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Article

Building Long-Term Business Sustainability: The Influence of Experiential Marketing on Sales Representatives’ Loyalty to Multi-Level Marketing Systems

by
Ioana-Mădălina Purcaru
,
Ana-Maria Urdea
,
Cristinel Petrişor Constantin
* and
Gabriel Brătucu
Faculty of Economic Sciences and Business Administration, Transilvania University of Brasov, 500036 Brasov, Romania
*
Author to whom correspondence should be addressed.
Sustainability 2022, 14(15), 9507; https://doi.org/10.3390/su14159507
Submission received: 16 June 2022 / Revised: 19 July 2022 / Accepted: 29 July 2022 / Published: 3 August 2022
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Abstract

:
Monitoring the satisfaction of sales representatives is a major challenge in business based on multi-level marketing systems (MLM), as a high level of satisfaction could determine the sales representatives’ loyalty and subsequent business growth. The purposes of this study are (i) to measure the sales representatives’ satisfaction with various experiences they face within the MLM system, (ii) to identify the main satisfaction factors that synthetically illustrate the sales representatives’ experiences with the MLM system, and (iii) to determine the influence of satisfaction factors with MLM experiences on the intention to recommend the system to other people interested in joining the business. The research was based on a survey among 412 sales representatives of companies that use an MLM system in various fields of activity. The main factors that summarize the experiences that sales representatives have within the MLM systems have been identified by using an exploratory factor analysis (EFA). Further, the satisfaction with these factors was analyzed in relationship with the intention to recommend the system for the development of their individual business. The research results indicate three major experiences of the sales representatives: (i) experiences within the MLM system, (ii) experiences with customer relationships, and (iii) experiences with the product. The results also show that the higher satisfaction with these factors is, the higher the likelihood to recommend the MLM system. This study provides a contribution to the body of knowledge in using experiential marketing for sustainable business development and provides management insights for companies that use MLM systems.

1. Introduction

The multi-level marketing (MLM) system has become important worldwide, being used as a strategic tool to increase profitability and to generate income and jobs for the population [1]. Anyone can join and anyone can benefit from this system, regardless of age, ability, or experience [2]. Nowadays, in order for a business to thrive, it is necessary for companies to break away from the traditional business model and innovate by reinventing their business [3,4]. For this, it is necessary to identify the need for the company’s activities and to eliminate the uncertainties that it has [5], focusing on the process of building a sustainable business model that involves meeting all the company’s objectives: economic, environmental, and social. The innovation is considered to be one of the strongest incentives for a sustainable business, which is market-oriented and creates value for all stakeholders [6]. By using such models, the companies can assure the long-term development of their business activity. In line with these findings, MLM companies have to create value for both customers and sales representatives, which ultimately leads to achieving the goals of companies and society as a whole. For these reasons, an MLM company has to identify and evaluate the satisfaction that the sales representatives have with the system they are part of. Furthermore, companies should implement appropriate experiential marketing strategies to increase sales representatives’ satisfaction and subsequently gain their loyalty.
This study deals with the loyalty of sales representatives to MLM systems, which the authors assume may be influenced by experiential marketing strategies. In this scenario, loyalty can be defined as an attitude characterized by confidence in a company. Based on this confidence, a company can predict the behavior of its agents and customers [7], which should be characterized by the involvement of both parties in fulfilling their commitments [8]. In general, this trustworthy relationship between customers and sales representatives is due to the experience they have with the product and to the interaction with what the company offers [9,10]. This confidence is also important because sales representatives are looking for future partners for their business among customers and are trying to recruit them to develop their own network of agents. Therefore, in order to obtain the loyalty of sales representatives, MLM companies need to maintain continuous relationships with them and provide them with training programs and non-monetary motivations, rather than simply focus on their profit plan [11]. Once this loyalty is achieved, the sales representative will recommend the MLM system to customers, in order to convince them to become part of the sales network in a partnership based on reliability, integrity, and competence [12,13].
All the above could be put into practice by using experiential marketing strategies and techniques, which are designed to create positive and memorable experiences with a product or a business ecosystem [14]. Thus, given the complexity of the agents’ relationship with MLM systems, it is necessary to identify the main components that underlie the emergence of loyalty based on the agents’ experiences with various facets of the MLM system itself. In this regard, the following research objectives have been established:
O1: to measure the sales representatives’ satisfaction with the various experiences they face within the MLM system;
O2: to identify the main factors that synthetically illustrate the sales representatives’ satisfaction with the MLM system;
O3: to determine the influence of satisfaction factors with MLM experiences on the intention to recommend the system to other people interested in joining the business.
The main goal is to identify the incentives for building the sustainability of MLM businesses through the loyalty of sales representatives. As this topic has not been debated in depth in the literature so far, this paper comes to fill this gap by highlighting the importance of experiential marketing actions in increasing satisfaction, which in turn leads to gaining loyalty. The research was conducted in Romania, one of the emerging countries where MLM systems are growing. Finding solutions for their long-term development can contribute to the country’s economic development, and the research results could be replicated for other similar economies.
The paper is structured in six sections: Section 1, which presents the importance of the study; Section 2, which describes the context of the study and the current state of the research field; Section 3, which describes the study methodology; Section 4, which presents the findings of the research; Section 5, which contains the discussion of the results; and Section 6, which contains the main conclusions, implications, limitations and future research directions.

