Category Archives: Ethics

Twisted Customer Service

Posted by on May 12, 2011 No comments

Background:

Building a business in network marketing, with the right company, and the right product, has little downside to it except for one — it is vulnerable to a business builder in the network moving to another company. To complicate the issue further and make things worse, they may even try to take part of the network with them. The purpose of this article is to analyze this process and then provide ethical guidelines for this type of situation.

The Tactic:

Here is one recent tactic used by one up start network marketing company. As a note, although it should be obvious, this company is not a member of the DSA.

  1. The consultant decides to leave company “A” and move to company “B”.
  2. The consultant contacts via phone and/or email each of the clients and consultants in their downline in company “A”.
  3. The consultant informs each client and consultant in company “A” that if they need anything regarding product, etc. from company “A” they should contact the consultant’s immediate Upline consultant in company “A”.
  4. The consultant explains this is necessary because they will no longer be servicing them.
  5. This last comment raises the curiosity of the consultant/client who naturally asks “Why?”.
  6. The consultant then explains they are no longer with company “A” but they are now with company “B”.

Twisted Customer Service:

At first glance this may appear to be good customer service. But in reality it is actually extremely unethical. Here’s why.

This type of communication is what I call “Twisted Customer Service”. The consultant is not really calling the customer to give customer service. She calls the customer, and while pretending to offer customer service actually has an ulterior motive which is to inform the customer she is no longer with company “A” but is now with company “B”. She “twist” the customer service in a completely different direction.

In some cases the communication is not nearly this subtle. I have seen consultants in one company send out emails, not just to their downline, or those they knew before they started working with company “A”, but to every single email they have collected while in company “A”. This includes downline, sideline and upline consultants and clients. And, like the example above, the email had all their contact information, and all the information about the new company.

Imagine that. It would be no different than if a consultant, rather than send an email, called every one and told them the following:

“I am no longer with company “A”. I am now with company “B”. Here is what company “B” is about and by the way if you need anything here is my contact information.”

Unethical? You bet it is. So how do they justify this?

Business and Relationship:

Some see no issue with the above practice because they believe anyone they had a relationship with prior to joining company “A” is fair game and there is nothing unethical about recruiting them into the new company. They believe the relationship they have with each person takes precedence over the business aspect of the relationship.

The problem with this line of thought is it does not take into account everything that contributed to building the existing network. It may be true, that the network was built with persons the consultant had a relationship with, whether friends or family, prior to learning of company “A”. However, the network was also built based on the reputation of company "A", company "A's" products, along with any training and assistance that was given by this consultant’s sponsor and upline team in company "A".

Thus the prior relationship is only one of several factors that led them to become a part of the network in company “A”. Likewise it would be only one of several factors that would contribute to their choice to join company “B”. So it is no longer possible to extract the other aspects of the relationships. Thus it is not possible for the consultant to communicate with anyone in company “A’s” network, about matters of business, whether they are family or friends, in any capacity other than a representative of company “A”.

That’s because the moment a consultant makes the decision to leave company “A”, and move to company “B”, they stand outside company “A”. Any contact with any client or consultant in company “A”, for any purpose whatsoever means she is actually acting as an agent of company “B”. To use the resources of company “A”, for the purposes of company “B” is a violation of the DSA code of ethics. It is unethical.

For some this will not make sense. After all, they will argue that “I have a relationship with many of those in company “A’s” database”. So they justify contacting them about leaving company “A” and/or joining company “B”. But what they miss is this; it is not the relationship between a consultant and those in the network they talk to that determines the nature of the conversation. Rather, it is the content of the conversation that determines the conversation.

Since the consultant is no longer with company “A” any conversation regarding anything to do with the company “A” or company “B”, by definition makes it a business conversation, not a relational conversation. In light of this, since the consultant has already decided to leave company “A”, any of communication that is business related, is unethical.

The above “mix of relationships” in network marketing is why most companies I know of have some form of policy against cross sponsoring. There are two main reasons for this.

