Lyoness: A common mistake

Whenever I speak to someone about Lyoness, it’s usually a question I get asked within the first 5 minutes.

“Is Lyoness an MLM or pyramid scheme?”

It’s a common mistake to be sure. But when you closely examine programs that are true MLMs (Multi-Level Marketing) and try to compare them to Lyoness, they just don’t match up.

See, MLMs are based on sales. Look at the definitions from a few web pages on MLMs.

Multi-Level Marketing. A sales system under which the salesperson receives a commission on his or her own sales and a smaller commission on the sales from each person he or she convinces to become a salesperson. (LINK)

Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant’s “downline”, and can provide multiple levels of compensation. (LINK)

As can be seen in both examples, for people to make money in an MLM, they have to be selling people something. It is also sometimes referred to as “direct selling”, using personal referrals to get people to buy their product (e.g. Amway, Nu Skin) or lay down cash to join some system (e.g. ACN).

Lyoness is nothing like those.

In a group like Amway or Nu Skin, people make money when you buy their product and become a distributor yourself. But the problem here is that you have to convince people – either those in the system or those outside of it – to buy a product they likely would never buy on a normal shopping trip. It could be stuff they do buy, but at an exaggerated price. And if you decide to be a distributor, you have pre-buy inventory and have a way to store and deliver it to your customers.

Or it could be like ACN, where there are actually a few cool products that consumers might buy. But this program only makes people money if they (A) pay $500 to get into the system and (B) get others to buy into the system as well. People involved in these kinds of MLMs typically find the customer stream of family and friends running dry very quickly for a variety of reasons, not the least of which is who has a spare $500 lying around in this economy?

So how is Lyoness different?

Lyoness is all about the shopping you already do, not selling someone something they don't really need.

Lyoness is all about the shopping you already do, not selling someone something they don’t really need.

First, Lyoness is not predicated on selling, but buying. Sounds like semantics, right? Not really.

People can earn cash back on every purchase they make through a Lyoness Loyalty Merchant. How does that work? Simply put, Lyoness Merchants reroute a portion of their advertising budget to say “Thank You” whenever you shop with them instead of putting that same money in some advertisement and saying “Please come shop with us.”

So you can make money in Lyoness if all you did was shop at member merchants and never told another soul? Yep. Not a lot, but nothing worse than the time you spend sifting through a Sunday paper and cutting out endless coupons for 25 cents off a box of Capt’n Crunch.

Ah, but what if you do share it?

For starters, people joining Lyoness do so for FREE. That’s right, the new member does not spend a single cent to come on board. No big buy-in. No bunch of over-priced products to buy. Just let a Lyoness member know you want to earn cash back whenever you shop, they sign you up and you’re in. It’s that simple.

There is a cost for someone signing up. It can be either $1.50 or a whopping $3.00. Those prices are for being registered online (the former) or by using a Friendship Flier (the latter). And that miniscule cost is born by the person signing you up. They are paying the small processing fee to get you in and saving on your shopping – just like they are already doing.

Now, the person who signs you up will benefit from your shopping. Not your selling, but your buying. And that’s just you buying the things you do every day, week or month. Just shop with Lyoness Loyalty Merchants and everyone benefits.

And for sharing it with you, merchants give the person who referred you to the program a small benefit. Again, it’s not a lot, but share it with a bunch of people and it could end up being anywhere from a few tanks of gas a month to maybe a whole grocery run.

So what’s the catch with Lyoness? When do I have to buy a bunch of stuff from them?

You don’t and you never will.

As you shop, part of the benefit is that a portion of the Loyalty Benefit from each Lyoness Merchant goes into your Back Office. It sits there until it creates an Accounting Unit, or what some members call a Shopping Unit. When that unit equals $75.00, it begins moving through a pipeline based on how many people you’ve shared Lyoness with. And when it pops out of the end of the Level 1 pipeline it’s worth $695. That could take a month or it could take 20 years. It totally depends on how much you want to share the Lyoness cash back shopping program with people you know. It’s all up to you.

And there are five Accounting Levels, each getting progressively bigger as they go.

Cubs-logoThere is an option where you can buy some Shopping Units (known as putting a down payment against future shopping), but that is totally optional. You don’t have to do that ever unless you want to. Again, if you wanted you could just shop with Lyoness Merchants and get your cash back from now until the Cubs win the World Series or the end of the world (whichever comes first, and I wouldn’t wait on Chicago) and no one would ever ask you for any additional cash.

And even if the Cubbies did manage a world title, you’re still not getting hit up for more cash.

Lyoness is different and it’s slowly changing the way people think about shopping. While various stores create their own rewards programs to get people to keep shopping with them, their cards are only good at their store. Lyoness is just people banding together to form the world’s largest shopping community, leveraging the same shopping power as people who belong to Costco or Sam’s Club. (By the way Sam’s Club is a Lyoness Merchant, Costco is not.) The bigger the numbers, the better the discounts.

As of today there are 1,963 merchants in the United States that have joined in, with thousands more around the world.

If you’d like more information on Lyoness, click the image at the right or send me email below. The information is free and so is the membership.

Your cash-back lifestyle is just a click away!

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About Tim Allen

I am a former newspaper writer/editor/page designer that still loves to write and share my experience and views. I presently own a digital marketing firm and live in a small town in Big Sky country.

Posted on August 3, 2013, in Business / Finance and tagged , , , , , , , . Bookmark the permalink. Leave a comment.

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