Wood: Empower Network is “not about the product”
My single biggest criticism of Empower Network has been that, at the monthly subscription levels, essentially you’ve got affiliates paying eachother for a product was readily available for free.
Pay your $125 a month to the person who recruited you plus an affiliate fee to the company, and off you go “working” your new Empower Network business – trying to get other people to do the same.
In answer to this long-standing criticism of their business model, Empower Network spent “millions of dollars to develop their own blogging platform.
Codenamed ENV2 and hyped up the wazoo as a “WordPress-killer” and something that would “change the way people blog forever”, on October 11th Empower Network purportedly spent $500,000 to launch their new blogging platform.
Here’s how that worked out:
As I understand it, there’s more affiliates than ever in Empower Network chasing entry into their Millionaire’s Club, so how on Earth did a new product launch trigger a plummet in interest into the opportunity?
The answer lies in Empower Network’s most candid addressing of the issues surrounding their pass-up business model yet.
In a YouTube Hangout titled “confessions”, Empower Network Chairman David Wood declared the company ‘wasn’t about the product‘.
With the launch of ENV2 failing to sustain interest in the business, that much alone was self-evident. David Sharpe went on to reveal that the launch of ENV2 ‘did not turn out the way we wanted it to turn out‘, resulting in ‘no more sales than a regular week‘.
The message I took away from that?
From a retail perspective, nobody was interested in paying Empower Network $25 a month for a sub-standard WordPress clone.
That’s the bottom line.
So what did you have left? Those who were already paying their $25/$125 a month, trying to make it big.
Why is this important?
Well it highlights the issue with affiliates paying affiliates. Contrary to Empower Network’s marketing lingo, they didn’t introduce the concept of 100% of what affiliates pay into an opportunity being paid to the person who recruited them (or the person who recruited the person who recruited them etc.).
Cash gifting schemes have been using this model for decades.
What is attached to this payment model is typically irrelevant, as success or failure is defined by how many participants are paying eachother at any given time, and their ability to rope new participants into the scheme.
In the case of Empower Network, the idea was that affiliates and retail customers blogged, gaining exposure to whatever it is they were marketing. Empower Network for affiliates and typically a third-party business for retail customers.
The reality is that exposure-wise, Empower Network’s rebranding of WordPress blew.
2012 started with a measly 2% of domain traffic originating from search engines. 2013 started with 4%, peaking briefly at 6.5% around March.
Today the percentage has recessed to what it was around early 2012, hovering around 3.5 – 4%. The launch of ENV2 saw the percentage drop below 4% for the first time since late 2012.
Comparatively, WordPress’ own hosted platform has enjoyed a higher than 20% ratio of search traffic for most of 2013 (currently at 25% or so and rising).
I make a big deal about this because for the longest time the answer to “you are just charging $25 a month for WordPress!” was “but we have awesome SEO plugins and mad SEO skillz!”.
Which, as is evident by the 90%+ of traffic to Empower Network being sourced from affiliate marketing campaigns, was complete bullshit. Infact, not only was only 4-7% of the domain’s traffic from search engines, pretty much the entire bulk of that traffic was related to the income opportunity (searches for “Empower Network” and terms related to the business opportunity).
We’re going through a transformation that’s not about blogging.
This company is not about the product, not about the blog, it’s about empowering people.
I don’t know what Empower Network are going to attach their compensation plan to next, but it appears the days of pretending to be about blogging are over.
That leaves what? A bunch of affiliates paying eachother for what exactly?
Oh right, paying eachother $25 or $125 a month… and paying their affiliate fee so they can recruit others to do the same. Anything made from the other tiers is of course just gravy.
What on Earth is going to happen to what little there was of the retail side of the business?
Not much was revealed on the Hangout, other than a drawn out sales pitch for Empower Network’s upcoming “Freedom” event, to be held next year in Miami.
In addition to urging Empower Network affiliates to buy three tickets each, Wood told them
I don’t care what it takes, I don’t care what you have to go through… get to Miami.
What was mentioned was a vision to officially branch out into India, Europe, Canada, South Africa, Chile, Brazil and Costa Rica (and presumably elsewhere).
Up until now Empower Network has been available globally, but the company primarily focuses on the US market and affiliates. If there’s a decline there then I can see the need to expand.
How that’s going to work when Empower Network “is not about the product” though, I have no idea. What exactly are they going to sell them on?
Ultimately the problem Empower Network faces now is the same it’s always been, the way affiliates are paid. Yes there’s a retail option but I think we’re beyond the point of pretending it’s viable.
I mean hell, if you can’t get affiliates to stick around and pay their fees what hope do you have attracting non-affiliate customers?
When your core business model, call it “empowering people” or anything else, revolves around affiliates going “all in” and then recruiting new affiliates who do the same – what you attach it to, be it someone else’s blogging platform, your blogging platform, training videos, paper airplanes etc., doesn’t matter.
All that matters is you keep those monthly subscription payments flowing through the system, which requires those at the bottom to be able to find new people to pay them each month.
Notably with Empower Network having launched in November 2011, we’ve just hit that 2 year mark when recruitment-driven schemes typically hit a wall and begin to collapse.
I’m not saying that Empower Network’s quite there, or that Wood and Sharpe can’t keep it going for a bit longer yet – but just that this is statistically the point where schemes that rely on affiliate fees and recruitment fall apart.
I think 2014 is shaping up to be the year we find out what happens if Empower Network can’t sell the promise of receiving $125 a month from people they’ve convinced to “go all-in” to the rest of the world.
Should be interesting to watch it all play out…