The Rise and Fall of the Narconon Internet Marketing Empire (Part 2)

If you missed the beginning of this series, see Part 1.

Narconon is a unique entity in terms of internet marketing because they focused so much energy on the internet in the early days and were very successful at it. They really beat most other rehab facilities to the punch. A primary reason for this is because the local marketing strategies (outlined in Part 1 of this series) didn’t work too well for them. They simply had to reach out nationally in order to survive and expand. Within local communities, Narconon referrals struggled. However, with the internet, anyone with basic computer knowledge and a website could now generate business at a national level. Narconon was one of the first drug and alcohol rehab facilities to really capitalize on this.

At first, Narconon began to build websites. Other treatment centers were slow to do this as they were generally doing OK locally. It was basically unheard of for a local residential drug and alcohol facility to even think about flying in clients nationally. Why? Because local treatment facilities were connected to local recovery resources and considered themselves to be just a piece of the greater recovery picture. In other words, their clients attended support group meetings locally, got a sponsor, and continued their recovery in the same area they started in. Local treatment centers considered themselves a part of a larger recovery community. Some referred clients to their outpatient programs and the clients went home, others were referred to local halfway houses, and others simply continued to attend AA meetings at the local treatment facility. It’s almost like asking a hospital why they don’t focus on having clients fly in for medical treatment for minor injuries and illnesses, such as broken bones or the flu. They wouldn’t think about it at all. All the resources a patient would have access to are and should be local.

Again, Narconon was really one of the first rehabs that focused so much energy on nationwide clients, not only because they desperately needed clients, but also because they didn’t look at themselves as a “part of the local recovery community”. When a client finishes Narconon, he or she is done. There is no aftercare, with the exception of possible entry into a Church of Scientology. No meetings, no therapists to refer to, no halfway houses or outpatient treatment. Narconon has shown an overall disdain for anything that isn’t Scientology. So websites got built, and Narconon began to grow.

Competition-wise, they had an advantage. Narconon sales staff weren’t restricted by the truth and could say just about anything to get clients in the door. Many people who had tried traditional programs and failed were drawn to its inflated claims of 70-90% success. But families had nowhere to validate these claims. In addition, Narconon was antagonistic towards 12-step principles of long term attendance to meetings and having to be labeled an “alcoholic or addict for life”. Many clients liked the idea of a magic bullet. If Narconon spoke to a client on the phone, it wasn’t that difficult to sell someone their “cure”. They offered something unique. No more meetings, no more aftercare… a cure. Many families sold their life savings for such a chance. And if people failed and didn’t become successful, Narconon had no worries about local reputation being damaged. If a client flew into Narconon from North Dakota, completed the program and then returned home and failed, it didn’t damage Narconon’s reputation in any way. If a client saw unethical practices occurring at Narconon, he or she had no one to complain to. Narconon was completely unaccountable to anyone other than the Association for Better Living and Education (ABLE), Narconon International, and/or the Church of Scientology.

Local treatment centers always had the local community to keep them in check. If there were problems with their center and it became known locally, they were sunk. So, communities kept local treatment facilities in check, but Narconon had no such worries. Flying in clients kept them unaccountable.

FSMs, and a Narconon Website on every Corner
Around the turn of the century, Narconon did something rather unique in the industry. Because generating referrals from clinical professionals in traditional pathways worked so poorly, and most professionals cannot accept referral fees, Narconon created a referral payment strategy that focused not on professionals, but on clients, churches of Scientology, and other Scientologists. In other words, the FSM, or Field Staff Member, was born. Essentially anyone and, more often, every graduate of the Narconon program was offered and encouraged to make money by referring clients to Narconon. Generally these referral payments were a standard 10%. For a $15k-$20k program, these referral fees could be up to $2000 per placed client. As program prices increased, so did referral payments.

Considering that traditional drug rehab facilities generated many of their referrals from doctors, therapists and hospitals, they would never consider paying referral fees. It isn’t illegal for the rehab itself to pay referral fees (except in Florida), however, it is illegal or unethical for a doctor, therapist, or medical professional to receive referral fees. And since most referrals to a traditional drug rehab come from this group, it was essentially impossible to consider.  Narconon bypassed this by focusing on the groups that were outside of the medical and therapeutic field… their own clients.

As Narconon grew, they generated more graduates, all of whom were potential sources of referrals. Out of hundreds of Narconon graduates per year, some of these had a good understanding of the newly evolving internet and website industry. And some left Narconon and plugged away at the keyboard. Narconon even had instructions for graduates on how to build a website, and how to position the site to increase website rank and phone calls.

Although this is oversimplifying things, prior to 2003 whichever website had the greatest number of keywords on a site or page got the highest ranking for that keyword in search engines. In other words, if you wanted your website to generate high rankings you could do what was referred to as “keyword stuffing”. Want to rank highly for “drug rehab”? Create a website that mentions “drug rehab” several dozen times per page. Want to focus on “Drug Rehab Ohio”? Buy a URL named “www.drugrehabohio.com” and fill it with the phrase “drug rehab Ohio” a couple dozen times and you were number 1 on the rankings.

