Arbonne Urban Myth? The Results Approach Caused Arbonne’s Unprecedented Promotions – Really?

There are many urban myths about Arbonne and here is another one that we find most curious:

The introduction of the Results Approach in 2005 was the catalyst that propelled the company to its unprecedented growth and the field to unprecedented promotion levels from 2005 to 2007.

We have examined this comment before in our post “Arbonne Urban Myth? The Results Approach Caused Arbonne’s Unprecedented Growth – Really?” In this post we want to focus on the reference to “unprecedented promotion levels from 2005 to 2007″ in the field.

I apologize for the length of this post, but it will take some time to unravel this web.

It is true that there was explosive growth in 2005 when the Results Approach became popular. However, as we explained in the “Arbonne Urban Myth? The Results Approach Caused Arbonne’s Unprecedented Growth – Really?” there was already explosive growth in Arbonne prior to the introduction of the Results Approach. Along with this explosive growth came an increase in promotions. All this using non-Results Approach Business Building Systems.

So the comment that “there was an increase in promotions in the field” is true, but in light of the fact that there was already an increase in promotion prior to the Results Approach the increase they refer to cannot be soley attributed to the Results Approach. There was an increase during this time that can be attributed to the Results Approach but this increase had more to do with how quickly Consultants promoted. In some cases Consultants were getting to RVP in 3 to 4 months and NVP in 6 to 8 months. And if the proponents of the Results Approach are going to take credit for the increased speed of the promotions, they also have to take responsibility for the increased speed of the fall out that followed as a result. What do we mean by “fall out”?

Group Presentation Business Building System:

In a non-Results Approach System success is obtained as more and more clients are added to a Consultant’s network. As these clients consume the product a percentage of them return to reorder. When they do, the volume from the reorders is added to the volume of new sales in the network.

In addition success is also obtained by adding business builders to the network. This process duplicates a Consultant’s efforts as she gets paid on a percentage of the volume generated by the business builders in her network.

My wife has been in Arbonne for over 14 years. The data we have collected and analyzed over that time period indicates that what we call the “reorder rate frequency” repeats on approximately a quarterly basis. This makes sense as some products are purchased monthly while other last three, four and even six months. The graph below shows the residual income generated from a quarterly reorder rate frequency.

As you can see if a Consultant works consistently and adds new clients to the network each month, as the reorders kick in, the volume will increase accordingly. Because promotions to the next level are connected to volume, promotions naturally follow the frequency rate of this quarterly cycle. There are only two ways to speed this up:

1. Increase the quantity of new sales that are added to the network each month.
2. Increase the quantity of business builders to the network to duplicates one’s efforts and thus increase volume.

This process of building a network of consumers who return and reorder is a very powerful way to build a very stable network. However, although both #1 & #2 above will accelerate the growth of the network, it is important to recognize that these are still connected to the residual income quarterly frequency rate cycle which determines the speed at which a Consultant can promote to the next management levels.

Results Approach Business Building System:

On the other hand the Results Approach utilizes Results Kits which are purchased by Consultants or Business Builders and this process creates upfront volume. Because this volume is generated by another Consultant, it is by definition “potential consumable volume” and not “actual consumable volume”. The volume created by Result Kits only becomes “actual consumable volume” when it is sold to a client and this client starts to consume the product. This consumption is the only way to create reorders and through this residual income. So as long as the Result Kits are held by a Consultant as a business builder aid, they are not within the residual income quarterly frequency rate cycle.

So lets compare the two processes.

The Group Presentation System:

1. I start the business and hold 10 presentation and average $500 per presentation for a total of $5,000.
2. I continue this process each month and add $5,000 in new sales to the network.
3. In the fourth month those clients in my network that purchased product the first month come back and place a reorder. We have set this reorder rate at 80% or $4,000.
4. As a result of new sales and #3 above the total volume for the fourth month is $9,000.
5. I continue this process of adding new business builders each month until the seventh month.
6. In the seventh month I do $5,000 in new salses. In addition those who ordered in the fourth month come back and reorder. But in addition to the clients that started in the fourth month, the clients that started the first month reorder again as well. So $5,000 in new sales plus $4,000 in reorders from the clients who started the first month and $4,000 from the clients who started the fourth month for a total of $13,000 in volume.

The above is a very powerful and stable way to build an Arbonne business because it is based on a network of consumers. The only way to increase the above is to have more group presentations or add more business builders.

The Results Approach System:

1. The first month I find four others to purchase $2,500 in Results Approach Kits. This will total $10,000 in volume.
2. The second month the four Consultants from the first month each find four Consultants for a total of 16 Consultants times $2,500 creates $40,000 in volume.

The above puts the Consultant into first step RVP in the second month. If they keep this going they will complete RVP in the third month. This all looks good on paper but the details reveal a weakness in inherent in this process.

There are two weaknesses built into the Results Approach process as outlined above.

1. The Mathematics of Weakness: The first is this volume is processing downward in the network so quickly that it will soon pass out of the pay range of the top consultant. I call this the Mathematics of Weakness in a Results Approach Network.
2. The Failure Rate of Results Approach: The second is the failure rate. Our research indicates that there is a 50% to 80% failure rate for those networks that process mainly as a Results Approach Network. This mean, without consumers to reorder and create residual income this process will stall out. As different areas of the network stall out there is a corresponding draw back of volume in the network.

The Mathematics of Weakness Detailed Out:

Get Four Business Builders:……………………. 4 X $2,500  =       $10,000 (Level #1)
They Each Get Four Business Builders:……. 16 X $2,500  =       $40,000 (Level #2)
They Each Get Four Business Builders:……. 64 X $2,500  =    $160,000 (Level #3)
They Each Get Four Business Builders:….. 256 X $2,500  =    $640,000 (Level #4)

The following is what this looks like as a network.