  1. It is unethical to use the resources of one company, in this case a database of people, to benefit another company.

  2. Moving an entire network of people has a negative impact on the income of those in the upline.

The Proper Ethical Response:

So what would be the proper ethical way to handle this type of situation where a consultant moves from company “A” to company “B”? Simple, the Consultant should call their Upline Consultant in company “A”, inform them they have decided to move to company “B” and have their upline consultant in company “A” service their clients.

It’s that simple. This not only provides the client with customer service but does so without introducing company “B” to them. This is ethical and is in accordance with the DSA (Direct Selling Association).

Rob Peter to Pay Paul:

It should also be understood that every client or consultant who is convinced to move from company “A” to company “B” has a negative impact on the income of the upline in company “A”. This is another compelling reason for a consultant who moves to another company to cease all communications with those in the previous company’s database. Their goal should be to reduce as much as possible any impact on their upline’s income. Sending out a notification similar to those mentioned above has the exact opposite effect.

But let’s be honest, this is exactly why they do it. It has nothing whatsoever to do with customer service. It has everything to do with “them”. It’s all about what will benefit them and their income. But this fails to take into account this fact: while cross sponsoring people from company “A” to company “B” to increase their income, there is also a corresponding direct negative impact on their upline’s income in company “A”. And with each act of cross sponsoring, the consultant increases their unethical load in the network.

Notify the Parent Company of the Decision to Leave:

There is one more issue, related to moving to another company that needs to be addressed. Once a consultant makes the decision to move to company “A”, their very first act should be a call to the headquarters of company “A” to inform them that they are now with company “B”, so all compensation checks from company “A” should cease immediately. Every check a consultant takes from company “A” after they have made the decision to become a consultant with company “B”, is an unethical act. These funds are taken under false pretenses and any funds that are taken under false pretenses are a form of stealing if not our right fraud.

Treacherous Business Partner:

It's possible a consultant could be ignorant of these ethical issues. Or it could that they are fully aware of the issues but chose to act unethically anyway. Either way it does not really matter because neither type of person will make for a successful business relationship. Why would you want to be in business with someone who can justify such obvious unethical behavior? Not to mention be associated with a company that allowed this type of unethical behavior in their organization.

So the moment someone engages in this type of behavior is the moment you need to eliminate them for any type of business relationship. But not only this person, you should also steer clear of the company that allows such behavior as well.

After all, if they can rationalize this type of behavior, when it is to their advantage, what other unethical behavior would they participate in when it is to their advantage? If they have no problem taking clients and consultants from company “A” to company “B”, they will likewise have no problem taking people from company “B” to the next company that comes along. This is no way to build a stable business, a stable income and consequently it is no way to build a true plan "B" into a plan "A".

© 2011, VoiceWind. . .Greg Loveless. All rights reserved.

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VoiceWind.net Welcomes New Readers from Arbonne

Posted by on February 7, 2010 No comments

Even though we have hundreds if not thousands of readers every week, whenever possible VoiceWind.net likes to welcome and acknowledge new readers to our site when we become aware of them.

So we want to welcome the Arbone home office to a long list of thousands of readers.

© 2010, VoiceWind. . .Greg Loveless. All rights reserved.

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Arbonne Results Approach Alters Business Building Ethic

Posted by on January 19, 2010 No comments

 Sequence Ethics:
The sequence in which events unfold impacts the ethics of those events. The impact is on the ethical load the events create and the impact these have on the individuals connected to the events.

An example of how a shift in event sequence shifts ethical load is the simple process of purchasing something at a local store verses online. In the traditional process a customer goes to the store, visually inspects the product, they may even test the product before purchase. The customer then takes the product to the cashier and in exchange for payment the customer is allowed to walk out of the store with the item.

Because the sequence of payment and receipt of the product is simultaneous, the risk to the customer is limited. As a result the ethical load in the event, and on those connected to the event is also limited.

But shift this sequence and/or delay an event in the sequence, and the ethical load shifts.

When a customer purchases product over the internet, there is a delay between the payment and the receipt of the product. This shift in the sequence shifts the risk and thus the ethical load. The product may never be shipped. The product may not be what was advertised. The product may not work as the customer thought it would.

