Tag Archives: System

Results Approach Temporary Balloon Effect on Existing Networks

Posted by on October 21, 2009 No comments

The Balloon Effect Defined:

On numerous occasions I have had discussions with an RVP or NVP who decided to change from One-on-One, Party or Group Presentation System to the Results Approach System. When I ask if it worked they will say something like, “We saw an immediate impact on our numbers up and down the network. Those who were close to qualifying for the next level finally got there. It was amazing.”

When I ask, “How much of the volume was potential (from Results Kits) and how much was actual,” there is a blank look or a question as to what I mean. This is evidence that this person did not understand the balloon effect of Results Kits on an existing network.

Calculating the Balloon Effect on Existing Network:

What is the Balloon Effect? Say we have an RVP who has three Area Managers who each have three District Managers. One Area Manager is doing $30,000 another $25,000 and the third $20,000 each month. This RVP also has three District Managers direct to her. One is doing $8,000 another $6,000 and the third $4,000 each month. Adding in the volume from her central district we get a total monthly volume of $120,000. The network would look something like this.

RVP Network Tree

RVP Network Tree

In this network there are three AM’s and 9 DM’s under them and three DM’s direct to the RVP for a total of 15 business builders. Now let’s make a conservative assumption that each of these business builders has on average one business builder at the Consultant level. That would give this network a total of 30 active business builders.

This RVP decides her team is going to do the Results Approach, so all the Business Builders do $2,500 purchase of Results Kits. That’s $2,500 times 30 or $75,000 dollars of an increase to the previous month’s volume. This pushes the RVP’s volume from $120,000 to $195,000 in one month and into qualification for NVP.  Observing this the RVP believes the Results Approach works. But this is not correct. You see the entire $75,000 generated from Results Kits is all “potential consumable volume” not “actual consumable volume”. Whatever portion of the Results Kits do not get converted into actual consumable volume, will cause the RVP’s volume to drop by that amount the following month or at some point.

Down Turn of Balloon Effect Impacts Residual Income:

In addition to the down turn from the potential Results Kits that were not moved, there is another impact. Not only will her volume drop by the portion of volume that remains potential, but the potential volume will have to be consumed before residual income will kick back in. So it has a negative impact on volume and residual income for an extended period of time.

The combination of these two is what I call the “Balloon Effect”. The purchase of the Kit’s by existing Business Builders balloons the volume and in some cases pushes the Consultant to the next management level. But whatever the amount of potential consumable volume that is not converted to actual consumable volume will have to flush out of the system.

It is true that the potential volume in these Results Kits could be converted to actual consumable volume. But the only way to do this is to book appointments, which, it has been proven, can be done without the Results Kits.

Some Consultants believe what I have described will not happen to them. They will keep the string going. Well that may be so, but even when you keep the string going, if you do not convert the Results Kits from potential consumable volume to actual consumable volume you will still lose because of the protections built into the Arbonne Compensation Plan. We will deal with that next in “The Mathematics of Weakness”.

All posts regarding the Arbonne Results Approach Analysis

© copyright 2009 VoiceWind & Greg Loveless

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

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

Posted by on October 20, 2009 No comments

Potential Volume Creates False Volume:

The advantage of the Group Presentation System is if you have a business builder quit, their up-line will still continue to get volume from those customers that were brought in because as they consume the product they will come back and reorder. But in the Results Approach if a business builder quits after placing the $2,500 order, but before they moved the Kits, there are no consumers to reorder. Consequently, all this volume is what I call “false volume” in the network. It is not consumable volume and thus it was technically a one time purchase.

On the other hand, we found that those Success lines where there was a balance of volume from Results Kits (and let’s make clear these are Results Kits without large orders) and regular orders from customers who were consuming the product, the failure rate was far lower. And in those lines where the Results approach was not used at all the failure rate was even lower still.

Knowing this, what does it mean for the “potential volume” in the Results approach? If we are honest and accept that some failure will occur then we have to acknowledge that there is always a risk that a certain percentage of the volume from Results Approach Business Builder Kits (from 50% to 80%) will never be converted from “potential consumable volume” into “actual consumable volume” and thus into residual income.