2. Literature Review

2.1. Multi-Level Marketing Systems

MLM systems represent a type of direct selling that involves selling products directly to customers, through personal contact, usually in customers’ homes, their workplaces, or other locations that are not actually points of sale [15]. The buyer, thus, has the opportunity to see and test the product and to have the products delivered directly to their home [16]. On the other hand, for sales representatives, this system brings the advantage not only of making money but also of having their own business and a better life [17]. The sales representatives can earn in this type of system by three methods: selling benefits by themselves, receiving commissions and discounts after selling products, and receiving benefits from the activity in the company of the members they recruited [18]. In other words, sales representatives are rewarded economically with multiple levels of recruitment, with MLM agents becoming an unpaid workforce that not only sells the products of the company but also encourages others to join the company as MLM agents [19]. As with any type of sales, MLM agents must maintain relationships with their customers to add value to the relationship and meet their needs [20,21].
Compared to traditional promotional marketing techniques, such as advertising, the MLM system uses more direct word-of-mouth marketing to sell products and relies on the connections MLM agents have with people they aim to recruit [22]. Regarding the distribution of products in MLM systems, this is done through the sales representatives that are part of the system and the storage that is also being done on their own forces, which are supposed to, “have marginal nonlinear operating costs” [23]. Besides, being a member of an MLM company is tempting for sales representatives because it gives them the opportunity to earn money without investing capital, except for the initial membership fee, if it exists. In a multilevel marketing system, there is no limit to the money that can be generated. As long as the representatives dedicate and persevere in their job, they can earn any income.
Government regulators and other stakeholders see multilevel marketing companies as close to pyramid schemes [24]. However, the sales force is the main tool used by an MLM. This is an important topic of leadership, which is related to the company’s key results, such as sales and productivity [25,26]. The multilevel marketing agent is the main link between the customers and the company they represent. They are not only the person who registers the order, the person who delivers the goods, and the person who takes the money. They must also be constantly aware of the importance of their role, being well-motivated to meet the performance standards required by their position. Therefore, MLM companies try to hire loyal users to become marketers, instead of hiring expensive employees who are not passionate about the product. Multilevel marketing is a system where people are motivated to find more colleagues [27], which is the reason why the number of users and sellers is growing exponentially: everyone is passionate about the product. Given that MLM companies need their agents to sell the company’s products and to recruit new agents to grow the business, it is necessary to give agents the satisfaction and motivation to be successful [28]. Since, regardless of the company’s activity, its success depends not only on all the employees, on their attitude, and on their effort, but also on their behavior [29]. Under these conditions, it can be stated that sales representatives must be adequately trained in personal sales, entrepreneurship, and software skills [30].
The sales representative also receives certain discounts on the purchase of some products. The purchase of products for personal use probably brings some value to the company, but there is no certainty of satisfaction or loyalty from MLM agents. Scholars found that this opportunity was not an incentive for them to decide to collaborate with the MLM company [31]. Thus, it is necessary for MLM companies to make their schemes easier to understand and more transparent for agents, in order to strengthen legitimacy and sustainability and give them confidence [13]. Furthermore, there is a study that states that the agent’s personality is paramount to their performance. The authors consider that personality traits are a combination of five principles, namely: “replicability, comprehensiveness, external correlates, source traits, and multiple levels” [32].

