The Big Problem with Income Claim Marketing

By Maggie Patterson

All opinions in this post are my opinions and mine alone.

You can view our full disclaimer here.

I make six figures and you can too. I’ll teach you how to be a seven figure business owner using my proven method. We’ve all heard the income claims being used by celebrity entrepreneurs over and over and over again. In this episode we’re diving into what you, as a consumer, need to know about income claim marketing.

When you work in the online business world, there’s no escaping the constant stream of income claims being used to market and sell to you. It’s been going on as long as I’ve been in this industry, and the claims are just getting more outlandish as time goes on.

For example, when I arrived back in 2013, it was all about having a six figure business, but then that wasn’t enough and the goal posts have moved to building a seven figure, or million dollar plus business. And recently, I’ve seen multiple claims by people running eight figure ones and talking about how they can teach you to do that too.

Those claims keep growing as more and more people make the claims, and they need to up the ante to get your attention. But what are we even doing that we’re so focused on the pursuit of making money that we’re falling for this?

Here’s the thing. Most business owners in this space aren’t hitting the six figure mark, so it’s creating an ever-increasing goal that most people are going to fall short of ever reaching.  And that’s good for the people trying to sell this crap to us.

What is Income Claim Marketing?

Income claim marketing is a practice where how much money someone has made is used as a way to sell their product or service. Typically, that offer is to teach you to build your business using their methods and make that same amount of income.

The term income claim marketing was one I first heard used in reference to MLMs. The Federal Trade Commission (FTC) has issued warnings to many MLMs related to the claims made about how much money you can make. According to MLM lawyer Kevin Thompson, in recent years, the FTC has “expounded upon its definition of income claims to include lifestyle claims or claims that included statements, pictures or other general references to large homes, vehicles, vacations and an overall lavish lifestyle.”

The first time I heard the term income claim marketing applied to online business was by Nathalie Lussier from Access Ally in 2017. Since then, I’ve watched the income claims become more and more over the top and in the context of social change and a global pandemic, it’s become increasingly problematic.

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The Lure of Income Claim Marketing

On the surface, income claim marketing may not seem like that much of an issue. Afterall, it’s become so natural, so normalized in the online business world, that we may not even realize it’s happening.

I know for me, when I first arrived in the online business world I found it refreshing that people were talking about money. As a business owner, I found these conversations appealing as I really didn’t have any frame of reference for how my business was really doing, or what was financially possible.

That’s where we get hooked. We’re suddenly drawn into a world that seems exciting and different. Where conversations about money are not just normal, but encouraged.

Many of us are taught from a young age that money is a private affair, and it’s not something you really talk about. A 2018 study from Capital Group found that “people are more comfortable talking about marriage problems, mental illness, drug addiction, race, sex, politics and religion than they are about money”.

In North America, money talk is seen as taboo, resulting in silence around money. An article by Joe Pinsker published in the Atlantic outlines why people do or don’t talk about money, and much of it comes down to class, race or circumstance. For those in the middle class, they often are silent when they’re facing economic precarity. For the Black community who experience a wealth gap of 1 to 10 with white Americans, the taboo is lower.

From talking about how much someone made with their last launch to how they hit a big milestone to showing that you can trust them because they make so much money, in the online business world money talk is constantly there.

As the taboo around money is broken, we gain a certain sense of freedom and possibility.

On one hand, I’m very much in favor of normalizing conversations around money, especially for women and non-binary people, as well as marginalized folks.

However, there’s a dark side where the money talk only serves to reinforce the failings of our current system. As alluring as it is, we need to proceed with caution and recognize that not everything is as it seems.

How Income Claim Marketing Screws Us Over

From my perspective, income claim marketing is one of the most toxic practices in this industry as it’s screwing us over on multiple fronts.

For starters, income claim marketing reinforces capitalist power structures. When we constantly focus on how much money people are making, we naturally start to sort people based on that. We view money as a measure of a person’s worth over their inherent worth as a fellow human.

The result is that we listen to online business owners based on how much they claim to make, not on the merit of their ideas or their character. We exalt people making seven or eight figures even when they’re downright shitty humans.

On top of that, there’s been an increased push to do business ethically, and on social justice. Yet, I see many of the business owners who claim to have their values rooted in these things engaging in income claim marketing. At best, this is incongruent and at worst, it’s shady as hell.

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Spoiler: The Online Business Game is Rigged Against Us

At the very heart of income claim marketing is the belief that we can’t market or sell our offers without it. Telling your potential customers that you make six or seven figures is a way to shortcut gaining our trust.

This has been a go-to tactic since the inception of the industry. Sharing how much money your business makes is seen as a way to assert your authority and reinforce the idea that “if I did it, you can too”.

The only problem is that we can’t necessarily do it too. Especially when very rarely are any of the unearned privileges from whiteness to wealth are ever disclosed.

Many times these income claims are fabricated, exaggerated or embellished as a way to make it that much more enticing.

The game is literally rigged against us.

We’ve had to learn the hard way that more often than not that the celebrity entrepreneurs making these claims are the only ones getting richer.

Multiple times per week I hear stories of people being sold into coaching programs and courses that make big income-based promises and fail to deliver. Where people barely scraping by are pressured and manipulated into spending money they simply don’t have. They’re told they’re worth it, and that they need to play big to make their dreams happen.

Making the Sale
at All Costs

The name of the game is to make the sale at all costs. A number of tactics are commonly employed to handle objections and break people down so they say yes.

