Tag Archives: Network Marketing

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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Trump Network Violates DSA Network Marketing Ethics

Posted by on February 13, 2010 No comments

Emails from the Trump Network's Marketer's Advisory Board & The Executive Diamond Group:

We recently received correspondence from those within and working on behalf of the Trump Network attempting to take advantage of those in Arbonne as the Arbonne Restructuring through Chapter 11 Bankruptcy continues.

As is our policy at VoiceWind.net, we believe the best remedy for inappropriate policies is to expose them to public scrutiny. So here are the facts.

The following are the most important portions of the correspondence.

"I know you have had much success with Arbonne, and to be frank with you, the company (meaning the owners and Mr. Trump himself) are looking for people just like yourself…
 
To put it plainly, we are looking for entrepeneurs with previous MLM experience that have significant downlines."

This person then attaches correspondence from his upline training team in Trump Network and the Tump Network Advisory Group.

"> Who do you know? Who could make a major impact on this company? Who has a huge organization in another company? Who is a person of significant influence?

> Your MAB and the EDG"

DSA (Direct Selling Association) Ethical Guidelines on Proselyting:
For the full information go to: www.dsa.org/ethics/proselyting/

"It is considered to be an improper practice when Company A, or its representatives, specifically and consciously targets the sales force of Company B with the intent of persuading Company B’s salespersons or employees not only to sell or work for Company A, but also to cease selling or working for Company B, thereby interfering with Company B’s business or contractual relations…it does apply to situations involving more than several persons, where the pattern, approach and timing of Company A would clearly indicate an intention to adversely impact on Company B. If Company B sends correspondence to Company A regarding alleged proselyting activity, Company A is expected to appropriately respond within 30 days after receipt of the correspondence."

How the Trump Network Violates DSA Proselyting Guidelines:

  1. They are contacting someone with success in Arbonne
  2. Those in other companies with significant downlines or huge organizations in another company
  3. The timing adversely impacts Arbonne as it is Restructuring through Chapter 11 Bankruptcy

Trump Network Not Part of the DSA (Direct Selling Association):

The best way to resolve this is to file a complaint with the DSA. However, when we checked the DSA Member website, Trump Network is not a member of the DSA. Go figure!

This is not surprising as the above Trump Network business strategies fall outside the DSA Code of Ethics and the DSA Guidelines against Proselyting.

Perhaps this is what Donald Trump means when he says the Trump Network will change the face of network marketing!

Who is EDG and MAB in the Trump Network?:

  • EDG stands for "The Executive Diamond Group" of the Trump Network
  • MAB stands for "The Marketer Advisory Board" of the Trump Network.
    The following definition is taken from a Trump Network web site.
    [Note: The MAB is a functional board that consistently brings ideas and strategies to the Company executive officers and management. In essence, they act on your behalf to ensure that the Company understands the needs, wants, and desires of all the Company Independent Marketers.]     (taken from "Pre-Launch of the Trump Network"

So what this means is this is not an isolated case. Although an individual might not know that proselyting a person in another netowrk marketing company with a significant downline is unethical, the Marketer's Advisory Board for Trump Network should. After all, the person that sent us the email appears to just be following the policies as recommended by the MAB and EDG.

The first email came from the MAB, the Marketer Advisory Board for Trump Network and from the EDG, the Executive Diamond Network and they said in their email:

"Who has a huge organization in another company…"

This was then picked up by the a member of the Executive Diamond Group of the Trump Network who said:

"To put it plainly, we are looking for entrepeneurs with previous MLM experience that have significant downlines."

To be blunt, rather than build their own network of consumers, their strategy is to steal them from other network marketing companies. A strategy that is contrary to the DSA's Code of Ethics and the DSA Proselyting Guidelines.

Trump Network Links Provided in the Correspondence:

 

The above is very straight forward. No network marketing company, or group of persons within the company should attempt to get person(s) from another network marketing company to jump to the other company.

So what does all this mean? When it comes to Network Marketing, Donald Trump, You're fired"!


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

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The Arbonne Grinder and the DM-2-AM Abyss

Posted by on December 29, 2009 No comments

There is a saying in Arbonne, “If you can get to District, you can become a NVP because what you did to get to District you just keep repeating until you are a NVP.”

There is much truth to this statement. However, there is one big difference between qualifying and maintaining District and transitioning from District to Area Manager. The difference is the significant amount of additional drag time.