2.2. Relationship between Satisfaction and Loyalty toward the MLM System

The concept of loyalty has begun to be more and more present and valued nowadays, being considered to be a profitable element for companies [33,34]. Previous studies mention that loyalty is closely related to behavior, so loyalty is defined as the behavioral action of customers to repetitively buy products from the same brand [35]. In the current context, confidence and loyalty refer to the agent’s willingness to maintain the relationship with the MLM system, the desire to take risks in the given relationship, and the intention to recommend the system to the possible beneficiaries of the business. In the literature, it is considered that customer confidence develops as an entire process, a process influenced by the way in which sales representatives promote relationships with different actors and develop marketing strategies aimed at achieving high loyalty [36].
Customer satisfaction and the quality of products are the two elements that underlie the emergence of loyalty, the connection between the three being achieved through customer involvement [37,38]. Moreover, the components of the process, value, and communication with customers, along with their involvement and fairness, complete the circle of loyalty [39]. In the literature, customer satisfaction is largely debated. One of the main currents of debate highlights that satisfaction is a confirmation of a customer’s expectations for a product. If the product performance exceeds expectations, then the customer would be satisfied [33].
In MLM systems, the satisfaction of sales representatives becomes more important due to their dual role: buyers and sellers. Thus, satisfaction can determine the desire to buy the product repeatedly, but it is also considered an incentive for their intention to recommend to others the products being offered by the MLM companies [40]. This intention of recommendation, being a component of loyalty [41], not only brings new clients but also helps the agents to develop their own network of agents and also grow their business [42]. In an MLM business, it is highlighted that the satisfaction of the sales representatives brings a greater commitment to the company, with consequences related to increasing the company’s performance and a lower tendency for them to leave the system. It is important to mention that the MLM business thrives on the sales representative’s experience with the customer, but also on the fact that the sales representative can help the customers in two ways: to develop their own business and to offer them products that meet their personal needs [43].
The role of an MLM agent is much greater than can be expected. Regarding the customers or contributors, the agent gives them the information that they need, educates them in the sense that the company wants, and delivers value to them. It is important for the agent to also sell the products to the client and to convey their confidence as well as to design a loyalty program. Regardless of the MLM business field, it will be difficult for the sales representatives to recommend the product if they do not believe in it [44]. The consumption of the product itself determines the agent’s commitment to be part of the sales force, only if they are satisfied with the product.
In an MLM system, the sales representatives have the opportunity to develop their network of agents, and through this aspect, they will realize the development of their own business because the transactions carried out by their own network of agents bring them income [45]. This also means recommending the system and proving the sales representative’s loyalty to the MLM system. Thus, the higher the performance of the sales representatives and their own network of agents is, the greater the satisfaction for the sales representatives. In the literature, it is considered that the satisfaction of the sales representative comes also from more factors than simply consuming the product: the attitude toward the entire MLM system, work environment, colleagues, coordinators, company policy and support provided, remuneration, and customer relationship [11]. Another role of sales representatives is to advertise the MLM company and the products it offers. This form of advertising is called word-of-mouth advertising, as the MLM company does not have to pay for advertising, only for the commissions paid to MLM agents. It is very important that the agent first addresses their family, friends, and acquaintances through verbal support, recommendations, and opinions about the MLM company’s products, following their use [46]. Moreover, in order to develop knowledge and build confidence, it is necessary to establish relationships with local actors [36]. Considering the mentioned aspects, it is necessary to specify that in order for the sales representative to meet these requirements, they must have confidence in the products they sell and in MLM systems, to be satisfied with them, and to become loyal. If the agent trusts the product, then the customer will trust it too. Therefore, MLM businesses and sales representatives should think beyond short-term profitability and invest in customer relationships as equal partners, to encourage mutual trust [13].

2.3. Role of Experiential Marketing in Increasing Satisfaction with MLM Systems

Although it has been argued that experiential marketing is an important driver of customer satisfaction [47,48], research exploring the link with sales agents is scarce. According to Schmitt [49], experiential marketing is a marketing strategy that involves a person’s “emotions and feelings”, by creating positive and memorable experiences in order to provide value to a product. In the present case, the experience is characterized by the interaction of the sales representatives with different aspects of an MLM system, such as the experience with the customers and with the offerings, interactions that include “cognitive evaluations, affective responses, social, and physical or sensorial components” [50].
Even though experiential marketing is usually customer-oriented, a sales representative in MLM systems cannot be considered a simple salesperson. First, they are a customer who buys a product to meet their personal needs. Once they have gained a certain level of confidence in the product, they can be persuaded to further promote the product and become a sales representative in the system. However, to take this step, they should have positive experiences with the product, which confirm their expectations and lead to a high level of satisfaction. In this regard, most experiential marketing research states that emotional and functional characteristics are the main values that matter to customers. In terms of experiential values, in the literature it is specified that functional value influences experiential satisfaction, besides “emotional value, experiential quality and corporate reputation” [51]. Therefore, this type of marketing is achieved through activities that lead to enhanced experiences [49], the benefits of experiential marketing bringing the company improved customer satisfaction, improved brand attitude, brand memory, and customer loyalty [52].
Given all these theoretical aspects, the authors assume that experiential marketing can be an incentive to achieve the satisfaction of sales representatives that ultimately leads to loyalty. This assumption is mainly based on the dual role of sales representatives in the MLM system, who are primarily consumers of the product and secondarily promoters and sellers, in parallel with the development of their own networks of sales representatives. Although not directly related to experiential marketing in MLM systems, several papers offer perspectives on strategies to improve agents’ satisfaction for a positive impact on the organizational outcomes, insights that encourage companies to investigate the factors that might contribute to the enhanced experience and motivation of sales representatives. For instance, stimulating agents to develop skills that might heighten their performance effects, such as customer communication skills, customer service, or sales skills [53,54], can develop positive beliefs and attitudes that lead to enhance the company’s benefits [55]. Moreover, another factor that might influence the overall experience of the agents targets the superiors of the company, who are encouraged to maintain a continuous collaboration and cooperation with them [56]. The theoretical justification for a positive effect of the involvement of managers on a sustainable relationship with the sales representatives is based on the concept of emotional contagion, which results in a “behavioral synchrony” that might be very constructive in communication [57]. In addition, the sales representatives’ experiences with the product increase their motivation to participate in the process and to better perceive the benefits brought by this collaboration.
Taking into account the above mentioned aspects, it is very important for a company to use experiential marketing strategies to bring satisfaction to customers through emotional and functional values, with all of these values being closely related to MLM agents’ feelings, their thinking, and the quality of services they provide to customers [14]. Confidence and commitment in relational and experiential marketing bring certain effects on the relationship of the company or MLM agent with the customers, effects that lead to cooperation, loyalty to the company and brand, performance, and, in some cases, conflicts [58]. Most of the literature provides insights into the positive relationship between the experience and the satisfaction of the sales representatives, which creates the prospects of a sustainable business for long-term success [59], results that can influence the proximal outcomes of the organizational behavior [60].
In conclusion, the findings from the specialty literature highlight a direct relationship between satisfaction and loyalty. The construct of our research starts from the assumption that satisfaction with some specific items, extracted from the literature and the authors’ experience with MLM systems, positively influences the loyalty of sales representatives. The added value of our research consists of the association of satisfaction items with some experiences within the company, which may recommend the use of experiential marketing in employee relationships in a similar way to customer relationships.