So in order to address the increased risk, additional safe guards are built into an online ordering system to deal with the shift in ethical load caused by the shift of event sequence.

Using this as a guide, lets apply this to the ethics of building an Arbonne business.

Ethics of the Arbonne Traditional Business Building Sequence:
In the Arbonne traditional business building systems of Group Presentations and One-on-Ones, as a new Consultant does presentations the Sponsor receives a commission of these sales. The Sponsor is only compensated when the new Consultant is successful. 

The sequence of events in this process is so important to the "Culture of Arbonne" that during Arbonne Opportunity Presentations, in EOA stories, in Blogs and in published trainings, Consultants often use the following quote:

"We become successful when we make you successful."

This statement is directly connected to the ethical sequencing of events in the Group Presentation and One-on-One systems. Only as the new Consultant has success selling product is her Sponsor compensated. Thus the sequence of events in Arbonne's traditional business building system not only makes this an accurate statement, but substatiates the truth of the ethic.

Arbonne Results Approach Sequence Shift, Althers Ethic:
In the Arbonne Results Approach a new Consultant purchases Result Kits. These Kits are then dropped off to potential clients and business builders so they can use the product. At first glance this simple change in the process would appear to be insignificant. But a closer look reveals it drastically shifts the ethical load.

 

Arbonne's Traditional Business Building System
Group Presentations & One-on-Ones
Green Arrow Green Arrow Green Arrow Green Arrow
Sponsor signs up new Consultant for $109. New Consultant books Presentations New Consultant holds Presentations Sponsor & New Consultant become successful & both earn income.
This chart shows the traditional business building process where the Sponsor signs up the new Consultant, helps him/her book and hold the presentations. Only after the Sponsor helps the new Consultant through steps one, two and three and the new Consultant becomes successful, is Sponsor compensated.

 

Arbonne's Results Business Building System
Results Approach
Orange Arrow Red Arrow Green Arrow
Sponsor signs up new Consultant for $109 plus Result Kits. Sponsor gets paid on income from Result Kits. New Consultant books Presentations New Consultant holds Presentations New Consultant becomes successful & earns income from sales.

This chart shows how the purchase of Result Kits at sign-up allows the Sponsor to be compensated before the new Consultant is successful. This shift in sequence causes a delay between sign-up (red arrow) and the success of the new Consultant (green arrow). This shift and subsequent delay shifts the ethical load. What fills this void in this delay?

 

Results Approach Training:
The following is taken from a Results Approach training:

  1. Sign Up:  $109 U.S. Consultant Registration Fee
  2. Place Order: Personal Product & Business Tools (2, 4, 6 or 8 kits)
  3. Set Up Auto Ship: Minimum $150 RV/QV For Active Status

Notice that Step #2 has both "Personal" & "Business Tools" in the order. That is because in order for a new Consultant to start her business using the Results Approach, she must purchase Result Kits. Since Result Kits are comprised of RE9 sets the Result Kits have retail volume attached to them. So at the moment these Result Kits are purchased by the new Consultant, the Sponsor is paid on this volume just as if they had been sold to a client.

An even greater issue is the Sponsor gets paid on the volume from these Result Kits even if the new Consultant can never move the kits or create volume sales them. So this "simple" shift in sequence" changes everything.

This shift is similar to what happens in the shopping example above. When the time span between payment and the delivery of the product shifts creating a delay, this also shifts the risk and the ethical load. As a result additional procedures are implemented to provide legal safe guards and realign the risk and thus the ethical load.

Ethical Shift Impacts "Ends" Verses "Means to an End":
In Arbonne's traditional system, because the Sponsor is only compensated as the new Consultant becomes successful, this forces the Sponsor to treat the new Consultant as an "ends in themselves".

But in the Results Approach, because the compensation comes before the new Consultant is successful, this shift in sequence allows the Sponsor to treat the new Consultant as a "means to an end".

As Immanuel Kant wrote:

"Act in such a way that you treat humanity, whether in your own person or in the person of any other, always at the same time as an end and never merely as a means to an end." (Kant, Immanuel; translated by James W. Ellington [1785] (1993). Grounding for the Metaphysics of Morals 3rd ed.. Hackett. pp. 30. ISBN 0-87220-166-x.) 

