Sep 3, 2014Direct Sales/MLM

by Success Magazine staff writer

Which of the following predictions didn’t pan out in the end?

1) “The radio craze … will die out in time.” — Thomas Edison, in 1922

2) “I think there is a world market for about five computers.” — Thomas Watson, chairman of the board of IBM, in 1943

3) “Multi-Level Marketing will never be taught in colleges.” — Curmudgeonly college professors, in 1999

Okay, it was a trick question; all of them turned out to be wrong. If you were stumped by number three, you’re not alone. Multi-Level Marketing (MLM) — which incorporates network marketing, direct selling, and person-to-person marketing — has been “sneered at by academics no matter what its incarnation,” admits Michael Sheffield, a cofounder of the Multi-Level Marketing International Association (MLMIA) in Newport Beach, Calif. But that scholarly snubbing may be nearing an end.

Sheffield believes that for network marketing to be completely accepted in the business world, an academic seal of approval needs to be created. That means college courses devoted to MLM and scholarly journals dedicating pages to it. To this end, Sheffield, the president of The Sheffield Group, a Multi-Level Marketing consulting firm in Scottsdale, AZ, helped sponsor the “Organizing for the Future” conference at the University of Texas-EI Paso (UTEP) this past January. Among the 50 attendees were about a dozen professors from such schools as Baylor University and London’s University of Westminster as well as executives from network-marketing companies. Their mission: to set a course for bringing MLM into the world of “publish or perish.”

EDUCATING THE EDUCATORS. “Hey, these people don’t have horns!” joked Ray Bagby, Ph.D., associate professor of management at Baylor University in Waco, TX., who confessed, “I attended because I was curious about Multi-Level Marketing; it’s a hugely unresearched area. My idea used to be that these were the kind of people who made you want to shower after you were around them for a while. But when I saw how professional they were and witnessed the way they’re tapping into new technologies like the Internet, I admit, my perception changed.”

Business schools in particular, comments Doris Wood, a cofounder and now president emerita of the MLMIA, have held a similarly skewed viewpoint. The common perception is that “Multi-Level Marketing is just a method and not actually an industry in and of itself. It’s kind of a dirty little secret that companies like Sprint and MCI built themselves into the powers they are today by using Multi-Level Marketing,” Wood points out. “But I think the conference changed all that. Those professors left realizing that we are legitimate.”

The presentations by MLM executives and professors interested in MLM course work covered a wide span of topics, such as defining industry business practices, streamlining management, working toward reducing turnover, and improving prospecting. Also under discussion was the creation of a certification process for companies and distributors. The conference successfully took academic acceptance of Multi-Level Marketing to the next stage: a proposal was made to found a research center for studying the industry.

THE FUNDAMENTALS. Frank Hoy wanted to have an entrepreneurial course on Multi-Level Marketing taught in colleges as long ago as 1991, so he, as dean of the School of Business at UTEP, was eager to help set up the conference from the get-go. “At the first conference [held in April 1998], the academics were skeptical and wary,” recalls Hoy, who specializes in entrepreneurship and economic development. “This time they’re ready to teach MLM as an alternative yet legitimate means of distributing goods and services.”

But before the knowledge of experts can be imparted to students, someone has to teach the teachers. And even then, “to teach classes, you have to have something to teach,” says Jim Chrisman, Ph.D., associate dean of research at the Faculty of Management at the University of Calgary. “We just don’t have hard data on Multi-Level Marketers.”

That’s where Hoy’s idea for creating the Center for the Advancement of Network Marketing comes in. The center’s mission would be to build a database of MLM companies and to solicit grants for research. Academics from around the world could come to UTEP both to teach and to learn about Multi-Level Marketing. Then they could put together a curriculum for distributing that knowledge at their own schools through undergraduate and graduate courses.

But what that course load would consist of, Chrisman says, is hard to determine. One consensus at the most recent UTEP conference was that there is a severe shortage of objective information about MLMs, despite there being, according to the Direct Selling Association, some 9 million to 12 million people working for hundreds of MLM companies.

“That’s part of the catch-22 of bringing network marketing into universities,” Bagby explains. “MLM can’t be completely accepted — and taught — at the university level unless there’s published research on it. But doing the research and getting it published is not easy without more acceptance, which comes from a deeper understanding and teaching of its principles and practices.”

One advocate for MLM research is now Baylor University’s Bagby, who also edits the quarterly journal Entrepreneurship Theory and Practice. “The need for good research is paramount,” he said to attendees of the “Organizing for the Future” conference. “In time,” he predicts, “it should be as ordinary as franchising.”

And what of the evolution of franchising? “Business schools didn’t think much of franchising at first either,” says Sheffield, “just as they ignored family-owned businesses and the small-office/home-office phenomenon. Now those are written up in university journals, which puts the stamp of approval on them. They’re all textbook cases of how a ‘fringe’ phenomenon eventually gets acknowledged and even advocated.”

So, when will MLM make it into the classroom? Some people, like Chrisman, may soon append it to an existing curriculum on entrepreneurship or marketing. And Hoy expects that within one school year the first for-credit course dedicated solely to network marketing will be taught at the undergraduate level at UTEP, with the graduate level following soon after. “It’s inevitable,” he says. See you in class.