Q: I recently joined an MLM company and have been building a sales team. Last week one of my downline members attended an opportunity meeting and was solicited by another distributor to join a completely different company. I'm concerned about having my people go to meetings now. It doesn't seem fair. What should I do?

A: This is an issue of questionable integrity and unethical behavior as well as a direct violation of the policies and procedures mandated by most MLM companies today. Obviously, you've worked hard to recruit your downline. Motivating your distributors into action and building product and company loyalty is hard enough without being sabotaged by others in the same company.

As you would expect, there are many companies looking for ways to recruit new distributors. While I personally recommend monogamy when it comes to the company you represent, it's not uncommon today to see people be members of more than one company at the same time. You should always assume this is the case. This is usually allowed under the company rules, but there are typically strict rules a company sets forth pertaining to conduct concerning what's called "crossline sponsoring."

Crossline sponsoring occurs when a distributor sponsors or attempts to sponsor someone within a company where they're both members into a competing company's business opportunity. Crossline sponsoring usually indicates the violator is crossing lines of sponsorship to steal another company member's recruit. However, it can also mean they're soliciting someone who wasn't recruited directly by them but is somewhere in the depth of their own downline and sponsored by a downline member.

When you joined your company, you signed a distributor contract. If you look at it closely, you'll probably see it indicates that the rules and regulations set forth by the company are considered an extension of this contract. These regulations are usually issued as a separate document and inserted in your distributor manual. Crossline sponsoring is most likely a restricted action in this rules and regulations document. If not, it absolutely should be. Crossline sponsoring, if discovered, usually results in a severe reprimand of the violating distributor by the company that many times leads to termination of the offending person's distributorship. The reasons are obvious.

Much of the bonding of the organization's members is developed during business opportunity meetings, rallies and training programs. You want to feel that these meetings are a safe haven for your new or potential recruits. In fact, my experience has shown that the social interaction with other people in the same company but different sales organizations is critical for building good corporate culture through group dynamics. One thing that makes this system work is development of trust and a spirit of cooperation among all the different distributor groups. The rules and regulations of the company that have been agreed to by each distributor should create a level of confidence that the company will offer protection from unethical people who attempt to steal away a fellow downline distributor for another company opportunity.

As an expert witness for the MLM industry, I've testified in a number of cases related to this issue. Many times the violating person may not have read the rules and didn't realize this was wrong. I should point out that the rules usually say members can talk to the people they personally sponsor about other opportunities but they can't talk to anyone deeper in the genealogy tree. The best way to protect yourself from this situation is to build a strong and positive relationship with your sales team. People don't jump ship that easily when they've bonded with their upline sponsor, the company products and the company itself. It also isn't out of order for you to register a complaint with your company on this issue if you're absolutely convinced this is happening. It's your business and income that can be affected. Protect your interests like any serious businessperson would.

 

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Michael L. Sheffield is the founder of Sheffield Resource Network, a full-service multilevel marketing consulting firm in Tempe, Arizona. He is also the co-founder and chair of the Multi Level Marketing International Association (MLMIA), whose members represent companies throughout the world.


The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.