3. Materials and Methods

In order to achieve the research objectives, a quantitative method based on a survey was conducted, as this type of research provides more information for decision factors [61]. The survey targeted sales representatives from Romania, who participate in various companies with management systems based on MLM.

3.1. Questionnaire Design and Data Collection

In order to carry out the survey, a questionnaire was used as a research instrument for data collection. The questionnaire was validated in two steps. First, the questions were double-checked for errors and confusing wording. Two experts were also involved in validating the final questions. Second, the questionnaire was pre-tested by five respondents, in order to identify ambiguities or questions without logical meaning. The questions focused on measuring the MLM agents’ attitudes regarding MLM systems and the opportunity to develop a personal business within such a system. In this regard, 10 items were used to measure the satisfaction of agents with various aspects of the MLM system. These items were measured with a five-level numerical scale with equal distance between neighboring levels, from 1 = very dissatisfied to 5 = very satisfied. The items in question were selected from the most important activities of an MLM agent, who does not only want to sell a product but also to build a long-term business. These items were based not only on similar studies presented in the literature but also on the authors’ personal experience within MLM systems. The sample members were asked to evaluate how satisfied they are with the following aspects related to their activity within the system in which they operate: product notoriety; urge to buy the product repeatedly; how the product fits the customers’ needs; accuracy of product information communicated to customers; developing customer communication skills; developing skills to understand customer needs; development of sales skills; cooperation with managers; involvement of managers in business development; and training designed to develop their skills. All these items represent current activities and interactions of sales representatives with MLM companies, but in our approach, these are experiences lived by them, which play a crucial role in agreeing to become a member of an MLM network. In this vision, such activities should be put into practice from the perspective of experiential marketing, not only in order to increase the loyalty of sales representatives but also to achieve the company’s objectives. In view of such an approach, an exploratory factor analysis was computed based on data obtained from the assessment of sales representatives’ satisfaction with the 10 items analyzed. The purpose of this analysis was to summarize the main experiences that a company could deliver to its sales representatives. In terms of loyalty, in order to capture the intentions of recommending the MLM system for the development of the individual network of agents and consequently of one’s own business, a binary scale was used. The respondents with an affirmative answer to this question were considered loyal to the system.
The answers are collected by using the computer-assisted web interviewing (CAWI) method. It involves conducting research using the Internet, by uploading the online questionnaire and having it be completed by the respondent directly in a browser, without the need to install any application or program. Thus, some logistics costs are saved [62]. The respondents were previously contacted and invited to participate in the research. More than 500 invitations were sent, but the rate of answers in the first phase was very low (under 30%). For this reason, the respondents were encouraged to recommend other MLM agents they know, irrespective of the field of activity. Thus, a snowball sampling method was developed to increase the number of respondents and the sample representativeness. Finally, a total of 412 respondents was obtained, who are MLM sales representatives in companies that operate in various fields of activity: cosmetics, nutritional supplements, travel sales, and insurance brokerage. Data were collected in 2019 before the pandemic crisis.

