FlexKom Gaining Importance in Turkey

Published: 20 November 2012

» Background

FlexKom Gaining Importance in Turkey

Who today does not have at least one loyalty card in his wallet or gets discounts through various coupons? For a few years now, discounts have been a successful sales tool and are simply now a part of business. Would you have rather made a purchase from online retailers and / or in retail stores if they would have been able to offer you discounts? 


The fact that such discounts can encourage customers to make additional purchases or can better retain new customers is surely not new. According to a KPMG study "Price portals, couponing, social networks – the impact of current online trends on buying behavior" from the year 2011, over 41% of respondents use online discounts. The providers of such coupons focus on customer retention and market penetration through online coupons that can then be redeemed offline or online, but usually only if there is a predetermined number of interested persons on the network. 


However, other common forms of retail marketing, such as loyalty cards, enjoy great popularity. According to a TNS Emnid study, an average of 4.4 cards are hidden in the wallets of every German. The Internet has thus found its entrance in stationary retail. The Turkish e-commerce company FlexKom also knows this and has built up an enormous trading network in Turkey. Compared with most discount providers, however, the company founded by Turkish businessman and network professional Cengiz Ehliz in February 2011 is one step ahead in terms of the business model and customer value. 


If a retailer is a contract partner, a so-called FlexKobi, the customer receives a 5% discount on his purchase in the form of so-called FlexMoneys by using the so-called FlexCard, which the customer is issued from the retailer. If the customer buys online on one of the five FlexKom portals - FlexShop, FlexOutlet, FlexDeal, FlexHoliday or FlexCal - he will also receive the discount. The discounts, i.e. the FlexMoneys, are then transferred to the customer's online account and in turn can then be redeemed at all outlets for the next purchase. The FlexMoneys correspond 1:1 to the respective national currency. 


Unlike most other discount providers on the market, FlexKom focuses on an innovative integration of its discount cards in the retail trade, regardless of whether online in a web shop or offline in a stationary retail store. In addition both forms of trade, FlexKom also vertically permeates all product segments: from the very popular consumer electronics to attractive vacation packages to car rentals. Theoretically, all product segments are conceivable, provided the corresponding individual retailer has joined the FlexKom retailer network. 


There are plenty of good reasons to do so: The real growth multiplier at FlexKom lies in the fact that card-issuing FlexKobi are involved in sales for all customer purchases, regardless of which point of acceptance (=FlexKobi) around the world they are currently shopping at, online or offline. For most retailers, this is attractive additional business. 


Based on the franchise concept idea, for a small franchise license of 350 euros, the FlexKom business partner receives a turnkey concept: the individual retailer is equipped with the FlexCard POS device as well as 1,000 FlexCards, customized to the private brand if desired. The sales potential and the reimbursement for the individual retailer is up to 20% of the given discount - regardless of whether generated online or offline. Since FlexCard holders prefer to shop at FlexCard outlets, the retailer's market and competitive situation is additionally strengthened.   


But what does this mean for the FlexKom sales partner? The FlexKom business model allows this partner to profit both from B2C as well as B2B business. In the first case, he can acquire a finished web shop, including a back office, for a franchise license of 149 euros and thus benefit from direct customer purchases in his online shop. The really big potential, however, lies in the B2B sector: The sales partner attracts individual retailers and earns along with the retailer's customer sales and discounts. 


As a multi-level marketing (MLM) company, FlexKom offers its sales partners (naturally just like any other MLM company) the possibility to profit from the sales of its acquired partners and downline. The sales partner can build his own sales team here and thereby participate in their sales according to the compensation plan. As a means for market expansion, FlexKom sells certain licenses and the sales partner receives corresponding usage rights and involvement in sales. 


The multi-channel approach has made FlexKom into the top achiever in the Turkish direct sales industry. 43,000 sales partners (who put the FlexCard into circulation in Turkey) in eighteen months as well as three million customers and 7,000 points of acceptance - a clear sign for well-above average success and always reason to attract enviers from the reserve. And as is so often the case, rapid growing direct sales companies and all their other forms, such as multi-level marketing, then become the object of sweeping criticism and material for sensational journalism. 