Our research of this issue revealed the following facts:

  1. The quantity of Consultants who promote to District Manager but never make it to Area Manager is significant and staggering.
  2. There are several key ingredients that cause this stall out.
    • Arbonne Ricochet
    • Residual Income Quarterly Time Drag
    • Business Builder Drag is a Multiple Times Thirty
  3. Consultants can increase there success by:
    • Being aware of what we call the District Manager Grinder
    • Being aware of what we call the DM-2-AM Abyss (District Manager to Area Manager Abyss), and
    • Implement specific strategies to neutralize its effects

Contents of the Arbonne District Manager Grinder:

  1. Building to District Manager – The Process
  2. Arbonne Ricochet
  3. Arbonne Residual Income Quarterly Time Drag
  4. Arbonne Business Builders at a Difficulty Times Thirty
  5. Summary
  6. The Remedy

The Process of Building an Arbonne Business:
Success by the Numbers:

Building an Arbonne Business is a rather simple process. Call, Book, Present, Close & Follow up! Follow Up! Follow Up!

Using the process taught by Patrice Matteson of Dynamic Production a Consultant building to District would have the following numbers.

  1. A Consultant does 3 contacts a day 6 days a week
  2. This equals 18 contacts per week
  3. Times 4 weeks totals 72 contacts per month
  4. With a 6 to 1 Booking Ratio this totals 12 presentations per month
  5. Assume cancellations of 20% to 30% on average leaves 8 presentations a month
  6. Sales/Presentation: Let’s say the average sales are $400 for each group presentation
  7. This totals $3,200/month in new sales on average.

By following the above system Consultants will generate approximately $3,000 per month which is enough volume to qualify and maintain District Manager.

Overcoming Arbonne Ricochet:
Arbonne Ricochet is the process of clients, preferred clients, consultants and managers who come into an Arbonne network and then drop out. A certain percentage of ricochet is a natural process. All successful Consultants in Arbonne have some ricochet in their network.

However, the greater the percentage of ricochet in the network the more drag there is on forward movement. When the quantity of ricochet in a network reaches the same level as the quantity of new sales in the network, it will erode forward movement and tip the network into negative growth. It is at this tipping point that a Consultant is officially in what we call the Arbonne District Manager Grinder and the DM-2-AM Abyss.

There are two ways to deal with this.

  1. Reduce the quantity of ricochet
  2. Increase the quantity of new sales

Arbonne Residual Income Quarterly Drag:
Residual income is the volume generated by reorders in the network. A client, preferred client or consultant will purchase product, consume it and then come back and reorder a few months later. The volume from reorders is then added to the new sales and creates an increase in total volume. As more and more clients are added to the network, and a percentage of them come back to reorder, residual income will increase. The process would look something like the bar graph below.

The green bars represent $2,500 in new sales every month. This will also add new clients to the network each month. The gold bars represent residual income from the reorders these clients place after they consume the product.

As you can see if a Consultant works consistently and adds new clients to the network each month, as the reorders kick in, there is a corresponding increase in volume.

When a Consultant does $3,000 in direct new sales each month, and then in the fourth month 50% of those who purchased the first month come back and reorder, this will increase the volume by $1,500. So their total volume would be $3,000 in new sales plus $1,500 in reorders for a total of $4,500 in the fourth month.

Jumping out to the seventh month there is again $3,000 in new sales and 50% of those who purchased the first and fourth months reorder. This is $3,000+$1,500+$1,500 or $6,000.

Continuing this process, using the above calculations, the Consultant will hit first step Area at $10,500 in the 16th month.

This reveals two things:

  1. First, residual income is a very powerful way to build a consistent income in Arbonne. This is why it is one of the four keys ingredients to look for in a successful network marketing business according to Dr. Charles King.
  2. And second, because the residual income is tied to the use of the product, promotions are tied to the frequency rate of reorders.

Since promotions and residual income are connected this creates what I call the Arbonne Residual Income Quarterly Drag.

This simple fact greatly increases the failure rate as many Consultants assume that since they could reach the District Manager level volume of $2,500 in one month, then they can also get to Area Manager level volume of $10,000 in a few more months.

When the promotion to Area Manager does not happen as quickly as anticipated, many Consultants quit before they reach Area. It takes so long to transition from District to Area Manager that they think the system does not work or they think there is something wrong with them and that’s why they cannot get to the next level of success in Arbonne. As a result they disappear into the Grinder of the Residual Income Quarterly Time Drag and disappear into the DM-2-AM Abyss.

Arbonne Business Builders at a Difficulty Times Thirty:
Another way Consultants can transition from District to Area Manager is by adding business builders to the network. This process also known as duplication is another feature that makes network marketing so powerful. When a Consultant adds one business builder to their network, and that business builder follows the same system outlined above, the sponsoring Consultant will see an immediate $3,000 increase in their volume.

Using the process outlined above a sponsoring Consultant with a volume of $3,000 who adds two business builders to their network, who each also have $3,000 in their volume, will now have $9,000 in volume.

