marketing?
Multi-level Marketing (MLM) is a business model where products are sold through a network of single party distributors. Representatives are compensated for sales they generate, but they’re also encouraged to recruit others to earn a share of future sales as well. This model creates a downline of distributors and a hierarchy of multiple levels of compensation.
More often than not, representatives are expected to sell products directly to consumers through relationship networking and word of mouth marketing. Examples of well-known multi-level marketing companies include Avon, Amway, and Herbalife.
Multi-level marketing has a bad reputation. Although it’s frequently compared to a pyramid scheme, some prominent organizations are quick to point out that this is a myth and a gross exaggeration. While in some minute aspects this comparison holds weight, multi-level marketing is a working (and legal) business model that one might call it “micro-franchising.”
Where multi-level marketing runs afoul of the general public is in the sales and recruiting tactics that some representatives use. Some of these practices include over-selling the opportunity, pushing product on disinterested consumers, inappropriately discussing business in social situations, attempting to leverage friendships to either sell or recruit and being intentionally deceptive when talking about their business. While these may not be the actions of the majority of reps, it’s happened enough times to damage the reputation of all multi-level marketing companies.
Can They Overlap?
Absolutely! Many multi-level marketing companies operate under and depend on, the distributed marketing model. Corporate offices provide sales catalogs, flyers and other materials to local salespeople — often accessible through a central library (marketing platform). The representative receives professional promotional items without having to spend a fortune on advertising, while the company benefits from having complete control over how the brand is portrayed. The company can even increase its earnings by charging the representatives for the marketing materials as part of their sign up fee or monthly membership dues.
For both distributed marketing and multi-level marketing companies, future success will be dependent upon omni-channel marketing wherein an integrated and seamless experience is created for customers across all devices and platforms. The key to achieving this success will lie in using big data to determine which marketing efforts are spurring sales, and then turn their focus to the channels and campaigns that deliver results.
So there you have it. While distributed marketing and multi-level marketing are separate entities, they can (and do) see a crossover in the business world.
About the Author
Liz Greene is a writer, marketing professional, and full-blown pop culture geek from the beautiful City of Trees, Boise, ID. When not stalking the aisles of her local Ulta, she can be found shoveling down sushi while discussing the merits of the latest Game of Thrones fan theories. You can follow her on Twitter @LizVGreene, or check out her latest post on Three Broke Bunnies.