The Strength of Our Business Model

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As I review the many statistics that come across my desk each month, I am continually impressed by the diligence and hard work of those who are building a Melaleuca business. I am also impressed by how many lives are being enhanced by the concept of “helping people reach their goals.” But I am impressed most of all by the increasing popularity of Melaleuca products and the rapid growth of our customer base. Years ago, we put some of these statistics in a format that could be more easily understood when we began publishing our Annual Income Statistics in Leadership in Action magazine. Today, you’ll find that information in every edition of this magazine. (This month’s Annual Income Statistics are on page 64.)

The message behind these numbers is quite compelling—and that’s an understatement! They testify of the strength of our product line and the power behind the concept of “exceptional products at reasonable prices.” A prospective customer who studies these numbers will soon realize that there is tremendous merit in Melaleuca’s line of superior, more effective and safer products. The fact that there are more than 450,000 Melaleuca households in North America that purchase Melaleuca products every single month for no reason other than the fact that they want the best, most effective, natural products in the marketplace sends a resounding message.

The fact that one in nine of these loyal customers will eventually decide to build a Melaleuca business is also compelling. Sixty-three percent of Melaleuca customers receive no financial incentive at all! And another 26 percent receive a tiny commission each month because at some point in their lives, they referred a few customers to Melaleuca. It is obvious that their primary objective with Melaleuca is to receive the product—not to work the business or receive any financial reward. This is not to say that these customers do not appreciate their monthly checks (it is much better than what they receive from Safeway or Wal-Mart), but the tiny check that they receive is clearly not their main incentive for being Melaleuca Preferred Customers.

The strength of Melaleuca’s business model is that it is based on hundreds of thousands of customers purchasing better products each month at better value than the grocery store brands. The fact that 89 percent of Melaleuca customers are customers for the sake of being customers also testifies to the strength of Melaleuca’s business model and assures those who decide to build a Melaleuca business a bright and exciting future.

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Approximately 11 percent of those who have been introduced to Melaleuca products and have become Melaleuca customers eventually decide to build a Melaleuca business and invest the time and effort to reach Director status. That means they have probably spent 50 hours or more at some point in their lives introducing Melaleuca products and catalogs to prospective customers. (Although some achieve Director in a single day, we estimate that it takes the average person about 50 hours of concentrated effort, on average, to become a Director.) One might spend those 50 hours in a single week or over a period of a year or longer. A serious business builder must use time wisely. Certainly one could spend a lot longer than 50 hours on unproductive activities and still not enroll eight customers.

One could argue that a 50-hour investment does not a business make. But achieving Director status with eight to 10 customers is a good start. Customers are precious to us. We should take care of them. If we do, not only will they remain loyal customers but many will refer other customers as well. On average, four out of 10 customers will eventually refer from one to seven new customers each to your business. On average, only one out of nine will enroll eight or more customers and reach Director status.

The danger in talking numbers or percentages is that someone might make the mistake of thinking that building a Melaleuca business is somehow a game of chance or of beating the odds. This could not be further from the truth. The value of understanding the numbers is only to create valid expectations of others. The statistics indicate what you can expect others to decide to do.

As a rule, 63 percent of your customers will not refer any new customers to your business. But that will not diminish their value. As they continue to buy your products each month directly from the company, your commission on their purchases will provide valuable income that you can count on each month. On the other hand, approximately 37 percent of your customers will eventually refer at least one customer to your Melaleuca business. Many will make a small commission on the customers they introduce to Melaleuca. Sure, they are just “dabbling” and many may not develop the skills to make a good product demonstration. You will want to help them. In fact, in the beginning you should request help from your enroller in making presentations. You will learn from your enroller as you perfect your presentation skills. Then you will be prepared to help others.

As the numbers show, we value and give generous rewards to those who help us find and keep loyal customers. Superior products, reasonable pricing, generous compensation—they all work together to create the most successful business model in the marketplace. Whether you decide to be a loyal customer or a business builder, we appreciate your decision to be a part of Melaleuca! Our endeavor is to introduce superior Melaleuca wellness products to those we care about so they can have longer, more vibrant and healthier lives. Those who do that consistently will prosper with residual income that will bless their lives forever.

Sincerely,
Frank VanderSloot