If adding business builders to the network can have such an immediate and dramatic increase in volume, it would appear this is the key to bypassing the DM-2-AM Abyss. But similar to the Residual Income Quarterly Time Drag, the process of adding business builders to the network also contains a time drag.

The numbers it takes to add business builders to the network looks something like this:

  1. Ask three people a day 6 days of the week
  2. This equals 72 a month
  3. With a 6 to 1 booking ratio you have 12 bookings each month
  4. One third cancel leaving 8 presentations
  5. This totals approximately 24 every three months
  6. On average a Consultant has to talk to 20 to 30 persons to find one person that is interested in the business
  7. So these numbers reveal that, on average, a business builder is found every three months
  8. And of those that show an interest a percentage ricochet out of the system.

Since we are talking averages, the first person that shows interest in the business opportunity may not remain a business builder. It may be the second, third, fourth of fifth person that is interested in the business that actually becomes a business builder. If it’s the second it will take six months. If it’s the fourth, it will take one year to find your first business builder.

The point is there is no real way to control this. As my wife says, “When it comes to Business Builders, you are working with a volunteer army and they can go AWOL at any time”. All a Consultant can do is play the numbers game and let the numbers work themselves out.

The Business Builder Multiple Times Thirty Time Drag can be compressed by any of the following:

  1. Increase the number of persons you contact.
  2. Become more skilled at the process to increase the:
    • Booking Ratio (the number of “Asks” to “Bookings”) If you can increase the Booking Ratio from 6 to 1 to 3 to 1 you have essentially doubled the number of persons in the pipeline. This is turn will cut the three months per business builder in half to 1.5 months.
    • Close Ratio (the number Bookings to Presentations)
    • Fact finding to discover a fit (If they don’t see how Arbonne fits into their life and/or dream they will not consider the business. Since they don’t know how Arbonne could work for them you have to facilitate this process by pointing to potential benefits.)
    • Targeting: while making the 100 name list, indentify those who you think would be interested in and would make great business builders.

Summary:
So what about the saying in Arbonne, “If you can get to District, you can become a NVP because what you did to get to District you just keep repeating until you are a NVP”?

There is much truth to that statement. However, even though the process to get to District is similar to what it takes to get to Area Manager, the additional time drag caused by the Residual Income Quarterly Drag and the Business Builder Multiple Times Thirty creates a Grinder that is not present in the transition from Consultant to District Manager.

The numbers reveal why this becomes a grinder and abyss. If only one in 30 persons is interested in the business and a Consultant has a 6 to 1 booking ratio that means she will have to contact 180 persons to find one potential business builder. For some these numbers are so staggering that they cannot push through it. As a result their dreams grind to a halt in the DM-2-AM Abyss. But that need not be the case. There is hope.

The Remedy to the Arbonne District Manager Grinder:
What we have found is when Consultants are aware of the Residual Income Quarterly Time Drag and the Business Builder Multiple Times Thirty Time Drag, they have a much greater chance of success. This is because when they hit the DM-2-AM Grinder they know it’s not their fault, or that the system doesn’t work or that Arbonne doesn’t work. They know it is a natural part of the process and if they stay in activity and keep swinging, they will eventually push through to success.

It is similar to one of my players who comes in for a pitching lesson. They are at point “A” and want to move to point “B”. Depending on the age and athletic ability of the player and which technique we are working to perfect, it could take anywhere from 3,000 to 10,000 reps before they have it in muscle memory. There is no way to short circuit this process.

As a result there are only two ways to reduce the time line:

  1. Increase the quantity of reps they do each day or
  2. Increase the number of days they work out.

However, both of these are limited by the natural forces of metabolic recovery. Just as there is a limit to the quantity of contacts per day a consultant can make each day and the length of time they can sustain this, the same is true for a pitcher’s workout.

So when new players come in for a lesson to correct a flaw one of the first things I do is count out the Muscle Memory Time Drag for them. If a player needs 5,000 reps and they follow a standard metabolic recovery schedule then they should be able pitch 100 pitches a day, four days a week. This will total 400 pitches a week or 1,200 reps a month. At that rate, “IF” they do their workouts they will meet their 5,000 rep threshold in three to four months.

But even with these facts I still have parents who want to condense this time. When that does not happen, they either think there is something wrong with the pitching system we use or they think their daughter is not cut out to be a pitcher.

Now there is nothing wrong with the pitching system because it has produced a long list of players who have had all or part of their college education paid for through scholarships. In addition, every year since 2000, this system has produced at least one or more pitchers who have thrown a perfect game. So this eliminates the system as the cause of the failure.

Since it not the system, it must be their daughter, right? Wrong! There is no way to determine that either. It could be that she does not have what it takes to be a pitcher. Or it could be she is a great pitcher but has yet to reach the repetition threshold to establish muscle memory. In other words, on this side of the threshold she has not yet reached her greatness. We will only know whether or not she is a great pitcher, when she gets to the threshold.