Safe Guards to Close the Ethical Void in the Results Approach:
In the store example above, when there is a change or a delay in the sequences and it increases the risk in the system, additional safe guards must be implemented to keep the process ethical. The same is true with the shift in sequences in the Results Approach. The delay in the sequence opens a void in the Results Approach that can shift events from ethical to unethical. As a result, safe guards must be implemented to close this void in order to keep the Results Approach ethical.

What safe guards would close this void?

  1. 45 Day Money Back Guarantee
  2. Buy back Result Kits (this is recommended by the DSA)
  3. Result Kits Testers that are business building aids (this removes the retail volume from the Kits)

Let’s examine each of these.

45 Day Money Back Guarantee:
Some Sponsors actually attempt to use the 45 Day Money Back Guarantee to reduce the risk to the new Consultant. They tell new Consultants that if they cannot move the product within 45 days they can return it to Arbonne. The 45 Day Money Back Guarantee was intended to eliminate the risk to the consumer who was ordering online and receiving their product days later. If the product caused a reaction, this policy allows the customer a full refund. It was never intended to be used by Consultants to reduce their risk of building the business. To use the 45 Day Money Back Guarantee in this way is unethical. Thus this is not a viable solution.

Buy back Result Kits (this is recommended by the DSA):
Another way to resolve this risk is for the Sponsor to offer to buy back the Result Kits if the new Consultant cannot sell them or generate sells with them. But this creates such a huge upfront financial exposure to the Sponsor that it makes building the business via the Results Approach too risky. As a result, those Consultants who use the Results Approach withhold this option which is very interesting. If the Results Approach is as good a business building system as the proponents claim it is, then they should not hesitate to offer this. The reason they don't is because it would be too difficult to sign up new Consultants if they are exposed for the total dollar amount of the Result Kits.

An interesting fact about the buy back is, the DSA recommends this procedure to prevent pyramid scheme and protect prospects from this risk. Why? Because the buy back process places the Sponsor at risk rather than the new Consultant. As a result the Sponsor will be less inclined to push the new Consultant into purchasing product that according to the averages cannot be moved. See my posts on this topic at:

  1. The Ethical Dilemma Caused by the Arbonne Results Approach
  2. Options to Make the Arbonne Results Approach Ethically Viable
  3. Ethical & Unethical Use of the Arbonne Results Approach

Result Kits Testers that are business building aids (this removes the retail volume from the Kits):
The final option is the only ethically viable one. To offer Result Kits that have no retail volume attached to them. This way when a new Consultant is signed up and places their personal and business tool order, the Sponsor would not be compensated at that moment in time. The Sponsor would only be compensated when the kits are sold to clients or clients order their own product.

This would eliminate the temptation for Sponsors to have their new Consultants front load. With no retail volume attached to the Result Approach Testers, there is no compensation, and thus no incentive to push Result Kits.

In addition to the above, the elimination of compensation also takes away the incentive to treat New Consultants as a means to an end (retail volume) rather than as an ends in themselves (a potential business builder the Sponsor will be paid on as the Sponsor trains the new Consultant to be successful).

Unlike the DSA's buy back procedure, the "Testers", rather than being a safety fall back procedure, totally elimnates the possibility of up front loading. Here, for the first time those who use the Results Approach could say, "we become successful, when we make you successful" and this would be a true and accurate statement 100% of the time. Only here can the Results Approach treat all as an Ends rather than a Means to an End. In this the Results Approach is finally ethically pure.  

 

© 2010, VoiceWind. . .Greg Loveless. All rights reserved.

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Arbonne Chapter 11 Impacts Business Builder Recruiting Ethic

Posted by on December 1, 2009 No comments

The Arbonne Opportunity Presentation states that those considering being an Arbonne business builder should do their due diligence. Part of that due diligence is checking out the stability of the company. In the past Consultants who shared the Arbonne business handled this in various ways with the three most common being:

  1. In the ancient days Consultants stated that Arbonne was debt free. This fact eliminated a significant amount of financial risk.
  2. When this ended Consultants would list the years Arbonne had been in business. In addition they stated Arbonne was a financially solid company.
  3. When Harvest Partners took over Consultants would refer to Harvest Partner's financial stability.

