Posted by Angelia-Professional
Networkers on February 19, 2003 at 20:32:29:
In Reply to: Re: 4-life posted by brad on February 19, 2003 at 04:33:08:
Hello Brad,
Nice to hear from you again. 4Life has been in business since January 1998.
The first six to nine months they were setting up and primarily marketing
to health professionals.
I would like to respond to your statement "when figures are good companies
share." That is correct to point. Companies have a tendency to share positive
information and not to share negative information.
Even companies with good track records have a tendency to spin its statistics,
especially after they have peaked. We have enrolled in more than 108 MLM companies
through various identities in order to keep up on what is the reality behind
the scenes in our industry. Now don't get me wrong we don't work these companies.
We are always gathering statistics for planning strategies and gauging the
paradigm in the market place. Mike has suggested to 4Life that they do not
release details of such statistics on a regular basis.
He has been in the industry for 35 years and has observed that companies and
distributors that spin the truth penalize honest companies. Also, he has found
that the majority of distributors or prospects do not know how to interpret
these statistics.
Being on the inside, we have had vantagepoint to know when companies spin
the truth. I will give you an example. An established network marketing company
that has been around from the 80s makes the claim that they have a 95% retention
rate. You wouldn't think that a fairly large established company would need
to spin the truth.
Here's the reality on this company. It picked a large established leg to do
the study on. The leg has a very large customer and distributor base that
has been established for a decade. The key here is that most of the attrition
has already taken place and what is left is the cream of brand loyal customers
and distributors. The measurable attrition would be coming from the more recent
enrollments.
Another hidden factor in the criteria used for this statistic is how they
figured attrition. First, the formula was that 95% of distributors/customers
that ordered this month would order next month. So the third month would be
figured at 95% or the previous months 95% of the first month. Each month is
95% of the previous month. At this rate the actual retention rate for the
year is approximately 56%. We have had a position in that particular company
and know that a friend that works in the office reported to us the overall
attrition is 85% per a 18 month period. What a spin job.
In order to capture an accurate picture of the viability of a program from
the attrition/retention perspective, one would have to break any overall statistic
down. It would be important to consider the retention rate in each tier level
of marketers. Customers should be separated out from distributors. Another
important factor is time periods. You will have different attrition rates
during different stages of growth.
The goal to any analysis should be to determine the viability of an opportunity.
Here is another example of the complexity of knowing the value of statistics.
Companies such as Morinda, Mannatech, New Vision, etc. are considered good
models for success or growth. In reality they are not positive models. There
are several types of marketing strategies. The model used by Morinda was to
find a simple product (without any significant scientific value, no more than
pineapple juice), develop a pay plan that would create millionaires as fast
as possible, develop a good story and create a rush to growth.
When Morinda produced the first few millionaires there wasn't enough volume
to justify anyone earning a million dollars. Prospects and distributors went
wild over this achievement. In reality the pay plan was designed to overly
reward a few at the expense of the majority. For an example a company produces
10 million dollars in sales and pays out 3.8 million in commissions. One person
earns more than a million dollars of the commissions leaving 99.999% of the
rest to split the other 2.8 million. Is that something to rejoice over? NO.
The poor sheep are rejoicing over their own slaughter.
Another factor to keep in mind is that marketing strategies that accommodate
the very fastest growth, generally, do not product the best retention and
long-term opportunity. When I speak of long-term opportunity, I am not only
speaking about how long the company last but how long the opportunity is viable
to the majority of its participants. Many companies keep alive through special
promotions that create growth based on “marketing magic” and not
the true value of the program to the majority of networkers involved.
Companies such as NFL, Rexall, Changes, and Enrich have flawed dynamics but
still endured much longer than the merits of the programs would have normally
supported. The Kevin Treadeau campaign for NFL is an example of a promotion
that gave NFL a few more year of life but in the end added to its demise.
Not all failed companies close its doors. Often they sell out or merge. Sometimes
they reach a peak and fall off only lay domant for a period of time and then
remake their image (Example Matol). If the company hasn't changed the basic
dynamics that originally created the problem, it is only a matter of time
before they fail again.
I could go on and on but time doesn't permit. I wish I could take credit for
this information but actual this information comes from the 1/2 million dollar
study that dad financed.
Dad selected 4Life because more of the factors lined up. We first worked 4Life
as part of our test-market and later selected it as our final quest.
As far as how many distributors there has been in 4Life, I have heard, since
4Life began, there has been approximately 250,000 distributors and customers.
We are experiencing a health growth pattern but not in compared to companies
that are primarily focused on marketing instead of a balance factors that
create long-term success for a great number of people. Angelia
Historical Study of MLM Companies and Their Annual Sales Volumes - And what Has Happened to these companies?Amway, Herbalife, NatureSunshine etc: Click here |
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