Vemma

So I recently got persuaded to join Vemma, an energy drink company that uses word of mouth to sell its products instead of using traditional retailers like grocery stores and gas stations. At first glance it appears to be a pyramid scheme, and though I still have my doubts, it's hard to believe that it could be when I know so many people making money off of it. But that's not really the point of my blog. My question is, as a selling strategy, to purely use word of mouth, to create a sales force only out of people who use the product and love the product and want other people to use the product; it's genius really. I'm wondering how effective of a strategy this could be for other companies in the future, and what kinds of industries it would work in. The way Vemma works is you sign up and order two cases of the product. Your goal is to 1) get more people to purchase the product and 2) if they are interested in making money get them to sign up to sell the product as well, which requires them to purchase the product. My friend who got me signed up is really smart about the way he gets people interested. He brings a Verve energy drink with him to class and drinks it. Easy enough. Since it's not a product you find in stores, people ask him about it. He tells them briefly what it is and asks if they want one; he keeps extra in his backpack. Then after class he talks to them about the program and invites them to one of their team meetings (there are a lot of people on his campus selling Vemma, so they have an entire team of people helping each other out). This company is turning thousands and thousands of people into marketers. It reminds me of what a visiting executive speaker said: Everyone is a seller. At some point or other in your life you will sell something, whether it's a product or a skill of your own. So back to my original point. How far can this word of mouth, everyday citizen seller strategy go? Does it work for any product? Is it limited to consumables? I think it would be interesting, and difficult, to analyze the possibilities. I also wonder though, if it is sustainable. For example, if you think of this in terms of a product life cycle, or just a simple line graph, is there a peak number of people they can get to join and sell, and if so then doesn't that put a cap on their sales? What will the company do when sign up growth starts to slow down, or when current members start to fall away as they graduate and get jobs and start families and don't have the time to sell the product or sign people up? I'm curious to know if this word of mouth sales strategy is sustainable in the long term or if they will have to eventually go the route of all other energy drinks and start selling at retailers. I think that discussing alternative selling strategies like this in class would be beneficial; I think it's naive to never discuss out of the box concepts and ways we as marketers can redefine how business is done. I don't just want to talk about how things are done now and how they were done then; I want to come up with new ways to do things and see if they work.