False Volume’s Negative Impact on a Network:

Here is how this plays out in a network:

  1. As the volume from Results Kits increases there will be a corresponding increase in “potential consumable volume” in the network.
  2. As the “potential volume” in the network increases, so does the risk this potential consumable volume will never be converted to actual consumable volume.
  3. If there is no consumable volume to replace this potential volume, then the percentage of volume in your network that was generated through Results Kits is the amount of the down turn that will occur in your business.
  4. The greater the ratio of Results Kits volume is to the total network volume, the greater the risk of a down turn and the larger this dollar amount will be.

So the more Consultants you have who use the Results Approach System, the higher the potential consumable volume there is in your network. And any of this potential volume that is not converted to actual volume is false volume. And the higher the false volume is in your network, the greater the down turn will be and the more difficult it will be to overcome. And in some cases, as history has proven, nearly impossible to overcome.

Converting Potential Volume to Actual Consumable Volume:

There are only two ways to move Results Kit volume from Potential to Actual.

  1. The first is the Consultant who purchased the Result Kit receives a check for that Results Kit. At that point in time that portion of the volume moves from potential volume into actual consumable volume.
  2. The second way is when a replacement kit is purchased to cover the original  results kit.

Here is the tricky part. In Item #1 above, since this transaction occurs off the Arbonne books, there is no way to know from the Web Stats that they received a check for one of the kits they had ordered in a previous order. So there is no way to know that this potential volume has been converted to actual consumable volume. And as for Item #2; the only way to know that this occurred is by researching what each person in a network ordered and keep a running total from month to month. And who does that?

Why is it important to make the distinction between potential consumable volume and actual consumable volume and what portion of this is not converted? Because, in Web Stat history we can see the detrimental effects “potential” business builder kit volume has had on Linda’s network. Time after time we see those who came into the business through the Result Approach, and often with large orders, only to have this process flame out.

Increase of Potential Volume Amplifies System Failure:

The potential for failure when the Results Approach is implemented is amplified by the fact that the Results Approach is advertised as the Business Building System of choice when a Consultant does not have time, or does not want to do parties. But just as when a Consultant does One-on-Ones rather than Group Presentations, they have to increase the quantity of appointments to get in front of the same amount of clients as they would with the Group Presentation System.  The same holds true for the Results Approach. A Consultant using the Results Approach is basically building the actual consumable volume in their network one person at a time so they will have to increase their activity to make up this difference.

But we found many did not increase the number of appointments to compensate for this disparity. Rather the size of the order is increased to compensate for this divergence. And this is most often done with business builder Results Approach Kits which are only “potential consumable volume” not actual. As the size and quantity of the Results Kits Orders increases there is a corresponding increase in risk of failure. In fact it is magnified several times over in these networks.

All posts regarding the Arbonne Results Approach Analysis

© copyright 2009 VoiceWind & Greg Loveless

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

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Failure Rate in the Arbonne Results Approach

Posted by on October 20, 2009 No comments

Results Approach Failure Rate:

In the Results Approach System when you have a business builder she will place the standard Results Approach recommended $2,500 order. At the time of purchase this is not consumable volume but business builder volume or potential consumable volume. Now some will say, “But I or they will move it.” Are you sure? What do the numbers say? What do the statistics reveal about the percentage of Kits that are moved as compared to those Kits that are not moved? You can’t say with confidence that they will move it unless you know the numbers!

I have sat through hundreds of Arbonne Opportunity meetings and trainings and I often hear it stated that only three percent of the population will do what is necessary, and do what is necessary long enough, to build a successful business. As a coach who works with elite athletes from age 8 to the collegiate level I know this to be true. So if this is true, then it is possible that a significant number of those who sign up to do the business will not do what is necessary and/or will not do what is necessary long enough to succeed. In other words, no matter how good their intentions are, some will not move the Results Kits from potential to actual consumable volume.

So what are the numbers? From the statistics we have collected on three NVP’s and three RVP’s the rate of failure ranges from 50% to as high as 80%. This should not be surprising if we accept the fact that only three percent of the population will do what is necessary to succeed.