For example, with many coaching programs, the price isn’t even displayed on the sales page. If you’re interested, to get the price, you need to book a phone call.
On that call, you’ll meet with a sales coach whose job it is to get you to say yes using high pressure tactics, from a “discount” if you immediately join, to asking you to commit and provide credit card information over the phone.

Over the years, I’ve had a glimpse into what the behind-the-scenes of these calls look like. From scripts that encourage you to insult the prospective customer, to encouraging people to apply for an additional credit card to make the purchase, to coaching them to borrow money, to offering financing options, to offering to split the payment across multiple cards.

While the tactics used on these calls may shift and evolve, the goal is always the same, which is to convince the buyer that they need to invest at all costs, and then to figure out how they can pay for it.

From my point of view, if anyone is coaching you on how to pay for what they’re selling, that’s a warning that should be heeded.

A recent article in the Guardian detailed multiple instances of people being exploited during the pandemic, including one instance where a UK-based lawyer, Lucy Wheeler, was contacted by more than 20 people trying to get out of a contract with the same business coach.

As Wheeler explained in the article, “They were getting next to no benefit or coaching. For some, the monthly instalments were more than their mortgage payments. Those involved were putting the payments on credit cards, or had borrowed money from the family, and many were hiding the escalating debt from their husbands.”

This story isn’t an isolated incident. The use of income claim marketing combined with the relentless message that you must invest at all costs is resulting in thousands of people being ripped off by celebrity entrepreneurs.

They’re sold into coaching, programs, and masterminds with the promise of not just making back their investment, but being able to quickly make six, or even seven figures.

Ultimately, when those promises fail to materialize people find themselves broken. They may be dealing with significant debt after spending money they simply didn’t have as well as the emotional fallout.

In the rare instance that people ask for refunds, or challenge the coach or creator that they purchased from, they’re told that the reason they’ve not been successful is their attitude or mindset. As there’s no professional standards or oversight in this industry, there’s very little accountability for what celebrity entrepreneurs may say or do.

If this has happened to you, I want you to know it’s not your fault. Trust me when I say that you’re not alone in this. While I firmly believe we all need to become better consumers if we’re going to work in this space, we need to understand that many times the status quo of online business is rigged against us.

Six and Seven Figure Success is Arbitrary

Speaking of failure, I regularly speak to fellow online business owners who feel like they’re failing as they’re not hitting the six figure mark.

The truth is that despite the hype, the percentage of businesses in this industry hitting the $100,000 per year mark is relatively small.

For example, the 2018 State of Women Owned Business Study from American Express, found that 88% of women owned businesses earned less than $100,000 in revenue. While this study goes beyond online business, it illustrates how the $100,000 a year goal is not aligned with the reality.

While the $100k  success metrics is incredibly common, it’s completely arbitrary. It’s marketing driven, and completely loses sight of the fact that the majority of Americans aren’t making anything close to $100,000 a year.

In the fourth quarter of 2020, the US Bureau of Labor Statistics reported the median wage as $51, 168 per year.

While I do believe there can be considerable financial upside to being your own boss, we need to stop buying into the BS dream of a six or seven figure business. We each need to determine our own measures of success instead of letting celebrity entrepreneurs dictate them to us.

Buyer Beware:

Income Claim Marketing is a Trap

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As I write this, I don’t have all the answers, but I do know that as consumers we’ve got choices.

We can choose to continue to do business with people who use their income claims to drive their marketing and sales, or we can see that for the red flag it is.

It’s important to note here that I’m not here to shame anyone for talking about money, far from it. For me, it’s a matter of motivation and of context.

Are they using it as a way to show off their fabulous lifestyle so you’re buying into the dream? Are they showing you the possibility so you can buy their thing that tells you how to get it too?

If so, I’d take the time to thoroughly vet that individual, as anyone teaching you how to make more money based on how much money they make is suspect. If they’re relying that heavily on the lifestyle and living the dream, versus actual substance, you may find yourself duped and in debt after you buy.

I also recognize for some of you that people talking about how much money they make is a possibility model. It’s aspirational. I’m not here to kill your dreams, but to encourage you to think carefully about what you really and truly want.

Before I entered this industry I was extremely content with how much money I was making, and exceeding any expectations I had for myself. While this industry helped me see a different path ahead for my business, it also started to brainwash me into thinking making more money would drastically improve, well, everything.

It’s taken me years to untether myself from the seven figure business dream and to settle into something that feels right for me. That’s a small, simple and sustainable business where I enjoy what I do. It’s a comfortable, but not fancy life. And yes, it’s getting a great deal on anything we do buy, because why pay more?

I also want to recognize that as someone with an immense amount of privilege, that choice is a luxury. Your reality may be very different, and I want to honor that.

My point here is that you should design it for yourself.

Finally, as a business owner,  you can commit to not using income claim marketing in your business. I know it may feel necessary, but it’s not. There are so many other, proven ways to build trust with potential customers.

In recent years, I’ve ceased talking about how much money I make as I don’t believe it’s at all helpful to anyone. The conditions of my “success” are unique, and without 86 disclaimers and a full profit and loss, it would be misleading and incomplete.

Now, when I’m marketing and selling masterminds, I don’t make any claims about how much money people will make if they work with me. The first version of my mastermind was called Double It, and it was focused on helping people double their income. While many people did, not everyone did, so it wasn’t sitting right with me.

Removing that claim from my marketing hasn’t impacted my sales, and in many ways I believe it’s helped as I’m attracting people who aren’t just interested in making more money for the hell of it. They’re focused and committed to what they’re doing, and they may make more money as a result of strategic choices they make, not because I have a guaranteed system.

I share all of this to show you that your business can be successful on your terms without sacrificing yourself on the altar of income claim marketing.

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