CEO Frank VanderSloot Receives Horatio Alger Award

Horatio Alger Association of Distinguished American

Last week in Washington, D.C., Justice Clarence Thomas of the U.S. Supreme Court presented Melaleuca CEO Frank VanderSloot with the Horatio Alger Award. This prestigious honor recognizes Frank as a “Distinguished American” whose work has contributed to free enterprise and has inspired people to achieve the American Dream.

Almost 30 years ago, Frank founded Melaleuca to help typical American families get ahead in life. Because of his unwavering commitment to Melaleuca’s mission of enhancing lives, hundred of thousands of families receive a Melaleuca check every month. Frank has always served as a champion of the “little guy.” Thanks to his vision, Melaleuca is successfully helping thousands of “little guys” reach their goals.

The Horatio Alger Award is given annually to accomplished American leaders who have not only overcome significant adversity to achieve success in their own lives, but who are dedicated to higher education, philanthropy, and helping others reach their dreams. Former recipients of this award are Ronald Reagan, Buzz Aldrin, Oprah Winfrey, Tom Brokaw, Dwight Eisenhower, Herbert Hoover, Tom Landry, Ray Kroc, Lou Dobbs, and Tom Selleck. A nonprofit educational organization, the Horatio Alger Association of Distinguished Americans honors these outstanding leaders while also encouraging young people to achieve their goals through higher education by providing them with over $110 million in need-based college scholarships.

Horatio Alger Association of Distinguished American

Feeding the Hungry

Boy Scout Food Drive

Melaleuca CEO Frank VanderSloot looks over stacks of donations raised during this year’s Scouting for Food drive and takes a photo with a young Boy Scout volunteer and two leaders from the BSA’s Grand Teton Council.

Did you know that Melaleuca has helped to raise 2,350 tons of food and served hundreds of thousands of families in need? For 25 years, we’ve supported a cause that’s delivered more than 7.5 million canned items to local food banks.

Boy Scout Food Drive

Boy Scouts throughout Southeast Idaho and Western Wyoming led a successful food drive on Saturday that produced hundreds of thousands of canned goods for local food shelters and pantries. Melaleuca has sponsored the Scouting for Food drive for the last 25 years.

Melaleuca has served as the lead sponsor for the Scouting for Food drive in partnership with the Boy Scouts of America (BSA)’s Grand Teton District. This service project covers all of the communities spread throughout Southeast Idaho and Western Wyoming. Organizing this annual event is no small feat. The Scouts recognize that 32,000 hours are typically volunteered by 10,000 youth and adult leaders each year.

As the main sponsor, Melaleuca assumes all of the food drive’s costs. It builds awareness with the public by advertising the event and developing promotional materials that go to roughly 200,000 households. Because of Melaleuca’s efforts, people know when to leave a donation on their front porch for a Boy Scout to pick up for the food pantry.

Melaleuca CEO Frank VanderSloot has supported Scouting for Food ever since it began in 1989. “Hunger is a problem we can do something about by working together. This meaningful project plays a role in helping hungry children and providing nutrition to the disabled, the elderly, the homeless and the unemployed. It’s motivating to watch the community’s tremendous response to this event,” he said.

Fortunately, people gave generously once again. This year’s Scouting for Food drive raised more than 390,500 canned items. You can read the full story at here.

Ice Bucket Challenge Dumps Millions into ALS Fight

Thanks to the power of social media, a freezing-cold fundraiser and awareness campaign is now completely on fire.

The Ice Bucket Challenge encourages people to dump ice water on their heads and donate money to spread the awareness and aid in the research of amyotrophic lateral sclerosis (ALS), a progressive neurodegenerative disease more commonly known as Lou Gehrig’s disease.

To put it plainly, the challenge successfully combines the elements of a silly dare and an extremely worthy cause. In a matter of weeks, 1.7 million challengers have donated nearly $80 million to the ALS Association (link to alsa.org), a national non-profit dedicated to ALS awareness, care service and research.

The challenge has become a viral online phenomenon as supporters have used social media both to share their frigid experiences and enlist people they know to do the same. One challenger becomes three, three become nine, and so on.

