Great marketing lessons from a renowned successful ponzi scheme
I am often amazed by the amount of money that companies spend on marketing.
Sometime in August 2016, a friend called me and after exchanging pleasantries, she became silent. “Cynthy what is it?” I asked, “Ihenna I am finished” she replied. She didn’t need to explain because I already knew what finished my smart and confident friend — MMM.
I had imagined this moment many times, how much I would enjoy telling her the infamous “I told you so” But as I looked at her grief-stricken face, the words got stuck in my throat “My husband will kill me o” she wailed. And I just stared, how could this happen? How could Cynthia fall prey to this well-known scam? She is a philosophy lecturer in one of the universities, how can a very educated woman like her be so gullible?
Then I realized what happened. MMM won over countries like Nigeria, Russia, Zimbabwe, South Africa etc because the used one of the oldest and most powerful marketing strategy — Word of mouth. When MMM came to Nigeria, there was no advert anywhere about them, no seminar, no Youtube or Facebook ad, nothing. So how then did a Russian Ponzi scheme reach more than 40 Million Nigerians in just 3 months? How did they get more than 30 million Nigerians to become clients in less than 6 months? How come people invested in this scheme despite several warnings from the government and well-meaning Nigerians? Here are the four strategies used by MMM to penetrate Nigeria and other countries:
1)Greed: Just like every successful Ponzi scheme, MMM appealed to the greed of Nigerians, they promised 30% return on investment in just one month with the option to roll over and compound interest. How many businesses in the world could generate this sort of mind boggling profit? Maybe the type of business that is peddled by internet fraudsters, where you invest $100,000 in a gold mine in Africa and get $2,000,000 the next month…(laughs). There was no product sold, no service rendered, just pay in money into a random account that would be sent to you and receive your capital + 30% ROI at the end of the month.
The most amazing part of this comic series is that even when you invest two days to the end of the month, you would still receive your 30% interest. Wow! This strategy dazzled both educated people and illiterates, the rich and poor and sent most Nigerians scrambling for money to invest in MMM. Banks received the highest hit from this as most people withdrew their savings from the bank and invested it in MMM
2) Conspiracy theory: When the government and banks raised alarm due to this disturbing trend, MMM promoters told their investors that the government officials want to keep them subjected to poverty. And who would blame the banks for crying wolf when the deposit was no longer frequent. Of course it makes perfect sense that the government of one the most corrupt economies in the world would want to keep their citizens from getting rich. And the banks? Oh they are just jealous! This theory outraged Nigerians and even fueled their resolve to prove the government wrong and get rich.
3) Word of mouth: This is the oldest and most productive marketing strategy. Imagine that my dad(I adore my dad)woke me up early in the morning to introduce a Ponzi scheme to me. Even if I do not believe in these things or have no appetite for frivolous investments, I would at least give it a second thought. If my almost perfect dad could invest, surely there is some part of the scheme that I’m not seeing.
MMM didn’t spend money on marketing, they didn’t need to, Nigerians made sure of that. Major chat rooms in the country was buzzing with this divine way of making money, neighbors told each other, The working class pleaded with colleagues to join, bosses encouraged their employees to invest, in the bus MMM, in the church MMM, at work MMM, even some celebrities encouraged their fans to invest. Surely what could possibly go wrong with sending money to a randomly nominated account and have someone else send to you? Who needs a TV advert when your pastor is preaching how you could put the witches in your village to shame and invest in MMM? What good is a Google advert when your friends keep showing off with the goodies they bought with money from MMM?
During the MMM boom, one of my colleague cruised to work one morning with a new car and when I asked how come, he said “My sister I thank God o, thank God for MMM, I go kolet my 2 million Naira last month from those oloshi banks and invested it in MMM, I don collect my 600k(30% profit) last week, I just add small moni to am come use am buy this motor o, wo na God jare” Meaning: I collected my 2 million naira from those unfortunate banks last month, I just added a little money to the 600k I received to buy this car…in fact it’s just Gods work. I just shook my head and told him that he was digging his grave. He just looked at me like my head was on fire; the disbelief on his face was touchable. When he could recollect himself from wondering why my ancestors have closed my eyes to wealth, he told me that he was selling off his shares and that he was going to invest 4M naira the next month and leave it till December. This was in October, so when his wife came to the office in December to embarrass him about mortgaging their future, I had no pity for him.
4) Bad publicity: MMM tapped into the wisdom often used by celebrities and reaped the benefit of their notorious reputation. All the warning from the government, banks and few top Nigerians helped this well-known scam succeed. Because journalist made so much noise about MMM, uninterested people became interested; they reasoned that there must be more to this scheme than the glaring scam theory going around the country. Why else do you think that the a nude photo of Kim Kardarshian receives more views and likes than the photo of a 19 years old girl advocating for the education of girls in Pakistan? Who cares about Pakistan or world climate when there is a scandal to entertain us right?
Wouldn’t it be better if brands soft-pedal on huge marketing spend and incentivize the use of their products/services instead? This way, customers feel rewarded for choosing your product or service over the many other options that they have. Nothing motivates people than the knowledge that there is something in it for them at the end. This is the major failure of Nigerian banks, because they just keep taking and never give back. Customers in their little way of rebelling against them sought succor in thrift saving. This also the singular reason behind the success of Etisalat in Nigeria. MTN and other telecommunications networks didn’t see them coming, they bulldozed almost a third of the market share by giving Nigerians 3 times the value of their recharge. Glo followed suit, then Airtel and even the almighty MTN is giving bonuses…Na wa o.
Appeal to the finer side of people, make quality products or render excellent services so that even when you exploit peoples greed to make sales they would hardly notice. Make customers think they are making a killing and actually let them making a killing sometimes and just watch them use your products/services religiously. By making people see that it is in their interest to use your product/service, companies make loyal customers without the need to coax through mindless adverts. Above all make your customer’s choice of your product/service count for something. The best marketing is the one done by satisfied customers.