A lot of the success stories for online and offline MLM are based on promises made to customers.
But according to the head of the Centre for Digital Marketing Research, Anupram Shrivathava, these promises are rarely kept.
“These companies are all based on the promises they make to customers,” he said, adding that the promises are not always kept, and that many companies do not even bother with the fact that promises are made in the first place.
“They are very happy to get a customer, but they don’t want to make promises and make the commitment to the customer.
The promise they make is for a service, not for a product.”
Shrivastav said that there are companies out there that do make promises, but there is no transparency in terms of what is actually happening.
“The customers are the ones who are asking for these promises.
What we are saying is if you make promises to customers, they are not going to get it,” he told The Wire.
Shrivathav also added that it was difficult to get the customer to give money because of the high cost of doing business in India.
“When you give money to a customer and you don’t actually deliver, you are not getting your money back.
You have to ask your customer, ‘Have you really wanted to get your money?
If not, why are you giving it?'”
Shrivasta said that MLM’s main challenges are the following: Lack of clarity on promises in the company’s own social media channels, lack of transparency on promises that are made by its own employees, and poor communication between customers and MLM executives.
“I think these are the biggest problems that MLMs face,” he added.
Shri Sushil Shah, Director General of the Consumer Electronics Association (CEA) said that the internet has made it easier for consumers to share their grievances, and it has also led to a “growing movement of customers and consumers demanding transparency in MLMs”.
“What we see in India is a huge rise in consumer dissatisfaction.
I believe that this is a direct result of the digitalisation of society,” he pointed out.
“The consumer is more likely to say, ‘I am unhappy about this.
I want to change my behaviour.
I am not happy with my relationship with my spouse.
I need to change it.
So how can I do this?'”
Shah added that the industry should also address issues like the lack of clarity in its social media presence, which is the first step towards improving communication.
“People don’t trust brands that don’t disclose their social media strategy.
The consumer should also be able to trust brands in terms and quality of communication,” he observed.
According to Shrivasta, the online marketplace has also been a huge driver of MLM growth, and the industry needs to create better platforms for consumers and users to share grievances.
“A lot of online and mobile platforms don’t have proper platforms for grievance sharing.
The platforms have to be created so that the grievances can be shared,” he stressed.