 



Two words that are always heard in connection with MLM or network marketing: "snowball system," sometimes also called "pyramid scheme." And although both terms and their classifications are legally precisely defined in most countries and the World Federation of Direct Selling Association (WFDSA) and its associated country DSAs maintain clear sets of rules, some journalists unintentionally become manipulators of public opinion and fact falsifiers. Completely with the core code of neutral and objective research, stories are written about direct sales and MLM companies in which some essential information is withheld or lumped together, even though the explanation of the detail, particularly in the networking industry, decides between black and white, legal or illegal. Relationships are ignored and complex issues are shortened or distorted. The perfect weapons of manipulation are emotional, scandalized reports and pointed texts that are planted so subtly in the public opinion. 


Everything that is not mainstream, everything that is different, is under attack. It requires no philosophical knowledge to know that it is no different with and in the networking industry. This industry therefore inevitably has to do without quality journalism. 


FlexKom is thus not the first and also not the last company that has been subjected to nonobjective reporting. It would be wrong, however, to anticipate that the reader's opinion is automatically and helplessly at the mercy of the indoctrination and brainwashing. Over 90 million independent workers who earn their living with the help of referral marketing as a part-time or full-time job speak for themselves. Due to the promising business model and a retailer network that is already functioning in Turkey, the company appears to be receiving inflow from other networking companies. And as is so often the case, the success seems to be a thorn in the side of various competitors. FlexKom, however, has thus far been able to successfully hold its ground against all odds and various regulatory inspections. According to their own information, the debt-free company has set the goal of building up 200,000,000 consumers in 40 countries with a sales volume of 120 billion euros. 


The ambitious plans of FlexKom will be observed with suspicion by competitors and media resources will even be used for defamation. But FlexKom was still able to prevail here and has already successfully implemented legal means here. Turkey has already developed into one of the most attractive markets for direct sales in the past few years. In 2011, the industry broke open the billion mark in Turkey for the first time and so was able to qualify for the so-called "Billion Dollar Club" of the World Federation of Direct Selling Association (WFDSA). Against this background, the WFDSA in cooperation with the Direct Selling Association of Turkey organized a conference in October 2011 under the motto "East Meets West." Experts from governments, consumer organizations, academia and the direct sales industry from Europe, Central Asia, the Near and Middle East and North Africa attended the conference. In addition to the Turkish Milliyet and Sirketce, OBTAINER WORLDWIDE also acted as an official media partner. Although the Turkish DSA was already founded in 1994 and legal frameworks regulate the industry, the Turkish press seems to have little knowledge of this, because they repeatedly invalidate legal business concepts through irrelevant reporting and thus the intentionally caused appearance of illegality. This not only hurts FlexKom, but much more the entire industry in Turkey. 


This criticism therefore does not typify the entire (media) business. Forbes recently published an industry analysis, taking into account the structural contexts and elements of multi-level marketing. The fact that multi-level marketing has already become lecture material at certain universities does not surprise anyone who knows the industry. And the fact that referrals are plainly the most effective marketing tool has been known to MLM companies for a long while, because the entire industry builds on this principle. At least it is 150 billion US dollars worth. 


Popular journalistic text, as it currently appears against FlexKom in a Turkish tabloid, only exposes poor journalism, if you can even call it such. Knowledge of the specific characteristics of direct sales and multi-level marketing is required to be able to provide sufficient starting points for a qualitative report. 


However, this does no harm to FlexKom: It is impossible to miss the fact that there is a great demand for loyalty cards and / or discounts. This is not least reflected in the thousands of FlexCard acceptance points. The demand for discounts or loyalty and retailer benefits does not need to be awakened, it is already there. Get some self evidence and take a look into your wallet: Are you one of them?