3.2. Data Processing

The resulted data were computed by using IBM SPSS system in order to obtain the relevant information for decision support. Before processing, data were checked for errors. Missing data were not identified and the effect of outliers was excluded, as the scales have a limited number of levels.
The descriptive statistics for every satisfaction item were computed in order “to measure the sales representatives’ satisfaction with various experiences they face within the MLM system (O1)”. In the next step, an exploratory factor analysis (EFA) was computed “to identify the main factors that synthetically illustrate the sales representatives’ satisfaction with the MLM system (O2)”. The consistency of the construct is confirmed by reliability analysis based on Cronbach’s alpha coefficient (α = 0.839) [63]. Finally, three factors were obtained based on the 10 analyzed items, after computing a principal component analysis with varimax rotation. The suitability of data for this method was evaluated by computing Kaiser–Meyer–Olkin (KMO) measure of sampling adequacy and Bartlett’s test of sphericity [64].
In order “to determine the influence of satisfaction factors with MLM experiences on the intention to recommend the system to other people interested in joining the business (O3)”, the sample was divided into two groups: those who intend to recommend the system and those who do not. The statistical significance of the differences between the mean scores obtained for each satisfaction factor at the level of the two groups was tested by the Student’s t-test for independent samples. Additionally, the intensity of satisfaction’s influence on loyalty to the system was analyzed by using the discriminant analysis. This method is used to identify which variables best discriminate between two disjoint groups [65]. The intention to recommend the MLM system in order to develop the business (Yes/No) was assigned as a dependent variable (REC), and the satisfaction factors were set as independent variables: “experiences within the MLM system” (Exp_MLM), “experiences with customer relationships” (Exp_CR), and “experiences with the product” (Exp_PROD). The considered discriminant function is presented below:
REC = β0 + β1 × Exp_MLM + β2 × Exp_CR + β3 × Exp_PROD
The results of these analyses are presented in the next section for every research objective and statistical method used.

4. Results

In this study, the main research issue addressed is the opportunity for MLM companies to rely on experiential marketing to increase and maintain the loyalty of sales representatives, so that they can recommend the system to attract new MLM agents. The research results will be presented below for each research objective.

4.1. Satisfaction Levels with the Experiences That Sales Representatives Have within the MLM System

The first research objective was “to measure the sales representatives’ satisfaction with various experiences they face within the MLM system (O1)”. The calculated means and standard deviations for every satisfaction item are presented in Table 1. We can notice that 9 of the 10 analyzed items scored a mean higher than 4 points, while only 1 item, “Developing customer communication skills”, scored below 4 points on a five-level scale (5 = very satisfied).
The highest levels of satisfaction were obtained by the experiences with the products they use to sell and buy. The lowest scores were obtained by the experiences in developing various personal skills such as communication skills, skills to understand the customer needs, sales skills, or training offered to develop the MLM agents’ skills. However, it should be noted that all these items recorded a fairly high level of satisfaction of about 4 points.
The second research objective was “to identify the main factors that synthetically illustrate the sales representatives’ satisfaction with the MLM system (O2)”. In this respect, an EFA was conducted, using principal component analysis with varimax rotation as an extraction method. The first three components extracted have been considered for further analysis, as their Eigenvalues are higher than 1. Together, they explain 69.071% of the total variance: the first component explains 42.337%, the second explains 14.554%, and the third explains 12.181%. The solution is considered suitable based on the results of the Kaiser–Meyer–Olkin measure of sampling adequacy (KMO) and Bartlett’s test of sphericity, given that KMO > 0.5 and the test returned a p-value < 0.05 (Table 2).
The extracted factors and the items that contribute significantly to every factor according to their loadings are presented in Table 3.
Based on the common significance of the items that contribute to the resulted components, the new satisfaction factors were labeled as follows: Factor 1—“Experiences within the MLM system”, Factor 2—“Experiences with customer relationships”, and Factor 3—“Experiences with the product”. For these factors, we computed new variables in SPSS by calculating the means of the items that contribute to a factor based on the rating scores given by each respondent. The new resulted variables recorded the following mean scores: “Experiences with the product” recorded the highest mean, of 4.57 points (5 = very satisfied); “Experiences within the MLM system” recorded a mean of 4.11 points; and “Experiences with customer relationships” recorded the lowest mean (4.03 points).

4.2. Influence of Satisfaction Factors on the Intention to Recommend the System

The third objective of the research was “to determine the influence of satisfaction factors with MLM experiences on the intention to recommend the system to other people interested in joining the business (O3)”. To reach this objective, the intention to recommend the system was obtained by using a dichotomous variable. According to the answers obtained, 90.5% of the sample members stated that they intend to develop their business within the MLM system by recommending it to attract new sales representatives. This variable was cross-referenced with satisfaction factors, seeking to identify differences in satisfaction between sales representatives who intend to recommend the system and those who do not. The means of the satisfaction factors recorded for each of the two groups are presented in Table 4.
The results reveal higher means for all satisfaction factors at the level of sales representatives who intend to recommend the system, which suggests that the intention to develop a business within the MLM system is influenced by the satisfaction with different experiences in the activity of agents. The statistical significance of these differences was tested with the independent samples Student’s t-test, and the results are presented in Table 4. It can be observed that all differences are statistically significant (p < 0.01).
In order to determine what satisfaction factors better discriminate between the two groups according to the recommendation intention, a discriminant analysis was computed. The dependent variable is the intention to recommend the MLM system (REC), and the independent variables are the satisfaction factors: “Experiences within the MLM system” (Exp_MLM), “Experiences with customer relationships” (Exp_CR), and “Experiences with the product” (Exp_PROD). The results of the stepwise discriminant analysis revealed that all independent variables have a significant influence on the dependent one, according to the ANOVA results (p-value < 0.01 for all variables). The non-standardized coefficients of the discriminant function are shown in Table 5.
According to the above results, the empirical discriminant function is:
REC = −9.970 + 0.764 × Exp_MLM + 0.549 × Exp_CR + 1.009 × Exp_PROD
The positive values of coefficients indicate a direct relationship between satisfaction and the intention to recommend the MLM system. They also reveal that satisfaction with the product has the highest discriminant power, followed by satisfaction with MLM experience and satisfaction with customer experience.

