Sunday, 5 August 2012

Turning a pyramid upside down: How one of the world's most controversial business models could be subverted and made to work for its members

Pyramid selling is now illegal in the US and other countries, but its
descendant multilevel marketing is a growth industry.
(Image: Janusz Recław via Wikimedia Commons)
I wrote this post a few days ago and have been thinking about some of the implications of what it contains. I'm posting it here anyway as it's a step in the ongoing evolution of an idea: a branded high-profile online network of professional EFL teachers who collaborate and support the group on a not-for-profit basis. Some of the ideas expressed here will be modified along the way - or dropped - but I think the basic idea is a good one.

Anyway, here it is...

Hey Jude, don't make it bad.
Take a sad song and make it better.
Hey Jude, The Beatles

I recently had a run-in with a member of one of the online groups that I manage. The person in question was trying to use the group to recruit people to a multilevel marketing scheme which claimed to offer – as these schemes always do – a secure income and the opportunity to work from home.

I did a bit of online research about multilevel marketing and their more sinister predecessors, pyramid selling schemes, and found that there is a huge online debate about whether or not you can actually make money from them. I don’t want to discuss the merits or demerits of multilevel marketing (MLM) in detail here, but one thing that did occur to me is that if you strip out the aggressive recruiting and pyramid structure the basic idea is quite good. (Yes, I know the whole argument is about the recruiting and whether that is actually the business, rather than the products or services promoters are supposed to be selling.)

Most of these companies offer a ready-made “business in a box”: a well-known brand, a complete product range, marketing tools to promote your business (such as a website), training (lots of training!), inspiring talks and a whole slew of branded freebies, badges (buttons) and publicity material. The main problem with MLM is that the hapless new recruit has generally to pay increasingly large sums of money to access all these benefits – and usually they have to purchase a substantial stock of products which they will often have difficulty selling. (Many of these will remain unsold, be given away or end up on eBay, for example.)

Now, if you just think about the idea of having your “business in a box” – but without the huge costs demanded by the MLM company (or generally the person who recruits you as part of their “downline”) – that’s quite a cool idea: everything you need to make money – all you have to do is go out and sell and not worry about setting up a website, building a brand, developing a large network of customers, etc: it’s all been done for you.

Wouldn’t it be good if you could access all of these benefits – but WITHOUT PAYING THROUGH THE NOSE?

You would be able to focus on what you do well and enjoy the advantages of having a large organisation behind you, providing you with whatever help and support you need – but for free.
Let’s put this in the context of freelance English teaching: the vast majority of people who teach English professionally are highly motivated and enjoy providing their customers – students – with a great service. An increasing number of English teachers have professional qualifications and there are now a huge number of resources they can access (material, exercises, etc) and use in their classes. Many entrepreneurial and social media-savvy teachers have set up their own websites and blogs, which they combine with word-of-mouth recommendations to find students. But what they don’t generally have is the kind of marketing clout that a large school or online training company has. They can’t spend a fortune on developing a really cool website or easily set up complicated e-commerce payment systems that will allow them to sell material and courses online. Yes, some people are doing this – but they are the exceptions.

What if these teachers could plug all their material and expertise into a ready-made “business in a box” (such as those offered by MLM companies, but without the eye-watering costs) and then use this to promote their business?

Of course, there are a number of companies that already offer this, such as WizIQ. However, while the platforms themselves are generally good, they don’t really seem to provide the kind of pro-active marketing and sales oomph associated with MLM companies.

I know MLM is not a great analogy – and I have been careful to try and isolate just the “good” bits from the rest – but the concept it encapsulates is a powerful one: that each promoter or distributor is a mini-business. This is the element that is lacking in the approach taken by most freelance teachers: they’re really nice people for the most part and they care about what they do. But they aren’t in a position to earn a lot of money because of the way the freelance English teaching industry is structured (or not structured – which is at the root of the problem).

Online, the English teaching market is dominated by a small group of large players with substantial resources; then there’s a layer of largeish schools and companies with professional management teams, as well as dedicated marketing and publicity; under that an archipelago of small schools and language consultancies (often just a few people) and finally you reach the primordial soup level of individual teachers working as freelancers, maybe while also teaching for a school or holding done another job. In terms of numbers, these “plankton professionals” vastly outnumber all the other players higher up the food chain; but – just as in the natural world – they are constantly competing for survival and usually at the expense of each other. While some teachers belong to professional organisations such as the excellent IATEFL, there is no single umbrella organisation for people who teach English independently.

Where are you in the EFL food chain?
(Image: via Wikimedia Commons)

Freelance English teaching is really a cottage industry; a near-invisible workforce of many thousands sitting at an in-company client’s desk, or maybe in a Starbucks coffee shop or in front of a Skype window at home. Admittedly, the quality of the service they provide and their levels of experience and training vary greatly; but if you compare that to the qualifications and aptitude you need to sell for an MLM company, you realise immediately that (for the most part) people who teach English really are professional and committed. Over the years I have met many hundreds of EFL / ESL teachers and they all share two main characteristics: 1) they’re basically nice people who have studied a lot and want to help other people learn and 2) they have to think twice before splashing out on a meal in a good restaurant or buying a designer jacket. In short, English teachers are good at what they do but they can’t make enough money from doing it because they are just cannibalising each other’s market, driving down prices (including their own) and unintentionally contributing to the impression that big schools are “more professional”. If cutting off your nose to spite your face was an Olympic sport, the freelance English teaching profession would be standing proudly on the podium with its gold medal (and no nose).

Of course, anyone reading this will immediately say, “Yes but these MLM companies you keep pointing to – they’re huge, commercial operations; they’ve got gargantuan marketing budgets; and they basically exist to prey on people who have got no other choice except to stump up their joining fee and try their luck. You’re not suggesting that’s the way forward for EFL teachers to go, surely?”

No, I am not. I have written recently about the idea of creating a profession-wide brand (which I have tentatively given the working title of Open Source English). Basically, this brand (modelled on the Open Source software movement and its best-known example - Linux, which has a cartoon penguin as its logo) would be something that any freelance English teacher could use to promote their own business. That’s the first thing: recognition, visibility: if all the plankton stop trying to eat each other for a minute and swim towards each other they could create a huge underwater logo (as if in a Pixar Disney movie) that would be visible from space. This is what the thousands of Open Source software volunteers have done: they have given visibility and credibility to their profession by coalescing into a movement.

The next thing is a fundamental shift in the way English teachers think about what they do and who they are. This point is related to the wider question of training, recruitment and the (lack of) structure in the language-teaching industry. Everyone knows what a teacher is: she’s someone who teaches. We all have an image of a teacher – typically a schoolteacher standing in front of a blackboard (iconically, being handed an apple by a grateful student). While teaching in the public sector is a very different kettle of fish from private EFL teaching, school-teaching is a much more structured profession where there is at the least prospect of promotion and career development. Of course, there is also a constant battle being fought, especially in the UK, where teachers often find themselves on the front line of an ideological divide marked by often bitter confrontation and recrimination. There’s really no equivalent to this in the genteel walled garden of private English teaching. You are unlikely to see in the near future (or ever) the language schools of Oxford Street empty and pour out a tide of irate EFL teachers marching arm in arm past John Lewis. (Maybe this would be a good thing, but it ain’t gonna happen, chum.)

I will have more to say on this aspect of the EFL world in later posts, including a look at the phenomenon of the Freelancers Union in the US. I am also currently researching online the various networks and informal associations that exist in the EFL world. If you would like to contribute to this debate, please leave a comment here or join the Global Business English Network onLinkedIn.

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