But here is something that is surprising. Our research also found the following:

  1. The failure rate is higher among those who used the Results Approach System compared to the Group Presentation System.
  2. There is a correlation between the quantity of Results Approach Volume in a Network and the rate of failure in that network.

Cause of Failure in Results Approach Systems:

Why? What is going on? Very simply this – the more volume there is in Results Kits, the more volume you have that is “potential consumable volume”.  And the more “potential consumable volume” there is in a network, the greater quantity of volume there is that will be at risk of not being converted into “actual consumable volume”.

If this potential volume is not converted to actual consumable volume there is no possibility of reorders, which means there is no possibility of residual income.

In addition we found that the less consumable volume there is, the less residual income you have and thus the more volume you have that could be a one-time purchase. This scenario always increases the potential for failure in that portion of the network where it resides.

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 Debate Over Systems – “Analysis of the Arbonne Results Approach”

Posted by on October 20, 2009 No comments

The Debate:

There is much debate within Arbonne as to the legitimacy and effectiveness of using the Results Approach to build a successful and sustainable Arbonne business. We understand this debate because Linda has Consultants in her successline who do Group Presentations, One-on-Ones and Result Approach. This is based on statistical analysis and from actual historical data within my wife’s, Linda Loveless’ Webstats. However, to be completely honest, there have been some in Linda’s and other success lines who have been negatively impacted by the Results Approach. In our research we have found there are two main reasons for this.

  1. In some cases the Consultant did not understand how the Results Approach was impacting their numbers.
  2. They were not doing the Results Approach System correctly.
  3. They did not understand the weaknesses of the Results Approach.

As a speaker and trainer I teach that long term success is always built around a system of success. As a coach for nearly 30 years I use systems to teach players and teams to perform successfully. These systems are implemented, tested in battle, and then adjusted to improve them.  Through this process they are perfected over many years. As a result, before we made any adjustments to our “Systems of Success” we would analyze how this change would impact the entire system. In some cases no matter how appealing the change(s) appeared to be, analysis revealed the change would be detrimental to the overall performance of the system of success so the changes were not implemented. The same holds true with the Results Approach. One needs to understand what changes when the Results Approach is implemented and how this impacts all aspects of the business.

Two Proven Systems of Success:

During the early days of Arbonne there were two systems that were proven to build a successful Arbonne business:

  1. Parties or what is also referred to as Group Presentations.
  2. One-On-Ones (this is really a group presentation done one person at a time)
  3. A Consultant can get in front of multiple individuals in one presentation increasing the number of new exposures.
  4. Because these group presentations are booked through another person the Consultant is gaining access to a new warm market.
  5. Most, if not all of the purchases at these events are personal orders that will be consumed. This results in reorders which is also termed Residual Income.
  6. The One-On-One System is really a Group Presentation, one person at a time. So to make it effective a Consultant has to increase the number of One-On-One appointments to equal the head count quantity that is accomplished by having 6, 8, 10 or 12 parties a month. (My wife Linda built her Arbonne business through One-On-Ones. She owned and operated a Design/Alterations business and when clients came over for a fitting she would share Arbonne with them.  Through this process she made sales and found business builders.)
  7. In both the Group Presentation System and the One-On-One System there are new Consultants or Preferred Clients continually added to the Network. As the quantity of customers in a network increases over time residual income also increases as these customers reorder.

Advantages of the Results Approach:

  1. The customer is given the product to use so they can see the Results. (Do not make the assumption that handing a person a Results Kit will automatically result in them using the product. By marking the Results Kits we could determine if they pushed the pump and we were surprised at how often people said they used the product or the product broke them out only to discover that they had not pushed a single pump. We are currently doing research to determine what the “rate-of-use” is when using the Results  Kit as opposed to a presentation or a sample pack.)
  2. It focuses on basically one product which is a definite advantage. The customer only has to consider that product and is not overwhelmed with an entire catalogue of products. And any time a customer is overwhelmed they are essentially confused and a confused mind always says NO!

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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