Because of its immense online presence, millions of people—the general public and celebrities alike—have heeded the call either to dump ice water on their heads or open up their wallets. Many have elected to do both. As the Ice Bucket Challenge continues to spread, there is no telling how much money it will raise.

According to the ALS Association, the disease attacks nerve cells in the brain and spinal cord, resulting in a loss of voluntary muscle control and movement, and, in many cases, total paralysis. On average, people live two to five years after being diagnosed with ALS, and over 5,600 people are diagnosed every year.
Melaleuca supports the ALS Association and its mission to treat and cure ALS.

Have you taken the ALS Ice Bucket Challenge? Please send us a link to your video and we may feature it on the Melaleuca YouTube channel.

The following are just a few examples of Melaleuca employees and friends who have accepted the Ice Bucket Challenge:

Watch as Melaleuca CEO Frank VanderSloot accepts the Ice Bucket Challenge and invites others to do the same.

Melaleuca Chief of Staff Cole Clinger accepts the Ice Bucket Challenge

Melaleuca Senior Vice President of Sales Darrin Johnson accepts the challenge.

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

Once You “Get It” You’ll Focus More On The Products

A MESSAGE FROM CEO FRANK VANDERSLOOT
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Melaleuca is becoming known around the globe as the world leader in wellness products. A combination of the company’s focus, bright scientists and good fortune has thrust Melaleuca into the spotlight as the company has introduced one lifechanging product after another. There are almost too many products to keep track of—over 360 in total, all derived from natural ingredients combining the most powerful resources of nature and science. There is so much to learn! Sometimes it seems like too much for any one person to try to comprehend.

Melaleuca’s exceptional products continue to propel the company toward unprecedented growth. Hundreds of thousands of American and Canadian households have been converted to the Vitality Pack®, GC Control™, Phytomega®, ProvexCV®, Diamond Brite® and The Gold Bar®. A host of Sei Bella® products have found their way into the vanity cabinets of tens of thousands of discerning women who not only care about how they look today but are taking measures to keep their skin healthy and young to ensure they will still be looking great 30 years from now. These people understand the importance of good nutrition and quality products for their health today as well as tomorrow. Wellness is important to them.

Thousands of new customers join the Melaleuca family every month, and, in the process, those who consistently spread the good news of Melaleuca’s exceptional products prosper. The degree to which many of these families are prospering is truly amazing. Melaleuca has already paid out over $3.5 billion in commissions—yes, that’s billion with a B—to those who’ve referred Melaleuca products to their friends and neighbors. Thousands are supplementing their full-time incomes with this part-time Melaleuca business and providing an additional $300, $500 or $1,000 per month to their family budgets. They are prospering because they have dozens or even hundreds of customers who purchase Melaleuca products month after month.

Many extra-industrious Melaleuca leaders earn hundreds of thousands of dollars per year and several Corporate Directors have now exceeded $1 million per year. And it’s all because of the products. These people are prospering because they have thousands of loyal customers who buy their Melaleuca products month after month.

Melaleuca has established itself as the best, most viable, most lucrative and most dependable financial opportunity in North America.

We are thrilled with the success that so many Melaleuca Marketing Executives are enjoying and with the literal fortunes that are being made by those marketing Melaleuca
products. The success of these very hard-working people is very fulfilling for me.

At the same time, I am concerned about a new element that has started to develop within the ranks of some of our newest business builders. Most of those to whom I am referring were previously with multilevel companies. We have always had a few people with multilevel backgrounds coming to Melaleuca each month. But now they are coming in substantial numbers because they have heard about the money! And that is part of what is causing the problem. Many with MLM backgrounds haven’t taken the time to learn about our exceptional products. In fact, many of them skip right over learning about the science behind the Vitality Pack or GC Control or Diamond Brite. They are more anxious to learn about the money! And therefore, all they are telling their friends about is the money! Since they haven’t studied the product line themselves, it is impossible to tell someone else much about the products. But they are enrolling “people” like crazy—because of the “business opportunity.”