Around the turn of the century the golden age of the Narconon FSM really took off. All told, there were dozens and dozens of graduates churning out websites. Approximately 20 FSMs were very successful during this period and owned anywhere from 10-50 websites, all generating calls and leads.

From a business model, Narconon began to really take notice of the incredible work that their FSMs were doing. However, it was also costly to pay them. Here is the financial breakdown:

  • For a Narconon to be licensed, it has to pay 10% back to ABLE/Narconon International.
  • Standard FSM fees are an additional 10%.
  • Registrars, or in house salespeople, generally made 1-2% of sales.
  • SDE (Senior Directors of Expansion), or sales managers, made 1% of gross sales.

So, if we take a $30,000 Narconon program, before the client even sits down in withdraw/detox, if it’s a referral from an FSM, over 20%, $6900.00 in fact, is gone, leaving only $23,100 in revenues. This is a huge chunk of money. Narconons, always focused on Gross Income, decided that they would replicate what the FSMs were doing and create their own referral sites to save approximately 10% that they would normally pay out. And so they did, and, of course, they only referred people to their own facility. In many cases, new graduates were hired at $50 per week, a training wage, and then were told to develop and write new websites. Outside SEO consultants were charging several thousand dollars per month for what Narconon could have its cheap labor pool do for mere hundreds of dollars.

And this is when what is referred to as the Narconon Fake Referral sites really took off. In the early 2000s, there were literally thousands of Narconon based sites. Some were owned and operated by Narconons, others were FSMs. At the time, if you did a Google search for any type of drug rehab, over 50% of resulting searches were probably a Narconon, FSM or affiliate.

What is a “Fake Referral Site”?
A “fake referral site” isn’t actually a fake site. It is a website that is designed to appear to be run by an unbiased or impartial source who refers clients to treatment. The use of the term “fake” refers to the appearance of being impartial when it is not, and in actuality, only refers clients to itself. Narconon isn’t alone in fake referral sites such as these, but has pretty much dominated the market.

Currently the government has a website and phone number and will help to refer clients that are looking for substance abuse or mental health treatment. Its location is http://www.samhsa.gov.

There are three primary types of “fake” referral sites that are out there:

Specific Keyword-based Sites:
These are small (50-200 pages) sites that focus primarily on a specific keyword segment that someone might be searching for. In other words, a site might focus on all the variations of the phrase “Heroin Detox”, including “Heroin Abuse Detox”, “Detox for Heroin”, Drug Rehab for Heroin Detox”, and similar terms. Or they might focus on only one particular state. Other common focuses are “non 12-step rehab”, or “long term rehab”, “luxury rehab”, etc.
Large Scale City-based Sites:
These sites are large (1000-5000 pages). Essentially their goal is to create pages focusing on every city in the United States and every variation of something someone would search for on that city. In other words, it includes pages such as “Drug rehab in Canton, New Jersey”, “Drug Rehab in Newark, New Jersey”, “Alcohol Rehab in Canton, New Jersey”.
Large Scale Directory Sites:
These sites are enormous (2000-20000 pages). Essentially these sites are very similar to the “Large Scale City-based Sites” as they do focus on every city, but they do something else. When the user clicks on a particular city, it will actually return a list of the various substance abuse related services, therapists and rehabs within that city. You can then click on any of the various agencies, therapists or services for more info. It will then have a page dedicated to that agency. However, the phone number listed for the particular agency or therapist isn’t actually their phone number. It is the phone number of the referral site and/or rehab that set up the fake referral site. These sites list thousands of different services within a specific area but the phone number always refers only to the rehab that created this site.

Now, the reason that Narconon dominates the fake referral website space is because most traditional rehabs have no need to hide their name and would consider it quite unethical to hide under another name and then refer to themselves. In addition, most traditional rehabs do not have referral payment systems in place as Narconon does. Because Narconon had such a policy, many outside people actually created these referral sites and it was discovered that they were a successful marketing approach. Traditional treatment centers had no outside independent people who would go to work creating sites such as these.

Narconon’s fake referral sites have actually created some interesting ethical dilemmas for them. At least an independent FSM could somewhat claim to be impartial. However, now these FSM fake sites were often run by Narconon itself. On occasion, a Narconon staff member would answer the FSM line, but use a different name, so as not to be confused with the name they used when they were a registrar. And families were usually unaware that the “unbiased” referral line was actually ringing into a Narconon building.

Narconon and the internet were the bestest of friends.

And then Google changed everything at the end of 2003.

Read Part 3 of
The Rise and Fall of the Narconon Internet Marketing Empire.

M e m o s

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  1. From the Desk of...
    Bradley Greenwood

    I am exceedingly grateful for your labors, and consider these documents to be gifts!