The same is true in Arbonne. Greatness is in the numbers. Have you done the numbers necessary for success? If you haven’t then you have not reached the repetition threshold. So you cannot say it doesn’t work. Neither can you say “I can’t be successful at this”. In other words, on this side of the threshold you have not yet reached your greatness. The only way you will know if you can reach greatness in Arbonne or not is to reach the threshold.

So the saying in Arbonne, “Don’t quit before pay day” truly applies when you look at the numbers. In the final analysis, a Consultant’s belief in the system has to be strong enough to overcome the Grinder that includes the Residual Income Quarterly Time Drag and the Business Builder Multiple Times Thirty Time Drag. Their belief has to be able to grind through chasm so the DM-2-AM Abyss does not swallow them up.

If you are reading this you could be that person that is caught in the DM-2-AM Abyss. Or as a Manager in Arbonne you may know of others who are in this position. What is important to remember is “It is not you”; “It is not them”; it is a normal part of the process. To be successful you have to continue to work the process; to work the numbers, until you hit the threshold of success. Remember, your greatness will only blossom at the threshold.

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

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

Posted by on November 1, 2009 No comments

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.

Residual Income Quarterly Frequency Rate

Residual Income Quarterly Frequency Rate

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:

Mathematics of Weakness Month One

Mathematics of Weakness Month One

The second month:

Mathematics of Weakness Month 2

Mathematics of Weakness Month 2

The third month:

The Mathematics of Weakness Month 3

The Mathematics of Weakness Month 3

The fourth month:

The Mathematics of Weakness Month 4

The Mathematics of Weakness Month 4

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.

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Should a Consultant Do the Arbonne Results Approach

Posted by on October 28, 2009 No comments

In the first post on this topic and in this series I listed those "Who Should Read the "Analysis of the Arbonne Results Approach". This included anyone who had never heard of the Arbonne Results Approach and those who had questions about it. It included those who were already Consultants whose Upline was recommending the Arbonne Results Approach as a business building system. And it included new recruits who had been asked to sign up with a team that was doing the Results Approach. The following is a summary of the Analysis of the Arbonne Results Approach and it is recommended that you read this before you commit to the Results Approach. To read the full post of any section, click on the title of that section.

