Making Money with “OPM” (Other People’s Money)?
by Antone Roundy | 3 Comments | Ethics, Podcast
I feel a rant coming on.
Have you ever had a high-priced product offered to you as an opportunity to make money using "other people's money"? The pitch goes something like this:
Pay for our $5,000 product with your credit card. Sure, you'll pay your credit card company X% interest. But once you're through with our product, you'll be earning $Y,000 per month, so you'll be able to pay it off in Z months. So basically, you're investing in your businesses, but you don't even have to put up the money.
If everything pans out according to plan, sure, the numbers add up. But how confident can you be that it'll pan out? And what's going to happen if it doesn't?
One big complaint I have about high-ticket products is that the vendors are willing to sell them to anybody who puts up the money.
- They don't pre-screen prospects and discourage those who clearly aren't ready for the product.
- They don't help prospects qualify themselves by explaining clearly what's going to be involved -- what skills you'll need, how much time you'll need, and what you'll have to be willing to do.
Quite the contrary -- they make it sound like anyone can make it work. But what if it requires public speaking, and you're deathly afraid of public speaking? What if it requires you to be able to read people well, but you're a bit socially inept? What if it requires lots of research, but you read too slowly to keep up?
I've seen people who've paid several thousand dollars for a product that they clearly weren't qualified to use. And I've heard the sales pitch that talked them into it. The pitch implied that they'd been hand-picked by someone who I doubt was even involved in selecting prospects.
And what if your money-making system involves activities that some people would be unwilling to do -- whether because they're unethical, extremely time consuming, highly risky, etc.? If you're not disclosing enough in advance to let people make an educated buying decision, you've crossed the line. You can't blame the customer for not following through if they have legitimate reasons for it that you should have notified them about in advance.
If you're honest about what your product is and who it is and isn't for, pre-screening buyers isn't necessarily your responsibility. But the more your sales copy leaves unknown, the more responsible you are -- especially if your product is expensive. And if you're actively encouraging people to finance their big-ticket purchase using "other people's money", but not pre-screening customers, you are what's wrong with the world.
The seller shouldn't be the only one making money with other people's money.
The danger in investing other people's money is that the "other people" may end up being you're spouse, your children, or family members who come to the rescue when things don't pan out.
If you're thinking of taking the plunge, dig deep enough to be sure that the product lives up to the sales pitch, be sure you're protected by an iron-clad money back guarantee, and don't be afraid to use it if you find out you've been deceived.
December 16th, 2010 at 6:23 am
Antone
Thanks for sharing the rant I should have wrote.
Awful marketing method.
The more people who read this the better.
Jim
December 18th, 2010 at 6:12 pm
Excellent points, I've been in that situation in the past. It really is a hurtful way to do business.
June 17th, 2013 at 12:30 am
Isn't the primary job of the seller to sell the opportunity? I'm not writing about outright lying or 'lying by omission'. Of course I'm not supporting that. But, don't you know better than anyone else whether you're, for example, afraid of public speaking? Can't you tell whether something is moral? Legality is a bit more of a fuzzy issue. I would probably tell someone to check whether something is, i.e., legal in his or her state. However, ultimately is it not that person's responsibility to check on the legality of the issue? This brings to mind the old axiom, "Read the fine print".