But all this ended with the current financial difficulties Arbonne is facing as they go through a "Reorganization" or what is legally termed a "Chapter 11".

So in light of the current situation how does a Consultant handle the issue of due diligence as it pertains to Arbonne's financial stability?

There is an Ally Bank TV Commercial where an adult asks a young girl if she would like a pony. She says yes. He takes a toy pony out of his pocket and gives it to her. She says thank you. He then asks the next young girl if she wants a pony. She says yes. He calls to a pony and a real life pony comes walking out. The first girl says, "You didn't say we could have a real one." The adult says, "You didn't ask!" The announcer then says, "Even kids know its not right to hold out on somebody."

The same is true when a Consultant shares the Arbonne Business Opportunity knowing Arbonne's current financial difficulties. To withhold information from a person that could alter their decision contains the same ethical load as lying to them. By withholding this information you prevent the potential business builder from knowing all the risks.

Now there is nothing wrong with risk. All businesses carry some risk. But risk, in order to be ethical, must be known by the person taking the risk. Even if I think it is worth the risk, this does not justify the ethic when someone else is making the decision for themselves and their family. The only way to justify the ethic is to give the full information to the person making the decision.

So the question is, "What is the risk to join Arbonne?" The answer, to be honest is, none of the Consultants in the field really know what the true risks are because none of them have seen the books. All the field hears is what they hear from Arbonne Corporate. So is that enough to satisfy due diligence?

When I was the Director of an IT department I would regularly receive calls from head hunters who were looking to fill a position that my skills set matched. If I was interested I would take the information the head hunter provided about the position and the company.

But my due diligence never stopped there. I never took a head hunter's word when it came to the financial stability of a company because there was a conflict of interest. The head hunter had a vested interest in making that company look as good as possible in order to get me to say yes, because my yes benefited them.

The same is true with Arbonne. Arbonne Corporate has a conflict because they have a vested interest and are naturally going to put the best possible spin on things to paint the brightest picture. And any one who is already a Consultant in Arbonne, who is building a business, also has a conflict of interest because they want what Arbonne Corporate is saying to be true and to work out because they have time and treasure invested in the process.

So in light of this what does an Arbonne Consultant who is sharing the Arbonne business need to do to meet the ethics of full disclosure? The following provides full disclosure and is the only ethical way to share the Arbonne business in the current environment.

  1. State that Arbonne has been in business for over 30 years.
  2. State that Arbonne is still a leader in the industry.
  3. State that Arbonne is currently going through a financial reorganization.
  4. To be accurate make sure to use the terms "financial restructuring through Chapter 11 Bankruptcy".
  5. State that no Consultant has seen the books, and there has been no independent audit published.
  6. And, in the Arbonne spirit, encourage them to do their own due diligence before they make a decision.

Any less than the above does not fulfill the ethical requirement for full disclosure of risk.

Once Arbonne files the articles of bankruptcy in US Court, this would give final proof that there is an agreement with the creditors as a Chapter 11 Bankruptcy can only be filed if the creditors are in agreement with the restructuring. So once there is an announcement that the papers have been filed with the court, this confirms the stability of Arbonne. Then it takes 45 to 60 days to complete the process. Once the process is complete, Consultants would no longer have to state #3, #4 & #5 listed above.  

What if you are on the other end of the conversation? What are you to do if you are being recruited by an Arbonne Consultant to do the business during this time of transition? Ultimately it is up to each individual. But there is one fact to keep in mind. You must know all the risk to weigh all the risk. So my advice is — Rah, Rah does not replace due diligence. Only facts provide due diligence.

See my updated post on Arbonne Restructuring through Chapter 11 Bankruptcy at: Arbonne Chapter 11 Bankruptcy & Restructuring Links.

See all posts on Arbonne Restructuring through Chapter 11 Bankruptcy at: www.voicewind.net/category/arbonne/arbonne-bankruptcy-arbonne/

© 2009 – 2010, VoiceWind. . .Greg Loveless. All rights reserved.