  1. The Two Types of Volume in the Arbonne Results Approach. Unlike the other business building systems in Arbonne that create one type of retail volume, the Arbonne Results Approach creates two types of volume. All business building systems create "actual consumable volume" by selling product to customers. But the Arbonne Results Approach also creates "potential consumable volume". “Potential consumable volume” is volume in a network created by the purchase of Results Kits by business builders. Since these Result Kits are held by business builders they are not being consumed by a customer which means there will be no residual income from reorders. As a result, "potential consumable volume" stands outside Dr. Charles King’s “consumable product definition” which is one of the four key ingredients to look for in a successful business as stated in both the Arbonne Opportunity and Results Presentations.
  2. The Failure Rate in the Arbonne Results Approach is greater than in other systems and this is caused by the "potential consumable volume" created by the Results Approach Kits.
  3. The Potential Volume Generated by the Arbonne Results Approach is False Volume and Increases the Failure Rate. There is a correlation between the rate of failure and the percentage of "potential consumable volume" in a network.
  4. The Pyramid Scheme Tipping Point in the Arbonne Results Approach. As the "potential consumable volume" from the Results Approach increases as a percentage of the total volume in a network, there is a tipping point reached where that network begins to process as a pyramid. Failure to deal with this ethical issue taints the network involved, those that put such a system into motion, those that allow it to continue, those who profit from it and the company as well.
  5. The Ethical Dilemma Caused by the Arbonne Results Approach. Any upfront purchase of Results Kits places the sponsor and the new business builder in an ethical dilemma because their upfront risk can only be reduced by sponsoring business builders into the network with the same upfront risk they have, or by converting the Result Kits into consumable volume by selling them. But bringing in more Business Builders with upfront volume to replace the previous volume is by definition a pyramid. The only real option is to build the system by converting the "potential consumable volume" into "actual consumable volume". But since it is possible to use other Business Building Systems to build an Arbonne business, and without the upfront risk, why this system with risk? Because the Upline Consultant gets paid on the upfront volume in the Result Kits immediately even though it is all "potential consumable volume" and not "actual consumable volume". So this system can be more about the up-line’s pocket book than it is about the success and dreams of the new Consultant. For new Consultants reading this; or for those who are considering an Arbonne business — this is not the Arbonne culture.
  6. Results Approach Temporary Balloon Effect on Existing Networks. Beyond the ethical and legal outlined above, there is the simple fact that the potential consumable volume in the Results Approach creates a balloon effect on an existing network. This Balloon Effect can create a false sense that the Results Approach System works. The Balloon Effect is where an existing network that is generating say an average of $50,000 in retail sales each month, gets as many business builders as possible, and as many new recruits as possible to purchase Result Kits to do the Results Approach. Let's say each business builder purchases $1,000 in Result Kits and there are 30 business builders and new recruits. This will immediately increase the volume in this network by $30,000 dollars. This next part is the most important part of what you will read here. In the Results Approach System, your Upline will get paid on that volume whether or not you become successful in Arbonne. This is not the Arbonne Culture. In fact in the Business Presentations it says, "We become successful when we make others successful." This is true in the other Arbonne business building systems, but not necessarily true with the Arbonne Results Approach System.
  7. The Mathematics of Weakness in the Arbonne Results Approach. Even if you are able to overcome the risk and build your business with the Arbonne Results Approach, if you sponsor someone and they start to grow fast, vertically, this volume will pass out of your pay range. In the Arbonne Compensation Plan, security comes with a consumer network, not with a long leg of business builders stacked on top of the one another whre the volume pushes the Upline into a management level.
  8. Arbonne Results Approach is Fast Track Because of the Failure Volume: So where does the so called “Fast Track” volume come from? If one uses a non-Results Approach System to build an Arbonne Business, if a Consultant starts and then quits, the Upline Sponsor only gets paid on the amount of success that person had while they did the business. But if the Results Approach System is used, if a Consultant starts and then quits, the Upline Sponsor will get paid on all the volume in the upfront Result Kit orders. So in the Arbonne Results Approach System the up-line Consultant is paid before she makes the new Consultant successful. In fact she is paid even if the new Consultant fails. I call this type of revenue that comes from the upfront orders of Consultants that fail, “failure volume”. This "failure volume", from our research, is the main source of the "Fast Track" volume.
  9. Ethical & Unethical Use of the Arbonne Results Approach. In light of the above 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?  These facts change everything. When the data indicates that the additional revenue is generated by the failure in the system, to implements the Results Approach, as opposed to any other business building system, ceases to be a business strategy decision. Rather, it is a decision that has both ethical and legal implication. In light of this, there is really only one correct response.
  10. Options to Make the Arbonne Results Approach Ethically Viable. In short the only way to insure that a network using the Arbonne Results Approach does not tip into a pyramid scheme and eliminates the "failure voluem", is to remove the full size Result Sets that have retail volume that the Upline Consultants get paid on. In place of these would be tester kits with a 3 to 7 days supply. These testers would then be classified as a business aid. Since Business Aids do not have retail volume attached to them, but are a business expense, this would prevent the upline from being paid on this business aid. It also eliminates the potential contamination that the full size systems are susceptible to.

Conclusion:

If someone wants you to build an Arbonne Business using the Arbonne Results Approach, and this includes the purchase of the Full Size Results Sets, you must accept the fact that a portion of the volume in your network will be generated by "potential consumable volume" from the Result Kits rather than "actual consumable volume" where the product is purchased and consumed by a customer who will reorder. As a result, due to the failure rate and thus the false volume in the network, at some point, somewhere in the localized network, where this failure occurs, the network will tip from a legitimate Multilevel Marketing Network of consumers into a network where the majority of the volume is from recruits purchasing product. When this happens, the network is a pyramid.

So if you are a new recruit or already a Consultant and your Upline wants you to build the business with the Full Size Result Kits, in light of the above, there are two possible explanatioins:

  1. They do not understand the difference between "potential consumable volume" and "actual consumable volume". This means, no matter what they say or how successful they say they are or have been, they do not fully understand the risks inherent in the Arbonne Results Approach.
  2. Or they do understand difference between "potential consumable volume" and "actual consumable volume" but choose to use the Results Approach anyway.

Either of these would necessarily make me nervous. Why?

If they fall into the first category they are asking you to use a Business Building System about which they do not fully understand the risks. And if they don't understand the risks they cannot protect your best interest.

If they fall into the later category they have consciously chosen to use a Business Building System where they obtain an upfront benefit based on the amount of risk assumed by those in their downline network. In this case they do not have your best interest in mind.

So you need to question them about this. At this point you may hear one or more of the following regarding the Arbonne Results Approach:

  1. This is the only way to build an Arbonne business.
  2. This is the best way to build an Arbonne business.
  3. This is the fastest way to build an Arbonne business.
  4. The most successful people in Arbonne build an Arbonne business this way.

