MLM HISTORY – The MLM Telephone Wars

Urgent calls have started hitting several times a week, “Who has the best phone deal?” Some of our readers want the best prices, some want an “insurance” program to back up their current MLM program, and some just want to make enough money to pay their MLM phone bill! It is a hot subject in the Network Marketing industry this year!

Since the Federal Government deregulated long distance telephone services, there have been great effects! As long distance rates drop, the market grows by billions of dollars.

Telephone Wars Chart

Few people realize that Network Marketing was and is at the forefront of long distance telephone growth. Sprint actually penetrated the home market through Network 2000, a Network Marketing company. Remember their selling silver cards in 1989?

The program was successful. Though Sprint executives deny it, Network 2000 built Sprint. The day came when Sprint corporate marketers got jealous and took their axes to Network 2000. What resulted was the largest class action suit in the history of Network Marketing-$198 million dollars. Networkers who were in Network 2000 still collect checks from Sprint. AMWAY and MCI don’t release exact figures, but industry estimates are that 48% of new customers that MCI gets are through AMWAY. If you consider that each of AMWAY’s distributors signs up with MCI, that is 1.5 million customers alone!

The telephone industry is competitive. The average consumer does not know what he/she pays per minute in telephone time. The personal touch of a Networker is needed to divide minutes into cost and show consumers they are getting the shaft. TV advertising by the big three is designed to confuse. All companies use fiber optic lines; no real difference in quality exists today.

The current deregulation should affect Networkers for the better. The deregulation will affect local exchanges. Some long distance companies are planning to compete with local telephone companies. Ask about that edge when shopping a NetWork Marketing telephone company.

In the last issue we wrote about the failure of MLM phone companies. We said the major discriminator is money. Big money is needed to buy long distance time at a discount so that a MLM company can be competitive and payout commissions.

The July 1995 issue of MONEY MAGAZINE directly influenced this article. It featured an excellent article on “Long Distance – How to Choose the Company That’s Right for You”. We used the same format for this article. A major long term money maker for Networkers is one plus dialing. We used this as the primary indicator for rank order, the same basis as Money Magazine. If 1-¬¨plus was not offered by the MLM company, we used the price of their Debit cards.

Do your due diligence before joining a program! A particular quirk- some companies have high training fees. This has put some MLM companies on Attorney General’s hit list (head hunting if commissions get paid on recruiting/training). Some may not be competitive in terms of price. We modeled the compensation plans based on our above average new Networker, Larry Lunchbucket. Larry did well by signing up five people and five customers, each one with a $100 a month long distance. That let us shift through the fog some companies put in their compensation plans. If enough of you want, we can do more research and rankings.

These are not all of the MLM phone companies, but are a good sample of what is on the market at this time. Because of the increasing urgency of requests, we pulled information from our files that may not be perfectly up to date.

This article is from the MLM Insider Magazine, June/July 1995 Issue.
4 years ago


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