5. Discussion

One of the basic characteristics of MLM systems is the development of the sales representatives’ personal business by attracting new agents interested in working within the system. These agents, in turn, will recruit new agents and contribute to network development as a determinant of business sustainability. The main goal of this study was to examine the satisfaction of sales representatives with the MLM system and their loyalty measured by the intention to recommend the system to other potential sales representatives for the development of individual networks. Building such networks of sales representatives can ensure long-term business growth and the sustainability of the MLM system. The study started from the assumption that the satisfaction of sales representatives depends on the experiences they face in MLM companies and the loyalty of sales representatives depends on their satisfaction with several factors that characterize the system. This assumption was concluded from the specialty literature, which highlights that the experiences of sales representatives with the MLM companies they belong to are extremely important in developing a long-term business, a business that will not only bring profit to the agent but also to the MLM system [13,18,19].
In order to reach the mentioned goal, the first objective of this study was to “measure the sales representatives’ satisfaction with various experiences they face within the MLM system”. The results reveal that the sample members rated high scores for all satisfaction items used in this study. Thus, 9 of the 10 items recorded mean scores higher than 4 points on a five-level scale (5 = very satisfied). The highest levels of satisfaction were achieved through experiences with the products they use to sell and buy. “Product notoriety” recorded the highest score of 4.76 points, followed by the “accuracy of product information communicated to customers” (4.62 points) and “urge to buy the product repeatedly” (4.58 points). The lowest scores were obtained by the experiences in developing various personal skills, such as “developing customer communication skills” (3.92 points), “developing skills to understand customer needs” (4.07 points), “training designed to develop their skills” (4.07 points), and “development of sale skills” (4.10 points). The development of customer communication skills is the only item that recorded a mean score below 4 points. These results confirm some of the findings in the literature, which show that the confidence of sales representatives is determined mainly by their experience with the product as well as by their experience and interaction with the MLM company [9,10,56,57]. Thus, the product is a key issue in long-term business development, and companies should assure a product portfolio that meets the needs of consumers. Moreover, they need to create great product experiences, which can also benefit sales representatives, to confirm their expectations and increase their satisfaction. Similar experiences should be developed for all interactions that a sales representative has within the system and in relation to potential buyers of the product, such as experiences based mainly on communication and training aimed at developing personal skills.
The second objective of the paper was to “identify the main factors that synthetically illustrate the sales representatives’ satisfaction with the MLM system”. The results obtained by using EFA revealed three factors that summarize the satisfaction of sales representatives with the MLM systems. These factors are the result of the different experiences that MLM companies offer to their sales representatives and were labeled as follows: Factor 1—“Experiences within the MLM system”, Factor 2—“Experiences with customer relationships”, and Factor 3—“Experiences with the product”. The third factor “Experiences with the product” recorded the highest mean, of 4.57 points (5 = very satisfied), followed by the factor “Experiences within the MLM system” with a mean of 4.11 points, and the factor “Experiences with customer relationships”, recorded the lowest mean (4.03 points). Thus, it is confirmed once more that the experiences with the product generate the highest satisfaction levels, but the other two factors play an important role in sales representatives’ satisfaction. For decision-makers, the resulting factors open up a wide range of actions designed to provide sales representatives with new and memorable experiences that can lead to a higher level of satisfaction. Under the umbrella of each factor, innovative experiential marketing actions could be designed, implemented, and then evaluated in terms of effectiveness. The third objective of the paper was to “determine the influence of satisfaction factors with MLM experiences on the intention to recommend the system to other people interested in joining the business”. To achieve this objective, a discriminant function was computed by using the discriminant analysis. The positive values recorded by the coefficients of this function indicate a direct relationship between satisfaction and the intention to recommend the MLM system. They also reveal that satisfaction with the product has the highest discriminant power, followed by satisfaction with the experiences within the MLM system and satisfaction with the experiences with customer relationships. This highlights that the more satisfied the sales representative is with the mentioned experiences, the more likely they are to recommend the system to others. It should be noted that it is not enough to obtain high satisfaction scores only for a part of the experiences. According to the values of the function coefficients, a respondent should evaluate all factors with more than 4 points on a five-level scale (1—total dissatisfied, 5—very satisfied) to obtain a positive discriminant score, which is associated with the intention to recommend the MLM system to others. Thus, the research results are consistent with the main train of thought in the literature, which highlights a direct relationship between loyalty and satisfaction [33,34,35,36,37,38,39,40,41,42,43,44,45,46].
Given the above results, first and foremost, the management of companies operating MLM systems should pay close attention to providing sales representatives with memorable product experiences. These could increase the satisfaction and confidence in products that are crucial for the sales process. In addition, good experiences with the system could strengthen the satisfaction of sales representatives and their confidence in the MLM system. In this respect, the relationship with the direct manager, the support obtained from them, training, and other experiences should be very well-organized. Building strong relationships with customers will complement the spectrum of experiences that can lead the sales representatives to continue to work inside the system and to make efforts to develop their own business by establishing new networks of sales representatives. Thus, the management of the company should create a business ecosystem that will help the agents in finding new customers, in communicating with them, and in ensuring the retention of clients. Building strong customer relationships could also help companies to strengthen their resilience after the COVID-19 pandemic crisis, when human interaction suffered, and, as a result, MLM-based businesses were adversely affected. In addition, customer relationships have become more important in light of the threats posed by the impending economic crisis.
In conclusion, the present study highlights that MLM-based companies have to rely on experiential marketing to increase the satisfaction of sales representatives and gain their loyalty and determination to develop sustainable businesses within the system. Moreover, this paper confirms the strong relationship between satisfaction and loyalty that has been specified in the literature [35,40,41,42].