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Options to Make the Arbonne Results Approach Ethically Viable

Posted by on October 23, 2009 No comments

There are several methods that would make the Results Approach ethically viable. However, analysis of these options reveal that they fall into the following categories.

  1. The first option is for Arbonne Corporate to issue a directive. But this is only viable in a standard corporate environment. Because in a corporate environment, the representative who is in direct contact with the public, can be controlled by company directives. But this method is not viable in an MLM enviornment like Arbonne where the Consultant is by Federal Law an Independent Business entity. In these cases specific direction could be a violation of this independent consultant relationship. As a result any option that could only be enforced by corporate fiat is not workable in the case of Arbonne.
  2. The second option falls into the category of the slippery slop. In these cases a recommendation is provided by the Arbonne Corporate that would keep the Arbonne Results Approach within the ethical guidelines such as only 2 or 3 Results Approach Kits are allowed. This would then reduce the large upfront orders that result in front loading and then push the network over the pyramid scheme tipping point. However, due to Arbonne Corporates inability to enforce this limit without violating the Independent Consultant relationship this option is not workable.
  3. The third options is the use of sample packs in conjunction with the Results Approach Kits. This is one option that Arbonne Corporate attempted to implement. For details visit the Arbonne University Results Approach Training. But enforcement of this once again runs into the conflicts between Arbonne Corporate directing an Independent Consultant. To be absolutely open and honest about this, and with all due respect to Arbonne Corporate, this strategy was less a solution to the ethical issues the Results Approach inflicted upon the Arbonne field and appears to be more of a basic CYA for Arbonne Corporate. This strategy, through legalese,  created a wall of protection around Arbonne Corporate while at the same time it left those in the field totally funerable to the very same ethic from which Arbonne Corporate had protected itself. In essence, the field had been left to swim with the sharks.
  4. A fourth option would be for Arbonne Corporate to force the Sponsoring Consultant to buy back any Result Approach Kits that are not sold. This would bring even those Consultant’s networks that use large upfront Results Approach orders in line with the standards as set out by the DSA web site. But Arbonne Corporate would once again be on shaky ground when it came to enforcing this on an Independent Consultant. Not to mention there would be a lot of “he said, she said” and no one wins in these situations which would ultimately leave Arbonne exposed. And this does not address the issue of Kits that are compromised.
  5. A fifth option would be for Arbonne Corporate itself to buy back the Kits. But this would only provide greater incentive to those Consultants who were pushing the unethical boundaries with the Result Approach Kits to push them even farther. After all, if you have a sugar daddy who is going to pick up the tab if those you sponsor cannot move the Result Approach Kits, why worry about whether the prospect can actually move the kits. Do the hard sale and move on to the next. Can anyone say Fannie May and Freddie Mac.
  6. The sixth option would be to leave the Results Approach System in tact but this allows a consumable product with retail volume to be purchased as a business aid which allows the upline Consultant to benefit monetarily from this volume. So to prevent Consultants from returning any Results Approach Kits that are purchased in large quantities to Arbonne, or to prevent these Result Approach Kits from appearing on E-bay,  each Result Approach Kit would have to be tagged with a unique ID so it could be traced back to the source. This option is not feasible because it is cost prohibitive.

Our Recommendation that Creates an Ethic Proof Results Approach System:

The only viable option would be for Arbonne to provide Consultants with testers that have a 3 to 7 day supply and are self contained. This solution has the following advantages:

  1. It eliminates the potential contamination that the full size systems are susceptible to.
  2. It does not require a directive or edict from Arbonne Corporate thus protecting the legal separation between Arbonne Corporate and the Independent Consultant’s business.
  3. It would eliminate the need for Arbonne to dance the ethical line by on the one hand supporting the Results Approach System (Trainings, etc.) and on the other hand recommending that Consultants:
    • Use sample packs in conjunction with the Results Approach Kits (which they cannot enforce)
    • That the Consultants are responsible for any contamination to the Results Approach Kits (which again they cannot enforce)
    • Try to prevent front loading by questioning those who order large quantities of RE9 Systems (which again they cannot enforce)
  4. It would allow Arbonne Corporate to categorize these testers as a business aids. This is important because items that are classified as Business Aids have no retail volume attached to them. Consequently this would take away the incentive to up-line Consultants to push large upfront orders so they could receive monetary compensation on Results Approach Kits.

