Great Expectations: The Role of Disclaimer Specificity, Source, and Claim Explicitness in Impacting MLM Distributor Earnings and Costs Estimates

Abstract Based on the need to understand how consumers process, evaluate, and respond to (MLM) multilevel marketers’ social media marketing efforts, the authors investigate how variations in earnings claim disclaimer specificity (none (control) vs. earnings-only vs. earnings-plus-cost), claim type (implicit vs. explicit), and source (distributor vs. company), in a social media post impact consumers’ earnings and cost expectations. Findings indicate that consumers exposed to a disclaimer that featured either earnings-only or earnings-plus-cost information reported significantly lower expected earnings and likelihood of earnings compared to consumers exposed to a post with no disclaimer. Increased disclaimer specificity was effective at reducing consumers’ expected earnings when exposed to explicit claims and was also effective at reducing consumers’ perceived odds of earning 6 K or more per year when exposed to a post from a company source. Policy and theoretical implications are discussed.