I can tell you as an insider all of the above are false. So at this point you need to stop and do your due diligence. If you still can't get answers, you need to move up the food chain to their upline and continue to do so until you find someone who understands the risks the Arbonne Results Approach places on you and/or someone who will assist you in building an Arbonne business with another Business Building System. If after all that you still cannot find someone then call Arbonne at 1-800-ARBONNE and ask for a referral of someone else in your area that you could sign up under. Then take this person through the same process listed above. If they do not understand then continue this process until you find someone who does, and is willing to work with you. One more point — I get tired of hearing "The way you come into the business is they way you will bring others into the business". This, to be blunt, is a hard line sales technique. And like the other statements about the Arbonne Results Approach listed above, it is false. For example, my wife came into Arbonne by using the product and falling in love with it. She was so impressed she would share it with others. As a result she started receiving what she calls "Thank You Checks" from Arbonne. These continued to grow. Then she had a turning point where she decided to treat Arbonne as a business and not a hobby. (My definition of a hobby is there is more money going out than coming in.) My wife built her business doing One-on-Ones. She was a designer and when clients came over for a fitting she would share Arbonne with them. As some of these clients became business builders some did One-on-Ones as she did, but others did Group Presentations. She even had one client who purchased a Normal to Oily Set and my wife bartered the cost of the product in exchange for our son's modeling photo shoot. A few months later this person called because she needed to reorder and wanted to barter again. But we did not need another photo shoot so my wife recommended that she host a presentation and earn her product, which she did. At that presentation she not only earned her product, she made a few dollars profit and signed up several business builders. This client is now an EVNP and of those that signed up that night one is an ENVP and two more are RVP's. My point is each of them came into Arbonne differently but they have all become successful in Arbonne. One final point. It is a fact that the overwhelming majority of those who are the most successful in Arbonne do not do the Arbonne Results Approach, they do Group Presentations. Another inconvenient truth working against the Arbonne Results Approach. © copyright 2009 VoiceWind & Greg Loveless

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

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Summary and Conclusion – Arbonne Results Approach Analysis

Posted by on October 27, 2009 No comments

The following is a summary of the main points contained in original 14 posts of "The Arbonne Results Approach Analysis". For the full information on any sections below, click on the heading title link and it will take you to that post.

The Two Types of Volume in the Arbonne Results Approach:

  1. Actual Consumable Volume: In the Group Presentation and the One-on-One Systems all the volume comes from orders placed by customers who in most cases will use and consume the product which will result in a large percentage of these persons reordering. This system produces a large consumer base with residual income which makes for a stable network.
  2. Potential Consumable Volume: In the Results Approach System all the volume from the "Result Kits" is "potential consumable volume". It only becomes "actual consumable volume" when the "Result Kit" is purchased or generates a purchase of a Results Set. In addition, any volume in a network that is "potential consumable volume", since it is not being consumed, it stands outside Dr. Charles King's "consumable product definition" which is one of the keys to a successful business.

Failure Rate in the Arbonne Results Approach:

  1. Only 3% of the population actual does what it takes, and does what it takes long enough to be successful.
  2. As a result of the above there is always failure in the system.
  3. But the data from our analysis showed that the failure rate was significantly increased in those networks that used the Results Approach.
  4. The greater the percentage of volume in a network that is from the Results Approach, the greater the failure rate.
  5. The cause of this is the "potential consumable volume" from the Results Kits. The more "potential consumable volume" there is the greater the risk that this "potential consumable volume" will never be converted from potential to "actual consumable volume".

There are two issues caused by the data we outlined above.

  1. The first is the Result Kits are never converted into consumable volume which means that line flashes out and dies. Because if they cannot move their kits, they are not going to bring anyone else into Arbonne.
  2. This impacts residual income. In a Group or One-on-One Presentation System all volume has the potential to be residual income, for those Kits that are not moved there is a 0% chance that there will be a reorder. Thus the impact on residual income is dramatic and devastating due to the 50 to 80% failure rate and the 0% of reorders from Result Kits that are not moved.

Potential Volume is False Volume and Increases Failure Rate in the Arbonne Results Approach:

  1. Because there is a known 50% to 80% failure rate in networks that do the Results Approach.
  2. And because this menas 50% to 80% of the upfront potential volume from Result Kits will never be converted to actual consumable volume.
  3. This means the "potential consumable volume" in a network is false volume.
  4. The greater the percentage of false volume in a network, the greater the odds are that this network will fail.

The Pyramid Scheme Tipping Point in the Arbonne Results Approach:

  1. The key element that distinguishes a legitimate Multilevel Marketing Network from a Pyramid Scheme is a legitimate network is compensated for selling product to consumers and establishing a market.
  2. Pyramid Schemes on the other hand make their profit on volume sales to new recruits who buy the product.
  3. As the DSA Website says: "IF YOU COULD BE STUCK WITH UNSOLD INVENTORY, BEWARE! Legitimate companies which require inventory purchases will usually “buy back” unsold products if you decide to quit the business. Some state laws and the DSA Code of Ethics require buy-backs for at least 90% of your original cost."

