The expectation of riches filled the conference room of the Woodlawn Holiday Inn. Big money was in the air.
There must have been two hundred people packed in there that recent Thursday evening. They were present to hear the testimony of a sharply dressed young man from Atlanta. Wearing a razor sharp blue double-breasted suit, this speaker, Kamal Carter, could barely hold contain his enthusiasm. We can profit from coming of the information superhighway, he told us all, by selling long distance service for LCI International. Carter works for an organization known as ACN, which markets LCI's long distance service.
I first heard about LCI from a coworker. That week, I also heard from a second coworker about Excel, another company similar to LCI. Both buy long distance time at wholesale and then resell it. But instead of spending money on advertising, they offer a percentage of a customer's monthly phone bill to the individual who signed him or her up. A small percentage to be sure (LCI offers four percent), but one paid out every month.
My coworker asked if the sudden appearance of all these grass-root telcos had anything to do with the recent deregulation of the telecommunications industry.
No, I replied, it has more to do with the age-old wish of becoming rich by doing very little work.
But I'm cynical about this sort of thing--and perhaps in the minority. At least in that conference room I was. Brought to this meeting by a "friend" of my friend, I was embarrassed to be the only one wearing shorts--these people were serious about selling and were dressed to kill.
"I told you it was business meeting," she reprimanded me. A curious one at that. Instead of discussing of the myriad complexities of long distance rates, Carter merely wrote down the figure $7000 on a chalkboard, and asked what everyone in that room could do with that $7000. He joked about the old car sitting outside the house, the high credit card payments, the traffic jams on the way to work. "Do you see a Rolls in that traffic jam? Do you see the CEO of your company in that traffic jam?" Of course not, he answered, he's off at the golf course.
Well, the CEO of the company I work for drives a Volvo (or the company minivan), but never mind, the question was clear--how can we be our own CEO's? Easy, spend $69 to be a "customer representative" for LCI, which allows you to sign up other customers and get a percentage of their monthly bill. Carter urged those in attendance to sign on themselves, their friends and families. It should be easy to do this, Carter claimed. By switching to LCI, people can save up to 40% off from their bills.
Which is true, sort of. If you're like me, and don't know which "savings plan" you're on, you probably could save by switching.
But with an additional 10 minutes of calling around, you could save even more. My rep told me that LCI charges 19 cents a minute during the day, 14 cents in the evening and 12 cents at night. So, if I'm a daytripper, 19 cents beats Sprint's 25 cents a minute, but not MCI's flat rate of 15 cents. Conversely, if I call mostly in the evening, LCI's 14 cents beats MCI's flat rate by a penny, but still falls short of Sprint's much touted dime a minute. Add in other bonuses (cheaper calling card rates, etc) and LCI has a fairly competitive rate.
As far as that $7000 goes, though, wouldn't one need to sign on something like 5800 customers (figuring an average $30 monthly bill)? That's a lot of friends and family.
Well, that's not taking in the factor of "exponential growth," Carter reminded us. That evening, he pushed the $495 Field Trainer option, which basically allows you become eligible to sign on other field trainers, and get a percentage of their customers' phone bills (1/2 of one percent) and their customer's customers phone bills and so on.
ACN is a multi-level operation, a telecommunications Amway. And just like the money-struck stares of those Amway reps fondling their newly purchased five-dollar bottles of shampoo and dreaming about what to name their yachts, no one here asked Carter any critical questions--you know, the kind usually asked at "business meetings." What is the subscriber attrition rate? How many field trainers are already in Baltimore? If there's too many, won't the market be saturated? What's the average Field Trainer earn? How many make $7000 a month?
Which is not to say someone couldn't get rich if they just worked hard enough, like I said, I'm cynical. But these multi-level schemes are uphill battles. Sure, it's easy to sucker a loving relative into buying make-up or switching long distance companies. Cold calling, that's what selling to strangers is called, is much harder--particularly with an unknown brand name.
In fact, truly good salespeople--the type new ACN reps will have to be and the kind they'll need to work for them to get any money at all--are the rarest of creatures. Ask any sales manager. The good ones would have no problems finding riches at any organization, so why would they go with one that makes them pay for their training seminars and motivation kits, such as ACN does? In fact, isn't it counterintuitive for ACN to charge for training at all?
Only if they plan to make more from their salespeople than from their seminars.