MLMs and Their Misuse of Life Coaching Language

You may have heard the term MLM, or Multi-Level Marketing, in the past few years. Oxford Languages defines it as “the practice of selling goods or services on behalf of a company in a system whereby participants receive commission on their sales as well as the sales of any participants they recruit.”  

The waters are muddied when life coaching language is utilized by Multi-Level Marketing companies, well-known examples of which are Herbalife and Amway. These companies, which offer self-improvement and personal development are coupled with questionable tactics wherein prospective participants must buy-in and then sell to new participants, in the hopes of earning back their original investment plus a sizeable profit, leading to a corresponding lifestyle change.  

What do we mean by life coaching language? 

Improving oneself is theoretically a series of practical steps. But the idea of betterment, the desire for more, is an abstract concept as well. It looks different for each person. Consider words like ‘success’, ‘achieve’, ‘independence’, ‘wealth’, ‘abundance, ‘prosperity’; they spark our imaginations and speak to our deepest fears and desires. Opportunities for emotional manipulation can profligate. We can’t overstate the importance of learning the correct life coach language and ethics, which can be done through an ICF certified life coach training certification. 

 

Source: Patti Perret from Sony, SHOWTIME

 

A good illustration of the dangerous misuse of life coaching terms to further direct sales profits can be found in Showtime’s On Becoming A God in Central Florida. Kirsten Dunst plays Krystal Stubbs, a woman who is drawn into the world of Founders American Merchandising (referred to by the acronym FAM, lending a sinister tone of faux togetherness). The grandiose promise of success, of being able to leave the drudgery of everyday life behind, drives her family to ruin and her on a very entertaining revenge-spree. However, the characters illustrated in the series have very real resonance with the stories of many who have been seduced by the dream of self-improvement and success through MLMs, only to find themselves worse off and without legal recourse. Reddit plays host to a 700,000 strong community under the thread r/antiMLM/. 

These schemes, which are recognizable to us now as social media offers to join promo teams for brands, endless ads promising the possibility of being your own boss (#bossbabe), the siren call to get off the wheel and finally achieve material abundance. This is done, purportedly, through manifestation and mindset shift. However, overlaying this mental reset is the pressure to keep selling products. This type of content, wherein metaphysical progress (working through the psychological obstacles most humans face at some point) is tied to material progress, has the very real consequence of placing responsibility for struggle solely on the individual’s willpower, ignoring the systemic issues that limit many from achieving their goals of success. It also serves to hide the agenda of those who have recruited you into their ‘downline’, as MLMs call the new recruits.  

Regulating MLMs: Amway and the FTC 

Amway was started in 1959 and is the largest MLM in the world. Amway has faced accusations of being a pyramid scheme, which the OED defines as:  

“[A]n illegal way of making money, in which people are persuaded to invest money or sell a product and to persuade others to do the same, with the later investors paying money to the earlier investors, until the payment structure collapses, and most people lose their money.” 

The main distinction between a pyramid scheme and an MLM is that MLMs sell the product (home goods, clothing, cosmetics, etc.) as the investment that will generate returns, rather than asking for a strictly financial investment. A New York Times article from 1979 notes the perspective of the Federal Trade Commission on Amway:  

“In 1975, the regulatory agency filed a complaint charging that Amway's sales plan was “a scheme to pyramid distributors upon ever‐increasing numbers of other distributors,” that it was “doomed to failure,” and that it contained an “intolerable potential to deceive.”  

Amway was ruled by the FTC not to be a pyramid scheme and so continues to operate, having settled out of court. Interviewed by The Guardian Daryl Koehn, a professor of business ethics at DePaul University in Chicago, points out that “even when MLMs have products, they become pyramid schemes if there is a high cost of entry or if presenters build up inventory they can’t sell.”  

Regulation of MLMs can occur through such regulatory bodies as the DSA (Direct Selling Association). An excerpt from the Code of Ethics section of their website reads, “For example, the Code prohibits statements or promises that mislead consumers or prospective salespeople and sets stringent guidelines for earnings representations, product claims, sales and marketing tactics and policies for order cancellations and returns. DSA members have strengthened the Code since its enactment in 1970 to ensure it stays relevant with changing stakeholder expectations.” However, underneath this is a long list of sponsors for 2022, which includes Amway, Herbalife and others. 

The best way to protect oneself against outlandish claims of a path to quick success is to thoroughly research any such program and to remain skeptical of anything that sounds too good to be true. There are many ways to improve lifestyle, to gain confidence and purpose. Your own intuition and good sense coupled with community oversight will help you avoid investing your time and energy for little return. 

If you are looking to work with a life coach, or want to become one yourself, be sure to get your coach certification from a reputable school with an accredited program.

Written by Nicole Durocher