What does this mean for the Results Approach?

  1. Since the Result Kits are product sold to recruits
  2. Since there is a known 50% to 80% failure rate
  3. That means 50% to 80% of the recruits will be left holding product
  4. This percentage tips an Arbonne business from a legitimate network into a pyramid
  5. The attempt to escape this reality by saying the percentage of failure volume compared to the overall volume in the network is minimal does not address the ethical and legal issues.
  6. Even if the total percentage of failure volume in the entire network stays below the tipping point, this does not mean the localized network that was processing 100% as a pyramid scheme is now legitimate.
  7. Those impacted by a localized network processing 100% as a pyramid, are impacted 100% by a pyramid scheme.
  8. Failure to deal with this ethical issue taints the network involved, those that put such a system into motion, those that allow it to continue, those who profit from it and the company as well.

Transfer of Ethical Responsibility:

The practice by Upline Consultants and by Arbonne Corporate of using the Independent Consultant Agreement as a sheild to protect themselves is not a legitimate ethical option and, now with notification, is not a legitimate legal option either. This is especially true in light of the fact that there is a business model that will eliminate the upfront potential volume so Arbonne Corporate does not have to walk this tight rope.

 

The Ethical Dilemma Caused by the Arbonne Results Approach:

Any upfront purchase of Results Kits places the new business builder in an ethical dilemma because their upfront risk can only be reduced by adding more business builders to the network with the same upfront risk they have so they can be compensated. Here are some ways out of this ethical dilemma.

  1. The new recruit could wait and see if she can find four people to place the same upfront order thereby reducing or eliminating her risk. But then the new recruit would have to allow her new recruits to do the same. The problem is that this can go on ad infinitum down the food chain. But this fails because at some point this process has to end and when it does someone is holding "potential" not "actual consumable volume".
  2. The Upline Consultant can guarantee to buy back any "potential" volume that is not moved. But this ethic is not offered because it would place new recruits at a high risk and thus no one would bite on the offer.
  3. Upline Consultant could (and this has been done) explain to the new recruit that they have 45 days to move the product and if they cannot they can return it to Arbonne under the 45 money back guarantee. But this is not an ethical solution as this 45 day money back guarantee was implemented for the customer not to reduce a business builders risk.

So if there is a system that can build an Arbonne business without the upfront risk, why this system with risk?

Because the Upline Consultant gets paid immediately on the up front volume from the Result Kits even though this is all potential and not actual consumable volume. 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.

 

Results Approach Temporary Balloon Effect on Existing Networks:

Beyond the ethical and legal there is the simple fact that the potential consumable volume in the Results Approach creates a balloon effect on an existing network.

What is the balloon effect?

  1. Let's say you have an existing RVP network that is doing $120,000 a month in volume. This volume is all product sold to consumers so it is actual consumable volume.
  2. This network has 30 active business builders in it.
  3. The RVP decides they are going to do the Results Approach and all 30 business builders purchase $2,500 in Result Kits.
  4. $2,500 in Result Kits times 30 Business Builders equals $75,000 in additional income over the existing actual consumable income in the network.
  5. This $75,000 added to the $120,000 totals $195,000 and pushes this RVP into qualification.
  6. But the additional $75,000 is all potential consumable volume and what ever portion is not converted from potential to actual consumable volume will eventually flush out of the network.
  7. The amount of potential consumable volume that is not converted to actual consumable volume will be the amount of eventual down turn in the network.

The Mathematics of Weakness in the Arbonne Results Approach:

  1. The Results Approach is really a One-on-One System.
  2. Thus the fact that a Consultant using a One-on-One System has to compensate for this by increasing activity is a weakness of the Results Approach.
  3. To compensate for this the upfront quantity of Results Approach Kits are increased .
  4. But this causes the network to build faster with business builders and consequently with less consumers.
  5. As a result the potential consumable volume form the upfront orders moves down the network levels more rapidly.
  6. This in turn causes the volume from the Results Kits to more quickly pass out of the pay range of the Upline Consultant. When this happens their paycheck suddenly decreases accordingly.
  7. The only way to correct this is for this Upline Consultant to add more business builders into the system directly to her or to build a consumer network.
  8. The result of the above scenario is what I call "The Mathematics of Weakness" in the Result Approach.