6. Conclusions

Given the results of this paper, the authors consider that it makes a significant contribution to the body of business knowledge, especially for the marketing and management of MLM systems. The novelty of the research consists of the approach of MLM business from the perspective of experiential marketing. Thus, the research results allowed us to emphasize that satisfaction must be taken into account in relation to the experiences of sales representatives. Good experiences can lead to high levels of satisfaction and, further, loyalty to the MLM system can be gained. In addition, both satisfaction and loyalty are significantly influenced by the MLM agent’s experience with the system they belong to, with the products offered, and with the customer relationship. In this respect, we propose a theoretical model of loyalty by offering memorable experiences (Figure 1).
From a theoretical point of view, we can mention that these experiences should be deeply studied and carefully interpreted, due to the interference of several factors that influence both satisfaction and loyalty. However, a better integration of experiential marketing concepts and tools into the science of marketing could provide added value for the development of the theory. This study makes a significant contribution to the literature by highlighting the relationship between the satisfaction of sales representatives and their intentions to recommend the MLM system from the perspective of experiential marketing. These aspects have not been previously studied in the context of using these experiences to increase loyalty and develop sustainable businesses [36], so that they come to complete the theoretical framework of marketing with the importance of using employee-oriented experiential marketing tools and actions. In this sense, by offering good experiences to their employees, companies can create satisfaction and further loyalty to the system. The MLM theory has to highlight the importance of these experiences, mainly due to the dual role of sales representatives in this type of system, who promote and sell product, and are also consumers of these products. Such experiences could contribute to an increasing satisfaction with the products and system and, ultimately, to the loyalty of sales representatives, who will be determined to develop their own business and network of agents within the system.
In terms of practical perspective, the results of the study offer helpful contributions to the sustainable development of MLM systems. They reveal that in order to build a long-term business, sales representatives have to develop their own networks of agents, who in turn have to create other networks. In this respect, the companies that operate MLM systems should gain the loyalty of sales representatives and their confidence in the system by using the techniques of experiential marketing. Given the research results, the experiences with the product have the greatest influence on loyalty. Thus, the companies have to offer high-quality products and to ensure memorable experiences with the product, primarily for sales representatives. In addition to these experiences, companies need to provide sales representatives with a friendly business ecosystem that enhances their experience and job satisfaction. The above actions must be done in close connection with the development of customer relationships, which have become very important both for the system resilience after the pandemic crisis and for avoiding threats generated by the economic crisis, which will have a negative impact on the household incomes. These experiences should be real and accurate. The sales representative will be satisfied if the customer is satisfied, if the product they offer matches the needs of the customers, and if the product information is correct [11,13]. Moreover, the MLM agent wants the offered product to be notorious and to have the characteristic of being bought repeatedly, to be consumable. Otherwise, MLM agents may become dissatisfied, which will have a negative impact on their loyalty. Therefore, using experiential marketing in the relationship between the company and its employees could be a powerful tool for developing long-term sustainable business.
Given the special conditions that the global market will face in the coming period, which will have negative consequences not only on national economies but also on customers, employers, and employees in all fields, the authors consider that the analysis of sales representatives’ satisfaction with various attributes of MLM systems allows decision-makers to focus on those factors that determine loyalty to the system and, therefore, business growth. The results of this analysis should be integrated into the future long-term business development strategies of MLM companies.

