Multi-Level Marketing Strategies and Customer Retention in Nigeria Cosmetics and Beauty Industry

ABSTRACT
The growing competition in the global beauty and cosmetics industry has led many firms to adopt innovative strategies such as Multi-Level Marketing (MLM) to retain customers and expand market reach. However, many Nigerian consumers remain skeptical due to concerns over trust, product quality, and sustainability of MLM schemes. This raises a critical question: Are MLM strategies truly effective in enhancing customer loyalty, satisfaction, and engagement in Nigeria’s competitive beauty and cosmetics market. This study examine the impact of multi-level marketing strategies on customer retention in the cosmetics and beauty industry, focusing on Oriflame customers in Ilorin South, Kwara State. The specific objectives of the study are to: examine the effect of referral marketing on customer loyalty; assess the influence of influencer marketing on customer satisfaction; and evaluate the effect of digital marketing on customer engagement. A descriptive survey research design was adopted, and data were collected using structured questionnaires administered to a sample of 319 respondents, determined through Godden’s (2004) sample size formula. The data were analyzed using both descriptive and inferential statistics, and hypotheses were tested using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS version 4.0. The findings revealed that referral marketing significantly influenced customer loyalty, influencer marketing had a positive and significant impact on customer satisfaction, and digital marketing significantly affected customer engagement, with variations in the strength of influence across the different components. The study concludes that multi-level marketing strategies have significant and positive impacts on customer retention in the cosmetics and beauty industry. It recommends that Oriflame should strengthen its referral programs to enhance loyalty, optimize influencer collaborations with a focus on interactive engagement, and increase investment in high-impact digital strategies such as pay-per-click advertising and social media marketing.