All posts regarding the Arbonne Results Approach Analysis

© copyright 2009 VoiceWind & Greg Loveless

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

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Ethical & Unethical Use of the Arbonne Results Approach

Posted by on October 23, 2009 No comments

In light of the previous post Arbonne Results Approach is Fast Track Because of the Failure Volume it is obvious that the increase in volume in a Results Approach Network, as compared to the volume in a Group Presentation Network, comes from the volume in the large upfront orders because the upline gets paid on this volume whether or not those in her downline can move the Results Kits and convert that volume from potential to actual consumable volume. And because there is a 50% to 80 % failure rate, a large portion of this additional volume in the Results Approach Network comes from the failure in the system.

Large Upfront Orders Make the Arbonne Results Approach Unethical:

In light of this everyone has to ask themselves this question. Do I want to build an Arbonne business with a system that will produce more revenue, when all or most of this additional revenue is generated by the failure in the system?

This is not an incidental consequence. These facts change everything. When data indicates that the additional revenue is generated by the failure in the system, a decision to use the Results Approach System as opposed to any other system ceases to be a business strategy decision. Rather, it is now an ethical decision and, in light of this data there is really only one correct answer. The data we have uncovered would indicates that there is an ethical way to build an Arbonne business using the Results Approach, but a Results Approach System which includes large upfront orders is not included in this ethic.

If you disagree, before you respond remember what John C. Maxwell says about ethics.

“There is no such thing as business ethics. Just ethics! Those who use one ethic for family, another ethic for their spiritual life and another ethic for business will always get into trouble. There are not different types of ethics. There is just ethics.”

Ethical Use of the Results Approach:

I mentioned at the beginning of this article that Linda has Consultants in her organization who do the Results Approach and are successful. If what I have just laid out is true, how can that be and why would Linda allow it; how could she ethically allow it? It has to do with balance and quantity. Those Consultants in Linda’s network who are building a successful business and use the Results Approach use it as a supplemental to the Group or One-on-One Presentations. If someone cannot get to the presentation then a Results drop off is used or they do the Results with certain people. This causes two main differences:

  1. They are not building their network with large up front orders so there is no false volume in the network.
  2. They are creating a network of consumers and the Results Approach is just another method to accomplish that.

This is why the Consultants in Linda’s network who are using the Results Approach are successful. Most use it as a supplemental to the Groups Presentation System. As a Result, the percentage of Potential Consumable Volume in their network is minimal or zero and as a result they have taken the risk of the “Potential Consumable Volume”, the “Pyramid Tipping Point” and the “Mathematics of Weakness” out of their networks all by eliminating large upfront orders. In so doing they have also altered the ethic.

All posts regarding the Arbonne Results Approach Analysis

© copyright 2009 VoiceWind & Greg Loveless

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

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The Ethical Dilemma Caused by the Arbonne Results Approach

Posted by on October 21, 2009 No comments

Content of the Results Approach Training:

Use of Arbonne's Results Approach creates ethical issues that are not present in the One-on-One and Group Presentations. What are these ethical issues? I will outline them by taking information directly from Results Approach Trainings. The Basics of the Training:

  1. “You sign up and commit to a $2,500 order each month.”
  2. “You think of four others who would do the same.”
  3. ad infinitum
  4. After you get the Kits “You figure out a way to move them.”(The information in quotations is taken verbatim from the training.)

First, notice that both #1 and #2 above are “potential” not actual. At the time of purchase your volume is all potential except for the portion that is for personal use. In addition to that the list “you are to think of” is potential as well. Do you know for sure that those you think of will actually do the business with a $2,500 commitment? No good business person would take a financial risk until they knew the rate of risk to return.