Arbonne Results Approach is Fast Track Because of the Failure Volume:

  1. Because the Results Approach is really a One-on-One System, the increased volume cannot be attributed to the efficiency of the system.
  2. Our research indicates those networks that used the Results Approach without large upfront orders grew at or below those that used a Group Presentation System.
  3. So where does the "Fast Track" volume come from?
  4. In a non-Results Approach System if a Consultant starts and then quits, the Upline Sponsor only gets paid on the amount of success that person had while they did the business.
  5. But in a Results Approach System, if a Consultant starts and then quits, the Upline Sponsor will get paid on all the volume in the upfront orders or the front loaded volume.
  6. So in the second case the up-line Consultant was paid before she made the new Consultants successful. In fact she was paid even though the new Consultant may have failed. I call this type of revenue that comes from the upfront orders of Consultants that fail, “failure volume”.

Ethical & Unethical Use of the Arbonne Results Approach:

  1. Because in the Results Approach System 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.
  2. And because there is a 50% to 80 % failure rate.
  3. And because a large portion of this additional volume in the Results Approach Network comes from the failure in the system.
  4. 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?
  5. In light of the information above, "Large Upfront Orders Make the Arbonne Results Approach Unethical".
  6. The above 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 both an ethical decision and a legal decision, and, in light of this data there is really only one correct answer.
  7. 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 upfront retail volume that the Upline Consultant gets paid on prior to it being actual consumable volume; this system is not included in this ethic.

Options to Make the Arbonne Results Approach Ethically Viable:

  1. The first option is for Arbonne Corporate to issue a directive. But 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 as 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. Because the only issue the sample pack addressed was cleanliness and thus Arbonne Corporate liability in this regard. The training did not address the ethical and legal issue of the upfront volume from the Result Kits. In fact the Arbonne University Training made this issue even worse because a new Consultant can still be enticed into purchasing a large quantity of these Result Kits which still places the new Consultant at risk, and the Arbonne Results Approach Training appears to give the Arbonne seal of approval to this system. Thus Arbonne is complicit in this risk. This strategy implemented by Arbonne in this Results Approach Training, was legalese, and created a wall of protection around Arbonne Corporate while at the same time it left those in the field totally vulnerable to the very same ethic from which Arbonne Corporate had protected itself. In essence, the field had been left to swim with the sharks as Arbonne profited from this system.
  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.
  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 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.
  4. 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)

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

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Arbonne Results Approach is Fast Track Because of the Failure Volume

Posted by on October 22, 2009 No comments

Even with all this data there is still a fact that some of the fastest growing networks are utilizing the Results Approach. In Arbonne it is referred to as the “Fast Track” system. But why is it “Fast Track”? What makes it “Fast Track”? And more importantly, does it last?

Results Approach Fast Track Volume Built on Failure:

The “Fast Track” cannot be caused by the efficiency of the Results Approach System. After all it is a One-on-One system so it takes more time to get in front of the same quantity of people as compared to the Group Presentation System.

So what is it about the Results Approach System that allows it to generate greater volume and do so faster? Our research indicates those networks that used the Results Approach without large upfront orders grew at or below those that used a Group Presentation System. On the other hand those networks that used the Results Approach with large upfront orders at first grew faster, then plateaued out and then declined. A comparison of a Group Presentation network and a Results Approach network reveals the cause of this.

Let’s say Consultant “A” builds her network with Group Presentations or One-on-Ones and sponsors Consultant “B”. Then Consultant “B” sponsors four others. Then after booking and holding presentations they all decide to quit (and 50 to 80% will). The only volume generated was from the Group Presentation sales. Consultant “B” and her friends probably have no inventory except their personal order. They were not successful so Consultant “A” did not get paid on them or was only compensated for the amount of success they achieved.

But if Consultant “A” builds her network with the Results Approach and sponsors Consultant “B” and Consultant “B” sponsors four others all with a $2,500 upfront order, and then they all decide to quit, there is a total of $12,500 of potential volume in Consultant “A’s” network on which she will be paid. So in this case the up-line Consultant was paid before she made the new Consultants successful. In fact she was paid even though the new Consultant failed. I call this type of revenue that comes from the upfront orders of Consultants that fail, “failure volume”.

Failure Volume and The Fast Track:

Now when we take this “Failure Volume” in the Results Approach and add it across a network, and then we compare this to a Group Presentation Network that has no “Failure Volume”, the amount of the difference results in the “Fast Track” volume. So it is not the Results Approach’s ability to produce more sales volume that makes it “Fast Track”. Rather it is the upfront volume from the 50% to 80% who fail and stop doing the business that is responsible for the “fast track” volume. Because unlike the Group Presentation System, in the Result Approach System, the upline Consultant will get paid immediately on the large upfront orders of Results Kits whether or not these Kits are moved from potential to actual consumable volume.

Let me repeat that; it is not the efficiency of the Results Approach that is generating the greater volume, it is the up front volume paid by the 50% to 80% of the Consultants who will stop doing the business but have already paid into the system. The Results Approach is “Fast Track” because of the “Failure Volume”.

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

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