February 28th, 2008 by The Profit Hustler
Network Marketing and Web 2.0 During Recession
By Hugh Norstrom
Network marketing or mlm traditionally have experienced explosive growth during times of recession and economic downturns. In such times people lost jobs, lost earnings, lost security, LOST HOPE. Where were they to turn? Today with the threat of such an event here again we can expect the same opportunity, even more so now with the rapidly expanding Social network marketing made possible by Web 2.0
Review of History
It was in the late 1950s’ when unemployment was at it’s highest since the Great Depression (at 6.8% in 1958) that networking really began to flourish with the advent of such pioneering companies as Shaklee, Neolife and Amway.
This continued into the early 1960s’ with companies such as Mary Kay, Avon, Tupperware and Fuller Brush all gaining momentum. Then in the late 60s’ when the economy improved and unemployment dropped the growth of the home based business and direct selling slowed.
The 1970s’ were not an exception, however they played out differently. The first half of the ’70s’ saw unemployment rates jump again and the attention to network marketing once again took off. However, with all the heightened attention, five times as many lawsuits were filed from 1970-1974 than all of those filed in the ’50s’ and ’60s’ and the growth was dramatically slowed. The biggest lawsuit, against Amway, challenged the very existence of network marketing and was finally settled in 1979. This legal dispute of course dampened what otherwise would have been a greater boom in network marketing in the second half of the decade.
Again during the 1980s’ we saw the network marketing industry really flourish in the first half while in the second half of the decade it softened. In the first half the unemployment rate had reached its highest level in 40 years at 9.7%, while at the end of the ’80s’ there were almost ½ the number out of work.
In the 1990s’ the trend continued. In the early 1990s’ (1990- 1994) huge momentum in the industry, in fact “there was more wealth created in by way of MLM from 1990 to 1994 than any other time in history.” (Network Marketing Lifestyles May 2000). From 1996-1999, we had a network marketing recession. Again in direct correlation to unemployment. In the early 1990’s, the unemployment rate was very high and then in the later years in the 1990s’ it hit a 30 year low of 4.2%.
Where are we headed in 2008?
All major indicators suggest a possible recession: stock market, credit card debt, mortgage fore-closures, fall of the dollar against foreign currencies, company earnings reports across all sectors, manufacturing sector, employment figures, etc.
How do we take advantage of this opportunity?
Do we market products? This does not solve the average persons’ perceived need/want. Health and many other items can not be a major priority in this time. During times of recession peoples’ attention turns to a “just trying to get by” mentality. What we should be doing is making a shift to support people in building residual streams of income to empower them to withstand any kind of economic downturn. “Recession causes people to open their minds to gaining alternative sources of income” Lou Clements, Marketwave Inc.
Are the networking and prospecting methods you are currently using the best, most attractive, most professional and most effective way to bring people in to your business? BusinessWeek recently ran an article titled “Social Media Will Change Your Business… Look past the yakkers, hobbyists, and political mobs. Your customers and rivals are figuring blogs out. Our advice: Catch up…or catch you later”!.
Social Networking is comprised of a number of methods that can work synergistically together.
Social Networking sites like Facebook, MySpace
Social Bookmarking sites like Digg.com and SocialMarker.com
Content sharing like Squidoo and HubPages
Video, Photo and Music Sharing Sites like YouTube, MetaCalfe, Flickr
The sudden and fast rise of Social Networking is having a very significant impact on how we can maximize the potential ahead of us. Social networking is rapidly expanding, 33% of Internet users visit MySpace or have a page there, 29% either are on or go to FaceBook, 35% use YouTube. There are lots of Social Networking sites in cyber land with the number of users doubling every month. The top keyword searches bring up a social site. Social buyers make 20% more and also spend 25% more of their income. Some feel that over the next 2 years this is where the action is going to be and if we are going to take advantage of these trends now is the time to do it and this is the way to do it. Indeed because so many of the resources in Web 2.0 also known as Social Media are free or low cost net workers can now attract people to them much more cost effectively than before. Rather than investing hundreds of dollars in advertizing or buy leads now for free or just a few dollars per month one can reach hundreds of fellow human beings.
Use this as an answer to recession and economic down turns.. We must learn how to promote the business opportunity, do it well and do it effectively. If we are not utilizing Social networking we are missing the boat.
Hugh is an network marketer, entrepreneur and a coach focusing on teaching attraction marketing. Learn more about attraction marketing http://attractionmarketersuniversity.com
Article Source:
http://EzineArticles.com/?expert=Hugh_Norstrom http://EzineArticles.com/?Network-Marketing-and-Web-2.0-During-Recession&id=963626
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