The first month:

The second month:

The third month:

The fourth month:

Now to be clear, the above is a perfect scenario and the odds of it working this way are almost impossible. But I am doing this to keep the calculations simple so that you can see what happens as this system plays out.

In the Arbonne Policies and Procedures Manual the Compensation plan lays out how a Consultant is paid on the volume in her network. A Consultant can get paid up to three levels deep on the volume in her District, Area and Region. He/she can get paid up to six levels deep on volume in her Nation.

In the Results Approach Training it is emphasized that a Consultant needs to get four (4), who each get four (16), who each get four (64), ad infinitum. As each generation is added it also adds a level of depth in the network. As this scenario plays out the business builders will pass out of the top Consultant’s pay range and as they do there will be a corresponding draw back in compensation even though volume in the network continues to grow.

The following shows Results Approach Mathematics of Weakness Draw Back:

• 1st Month 4% on $10,000*65% = $260 (paid as Consultant)
• 2nd Month 8% on 40,000*65% = $2,080 (paid as District Manager)
• 3rd Month 14% on $160,000*65% = $3,120 (paid as Area Manager)
• 4th Month 17% on $640,000*65% = $13,120 (paid as Region)

But STOP there! The above calculation for the fourth month is not correct. You see you only get paid three deep on District, Area and Region levels. But the volume from the fourth month in the example we gave is all in the fourth level. As a result the top Consultant that started this process will get paid 0% on this volume. She will only get paid on the residual volume in levels one, two and three. This will cause a draw back in a network that process like this with large upfront Results Approach orders. As the volume draws back there is a corresponding draw back in compensation.

This is why Consultants who build their network with large orders, can get to RVP in 3 to 6 months but then eventually their override checks drop back to what an Area Manager earns who is doing Group Presentations.

This is what I term FALSE VOLUME! It looks good for a while, but not all the volume from this process of large upfront orders will be consumed by a client. And whatever is not consumed will not be part of the reorders. As a result, until the Result Kits are sold to a client all this volume stands outside the residual income reorder rate frequency.

I remember talking to a Consultant on the Arbonne Sponsored trip to the Mexican Riviera. She had been brought into Arbonne with the Results Approach with large upfront orders. She sponsored her daughter and her daughter built the same way. Their goal was to get her daughter to Region so she would have a car and income so she could do missionary work. The only problem was six months after her daughter got to Region her checks were so small she couldn’t afford her car anymore. As I went through The Mathematics of Weakness and the Failure Rate with her, with tears in her eyes she said, “I did it wrong didn’t I?!”

The truth is she didn’t, those who sponsored her and sold her this false system did it wrong. It was her sponsor who was holding the full ethical load for this failure.

The Failure Rate of Results Approach Detailed Out:

All the volume from Results Kits is “potential consumable volume”. And it remains so until the Result Kits are sold. And our research indicates that this never happens in 100% of the cases. There is a percentage that will fail and this failure rate runs from 50 to 80% in the networks we have evaluated that process as a Results Approach network. So lets take the low end of 50% failure rate and see what this detail does to the network.

Going back to the network we detailed earlier it processed as:

• I get four = 4
• Those four get four = 16
• Those 16 get four = 64

But here is how it really works:

• I get 4 = 4 (but 50% of these fail)
• Those 2 get 4 = 8 (but 50% of these fail)
• Those 4 get 4 = 16 (but 50% of these fail)
• Those 8 get 4 = 32 (but 50% of these fail)

So the network never grows by the exponential factor of four. On top of that those who fail in this system are holding approximately 10 Result kits they need to get rid of. So if you take the failure in the system of 2 the first month and four the second month and 8 the third month and 16 the fourth month this is a total of 2+4+8+16 or 30. Then multiply this by the 10 Result Kits they are holding and this totals 300 Result Kits stagnant in the network. And our research indicates, in addition to selling these on E-bay or sending them back under the cover of the 45 day money back guarantee, these Result Kits also get resold within the existing network which impacts reorders and thus residual income which in turn adds to the draw back in the network.

The Real Intangible:

But beyond the impact the Mathematics of Weakness and the Failure Rate have on the network there is another issue that has an even bigger impact, but is less tangible. The awareness in the network that there are those who cannot move their kits begins to erode confidence the business itself and the company of Arbonne as well. If a Consultant knows of those who cannot move the Kits, do they really feel good about convincing others to payout $2,500 for Result Kits? This is the true unseen force that has the greatest impact on stalling the momentum in the system.

Conclusion:

So long before the Results Approach was even an idea, Arbonne was experiencing unprecedented promotions. And although the Results Approach may have added to this, the main contribution of the Results Approach was the speed of promotions. On the down side the Results Approach was also responsible for the resulting down turn and fall out these networks experienced.

So the real question is this; if the Results Approach can promote faster but can also create faster fall out, is it really even worth the price of admission?

So in light of the above our conclusion is “The Results Approach was the cause of Arbonne’s unprecedented promotions” is not true and is an Arbonne Urban Myth!

© copyright 2009 VoiceWind & Greg Loveless

© 2009, VoiceWind. . .Greg Loveless. All rights reserved.

Related posts:

1. Arbonne Urban Myth? The Results Approach Caused Arbonne’s Unprecedented Growth – Really?
2. Summary and Conclusion – Arbonne Results Approach Analysis
3. Welcome to VoiceWind
4. Arbonne Results Approach is Fast Track Because of the Failure Volume
5. The Mathematics of Weakness in the Arbonne Results Approach