Ethical Dilemma of the Results Approach:

There is a way around this ethical dilemma. Before the new Consultant commits she could ask those who she thinks might want to start the business if they also will commit to $2,500. But this does not take the risk out of the system it only transfers it down the food chain to someone else. And if you wait for this Consultant that is sponsored direct to you to contact those she thinks would be business builders, would you not ethically also need to allow those Consultants she is sponsoring to do the same. For this ethic to hold this would have to continue ad infinitum down the food chain. So at some point this process has to end so the deal can be struck and when it does those who are at the bottom of this food chain reside in "potential" not "actual" volume and thus are at risk. And let’s not make the ethical quantitative washout argument. Although there is a difference in the risk per person where you could have one person unable to move $2,500 in Results Kits, or two people unable to move $1,250, or five people $500, or ten people $250. In the network overall there is still a total of $2,500 in false volume for which the up-line will be compensated before they make anyone successful. So even if one attempts to explain this away by reasoning that there is only $250 of risk for each down-line Consultant the up-line Consultant still got paid on $2,500 of unconverted potential consumable volume or failure volume in her downline. Thus total ethical load for the up-line Consultant is still remains at $2,500.

The Only Fix for the Ethical Dilemma:

Knowing the failure rate of 50 to 80% in the Results Approach System and that this means there is always a percentage of the Kits that are not converted from potential to actual consumable volume, the only truly ethical way to do the Results Approach System is to offer to buy back the Results Kits that are not moved as is stated on the DSA Website. But if this ethic is applied at the start up presentation with new Consultants, how many would sign up to do the Results Approach? After all they would be exposed not only for their $2,500 but also for the kits of anyone else they bring in? If they bring in four consultants as the training recommends, that is a total of $12,500 in total exposure if the Kits don’t move! Not many would bite on this offer because the risk is too high. Consequently, this ethic is withheld in the Results Approach Trainings and glossed over with the words, “You will figure out a way”.

Ethical Fix with Arbonne's 45 Day Money Back Guarantee is Unethical:

When we have presented these ethical issues to some who do the Results Approach they respond by saying, "O, we solved that problem. There is a 45 Day Money Back Guarantee so if they don't move the Kits by that time they just return them and there is no risk." But this is not purpose of Arbonne's 45 Day Money Back Guarantee. It was designed to protect the customer in those situations where they for whatever reason do not or cannot use the product. It was not designed to be used as a business investment safety valve. And to use it this way may appear to resolve the ethical dilemma of new Consultant risk, but it adds another ethical dilemma of equal or even more severe stature.

Upline Benefits Come From Downline Risk:

Now if we can build the business via the Group Presentation System without the up front risk to the new Consultant, why then this system with risk? Very simply this reason; the up-line Consultant gets paid on the potential volume immediately at no risk to them while the down-line Consultant holds all the risk. Now those who support this system will say, “I have risk. I also placed a $2,500 order.” Yes, but your risk is minimal because you have a network under you that will compensate you and thus absorbs that financial risk. The new Consultant who is just starting out is totally exposed with no current revenue from Arbonne to pay for this $2,500 in inventory. They either have to bring others into the network under the same $2,500 of risk or they have to move the Kits and convert them to actual consumable volume. Another defense is, “But there is always a risk to building a business.” That’s true but this type of risk violates the network market approach where a Consultant can build a business with little investment and financial risk. It should be a Consultant’s own time and effort that determines her success, not how many people in her network are at risk. Another response is, “I reduce the risk because I do fact finding and only take those who have the potential to do the business.” If a Consultant is so good at fact finding that they can eliminate the failure rate in the system by selecting only those who will be successful, then they should be willing to wait for the Consultant to build the business without the risk of the up front inventory. If they are that good at fact finding and they know you will eventually be successful why would they insist on the $2,500 each month? – Because they get paid on that volume immediately even though it is all potential and not actual at that time. So this system is more about the up-line’s pocket book than it is about the success and dreams of the new Consultant. This is not the Arbonne culture. All posts regarding the Arbonne Results Approach Analysis © copyright 2009 VoiceWind & Greg Loveless

© 2009 – 2010, VoiceWind. . .Greg Loveless. All rights reserved.

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