Were the Distributors of Melaleuca Or the Company at Fault in the Lawsuit?
Fourteen distributors sued their uplines and the company because they stated that they inflated, and misrepresenting the distributor retention rate. Now, a lot of people in the MLM industry look at the companies retention rate as a way to measure growth and success. I will say that, to lie about known facts is wrong and to tell people it it is better than what it is to entice people into the company is wrong. Now, I will say that the burden of any company can not control the retention rate, unless it is because they deliver a sub-par product, or they do not compensate the individuals for what they earn. Now, I also find it interesting, because the upline can not control the retention of people, because if your people are not building the business, and not working, of course you will have a low retention rate.
I will say that the information from the company has to be accurate, because they are the ones sharing the information, and sometimes, inaccurate information is worse than giving the real information. Now, this is where I believe the company was more at fault, because in a 1979 lawsuit, Amway said they had a 50% retention rate. Well Melaleuca decided, they wanted the numbers to look better, so they said it was like 94%. Now, the fact on the number being reported and someone could have misunderstood, was that the company posts that 95% of the customers that order this month will likely reorder next month. This is not retention, this is reorder rate. Now, anyone can skew the number because a lot of the Melaleuca clients are put on an automatic shipment and the customer sometimes does not know it due to distributors not disclosing it, and the fact that you must have an order to be paid as a distributor. Therefore, sure distributors will be setting up and having orders.
But, here is what I want to say about Melaleuca and all other network marketing companies or multi-level marketing companies. If you truly want to have high retention numbers, face the facts. Facts, man, just the facts. We know people are looking to make money, and they are tired of being taken advantage of. Now, because they are tired with the corporate structures out there and do not want to work more hours and be paid less, they look for options and yes network marketing is attractive, but it also has killed many peoples belief, due to the fact of unethical practices. This is where I want to encourage Melaleuca distributors to make a change in the industry.
I know that you are bringing people into your business from all walks of life and educational experiences. A 20 year old young lady, a gentleman that worked in technology, and a housekeeper, may decide they want to work with your company. Now, this is great, but who are you and what is your experience to help someone? Now, maybe you have had a business in auto sales, insurance or real estate, and you learned to market and you are very successful. You need to teach those people coming to you how to market. That is the key word in the industry, it is network MARKETING, or multi-level MARKETING. No you do not need to be a sales person, their is a difference. If you attack it from sales, you will be very unhappy. In sales, you are trying to convince someone to do something they really do not want to do and part with something they do not want to part with. In most cases, it is money. In marketing, you need to help someone that has a need, want or desire find what will take away that need, want or desire. Now, what would happen if you lived in a dessert and someone came up to you and was thirsty. You have a business where you sell sand. You have a big supply, are you going to give that person a glass of sand once he gives you the money? I hope not. That is someone in sales. Now, the marketer on the other hand, may not have water, but maybe has a soda, or tells the person, I am sorry, I can not assist you, but my neighbor, John, has a well that has the freshest water on the face of the earth. This is where even because you did not get a sale, you still helped the person. Now, that person will remember and when he decides to build a home and needs sand for the cement may come back to you.
Now, this is what you need to do in your company and in the industry. Help provide the solutions to those that need your products. So that is where I tell you get help on the marketing side. Now, just because you learned to market back in the 70’s, does not mean you know everything in marketing. You need to learn new ways with new tools that have come out since then, so you can help your people find the right group that wants what you have. Now, here is why I say take ownership for your downline. Do not teach the old school methods, make sure you invest in you and then you can help them better.
Network Marketing is very much about helping others and finding the people you can help. If you can teach people how to find those people who want your product and you help your team duplicate this, people will be growing their businesses. No one will care about some number, the only number they should care about is their business growing, and if it is growing, are you helping people on your team! If you are, you are retaining your team.
Most people do not get this. Find someone like myself who is willing to help you learn what you do not know. There is a saying “you don’t know what you don’t know, and you won’t know until you do’. What is it about your business that you don’t know? Be honest with yourself on struggles you are having.