MLM Mind Game: Real Life Experience vs. External Perspective

Many MLM distributors will try to reject someone's well-formed logical argument due to the fact that they have no real life experience in MLM. This is an attempt to avoid the well-formed logical argument with a red herring, which is defined as "a piece of information which is intended to be misleading, or distracting from the actual issue."

There are many, many real world cases where we rely on external perspective instead of real life experience. If someone were say that the ramifications of jumping off a bridge generally involve serious injury or death, would you ask that person if they have real life experience of jumping off a bridge? No, you would use common sense from an external perspective and evaluate the ramifications before being a part of it.

MLM distributors dismiss those with external perspective to limit any opposing views to people who have real life experience in MLM. Those with real life experience in MLM either were successful in making some money (the less than 1%) or lost money (greater than 99%). The MLM proponents will then say that you shouldn't listen to those who "failed" to make money, because they didn't know what they were doing. This leaves only one set of people that the MLM proponents deem as having the right experience to listen to... the very few people who happened to make money in MLM because they were in early and at the top of the structure. Of course, these people are going to say great things about MLM, especially because they stand to benefit if more people are recruited into MLM. This is a common tactic of Tim Sales.

The reality is that the people who aren't in the MLM are the ones with the most valid opinion. They are the ones who are not biased. They don't stand to gain or lose any money if you decide to join or not. It is the MLM proponent that wants you to join - they stand to make money if you do.

Need another reason why not to listen to those in MLM? Look at the overly optimistic probability bias of sunk costs. That's a mouthful. However, it goes a little something like this:

"In 1968 Knox and Inkster, in what is perhaps the classic sunk cost experiment, approached 141 horse bettors: 72 of the people had just finished placing a $2.00 bet within the past 30 seconds, and 69 people were about to place a $2.00 bet in the next 30 seconds. Their hypothesis was that people who had just committed themselves to a course of action (betting $2.00) would reduce post-decision dissonance by believing more strongly than ever that they had picked a winner. Knox and Inkster asked the bettors to rate their horse's chances of winning on a 7-point scale. What they found was that people who were about to place a bet rated the chance that their horse would win at an average of 3.48 which corresponded to a "fair chance of winning" whereas people who had just finished betting gave an average rating of 4.81 which corresponded to a "good chance of winning". Their hypothesis was confirmed: after making a $2.00 commitment, people became more confident their bet would pay off. Knox and Inkster performed an ancillary test on the patrons of the horses themselves and managed (after normalization) to repeat their finding almost identically.

Additional evidence of inflated probability estimations can be found in Arkes and Blumer (1985) and Arkes & Hutzel (2000)."

Bottom Line: Once someone is invested in MLM, like betting on a horse, he/she is going to be more optimistic about the prospects of it. When you combine that with his/her financial incentive, the result is that the person is going to give the predictable positive response towards MLM. It is the external perspective that is free of financial bias and not clouded by their investment.

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