Research Limitations and Future Research Directions

The results of this research have some limitations because the research focused on a single geographical area, which determines their interpretation in one context, without the possibility of being extrapolated to another. In this study, sales representatives operating in different types of MLM systems were chosen, and the data collected were analyzed as a single sample. Another limitation of this paper may be the fact that the loyalty of sales representatives was measured using a single dimension: the intention of the agents to recommend the system.
This study does not take into account the effects of an impending possible global economic crisis or the effects of pandemic challenges on developing sales representatives’ loyalty. New quantitative and qualitative research should be considered from the perspective of experiential marketing, to examine the impact of the economic and pandemic crises on the multilevel marketing business.
As a future direction of research, we think it would be very interesting and useful to interview people who have given up this kind of job and ask them why. This future study would lead to the identification of their satisfaction with the MLM system and the reasons for which they left the job. Such findings could help companies to improve the loyalty of their sales representatives.

Author Contributions

Conceptualization, I.-M.P. and C.P.C.; methodology, I.-M.P., C.P.C. and G.B.; software, C.P.C.; validation, I.-M.P., C.P.C. and G.B.; formal analysis, I.-M.P. and C.P.C.; investigation, I.-M.P. and C.P.C.; writing—review and editing, I.-M.P., C.P.C. and A.-M.U.; visualization, I.-M.P., C.P.C., G.B. and A.-M.U.; supervision, I.-M.P., C.P.C., G.B. and A.-M.U. All authors have read and agreed to the published version of the manuscript.

Funding

The research and APC were funded by Transilvania University of Brasov, Romania.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

Data sharing is not applicable to this article.

Conflicts of Interest

The authors declare no conflict of interest.

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Sustainability 14 09507 g001 550
Figure 1. A theoretical model for gaining loyalty through experiential marketing.
Figure 1. A theoretical model for gaining loyalty through experiential marketing.
Sustainability 14 09507 g001
Table
Table 1. Descriptive statistics of satisfaction items.
Table 1. Descriptive statistics of satisfaction items.
Satisfaction ItemsMeanSD
Product notoriety4.75730.54867
Accuracy of product information communicated to customers4.61650.63054
Urge to buy the product repeatedly4.58010.62072
How the product fits the customers’ needs4.33500.90923
Involvement of managers in business development4.15050.86662
Cooperation with managers4.11890.88123
Development of sales skills4.09710.98913
Training designed to develop their skills4.07280.86541
Developing skills to understand customer needs4.06550.96814
Developing customer communication skills3.91500.90957
Table
Table 2. KMO measure and Bartlett’s test.
Table 2. KMO measure and Bartlett’s test.
Kaiser–Meyer–Olkin Measure of Sampling Adequacy0.819
Bartlett’s Test of SphericityApprox. Chi-Square1884.340
df45
Sig.0.000
Table
Table 3. Rotated component matrix a.
Table 3. Rotated component matrix a.
Loadings
Satisfaction ItemsFactor 1Factor 2Factor 3
Product notoriety 0.641
Urge to buy the product repeatedly 0.699
How the product fits the customers’ needs 0.642
Accuracy of product information communicated to customers 0.621
Developing customer communication skills 0.851
Developing skills to understand customer needs 0.820
Development of sales skills 0.851
Cooperation with managers0.869
Involvement of managers in business development0.857
Training designed to develop their skills0.880
Eigenvalues4.2341.4551.218
Percentage of variance explained42.337%14.554%12.181%
a Rotation Method: Varimax with Kaiser Normalization.
Table
Table 4. Differences between satisfaction means depending on recommendation intention.
Table 4. Differences between satisfaction means depending on recommendation intention.
Satisfaction FactorsMean (Std. Dev.)tSig.
YesNo
Experiences within the MLM system4.23 (0.71)2.97 (0.66)10.720.00
Experiences with customer relationships 4.14 (0.73)2.91 (1.09)6.860.00
Experiences with the product4.64 (0.40)3.97 (0.62)6.600.00
Table
Table 5. Canonical discriminant function coefficients.
Table 5. Canonical discriminant function coefficients.
Function 1
Experiences within the MLM system0.764
Experiences with customer relationships 0.549
Experiences with the product1.009
(Constant)−9.970
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Purcaru, I.-M.; Urdea, A.-M.; Constantin, C.P.; Brătucu, G. Building Long-Term Business Sustainability: The Influence of Experiential Marketing on Sales Representatives’ Loyalty to Multi-Level Marketing Systems. Sustainability 2022, 14, 9507. https://doi.org/10.3390/su14159507

AMA Style

Purcaru I-M, Urdea A-M, Constantin CP, Brătucu G. Building Long-Term Business Sustainability: The Influence of Experiential Marketing on Sales Representatives’ Loyalty to Multi-Level Marketing Systems. Sustainability. 2022; 14(15):9507. https://doi.org/10.3390/su14159507

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Purcaru, Ioana-Mădălina, Ana-Maria Urdea, Cristinel Petrişor Constantin, and Gabriel Brătucu. 2022. "Building Long-Term Business Sustainability: The Influence of Experiential Marketing on Sales Representatives’ Loyalty to Multi-Level Marketing Systems" Sustainability 14, no. 15: 9507. https://doi.org/10.3390/su14159507

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