These well-meaning people are teaching the paradigms that they learned at the multilevel company they just came from. They think it’s the “compensation plan” that will attract people to join up with them. In fact, they don’t even talk about enrolling “customers”; they talk about enrolling “people” or “getting people in.” They openly state they are not looking for customers. They are looking for “business builders.” In other words: They just don’t get it! They do not realize that the reason for Melaleuca’s exceptional growth is because of our products. They don’t understand that the reason that Melaleuca has outpaced all the direct-selling and multilevel companies in America is because of the products. Of course, we do have a spectacular business opportunity, but it’s important to note that people only earn commissions when their customers buy products. And since no one is allowed to buy huge quantities of inventory at Melaleuca, customers only buy the products they can use on a monthly basis. In other words, to make money, a businessperson needs lots of customers purchasing only a little each month.

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Please understand: Business builders without customers are without merit! Unfortunately, this statement doesn’t hit home for the true, dyed-in-the-wool multi-levelers. They have always been taught to just go after business builders. Someone who does not want to work the business is of little value to them. They would rank someone who is “just a customer” as lower than swamp scum.” I know I am repeating myself, but I’ll say it again: They just don’t get it!

Many of our friends who were formerly with multilevel businesses are wise enough to recognize the difference between Melaleuca and their old company. They see the folly of using multilevel terms and of seeking only “business builders.” But too many just don’t get it!

I feel a sense of urgency to communicate to these thousands of former multilevel marketing executives who “don’t get it,” because if they continue to operate Melaleuca like a multilevel business, they will end up with the same results as found in all multilevel companies. Their businesses will grow rapidly at first with all of the excitement created by the money story—and then they will start to crumble because their businesses were opportunity based and not product or customer based.

A company’s reputation determines its future in the marketplace. Consider Amway’s and Avon’s reputations across the United States and Canada. Avon consistently has enjoyed a great reputation, but people everywhere cringe when they hear the word “Amway.” Why the difference? Because of the approach these companies have used when approaching prospects. Avon used a product approach. Avon became known for great, fun products and the friendly Avon lady. Amway became known as “that money deal.” Amway slowed down long ago in the United States and is in a free fall in many nations around the world. It’s not that Amway people are bad people. They are great people! They just used an approach that turns most people off.

I am asking our Marketing Executives across the company to protect our good name and stop using multilevel concepts and multilevel terms to describe our business. Statistics show that over 60 percent of the people in the United States have a negative opinion about multilevel companies and only 5 percent are interested in developing a home-based business. But 95 percent are interested in buying quality products from a catalog! Those who are only interested in business builders are passing up 90 percent of the market potential and are giving Melaleuca an undeserved “multilevel-like” reputation in the marketplace.

We need to make sure our presentations are focused on products first, not opportunity first. Make sure it is clear you are looking for customers first and business builders second. Talk about enrolling “customers,” not about enrolling “people.” Make sure you get rid of multilevel terminologies like “upline,” “downline,” “pin level,” “ground-floor opportunity” and “getting in.” These terminologies are multilevel concepts that make it appear like we are offering some scheme, gimmick or program. They are not business concepts. If we use gimmicks or multilevel terminologies to discuss our business, people will get the wrong impression. Let’s not do it! It’s not who we are and not who we want to be!

Any great businessperson knows that all of the revenues come from moving product to end consumers. Those who do that will consistently prosper. We have a fantastic business opportunity for those who understand our future is bright only because of our exceptional product line. Those who put Melaleuca’s exceptional financial opportunity in front of Melaleuca’s
exceptional products will have left out the most powerful ingredient in building a blossoming Melaleuca business. The money is exciting, but it only comes to fruition when people have hundreds of loyal customers. And you will not have loyal customers unless you take time to explain some of the science behind Melaleuca’s products.

We welcome the thousands who were formerly with multilevel companies. We hope that you will find a home here after you recognize that the only reason we are successful is because our products are of better quality and better value than anything else available anywhere in the world. We hope you will value every customer and communicate their importance to your success in every presentation. If you do this, you will prosper and you will gain the respect of those around you because they will realize that, after all, you really do get it.

Sincerely,
Frank VanderSloot

A Message From Frank VanderSloot Chief Executive Officer

frank vanderslootOver the years, I have talked to many who say they are surprised at Melaleuca’s unprecedented rise in the marketplace. They often ask what the secret is to our success. The answer is simply that we have much better products than the grocery store brands. People want to live healthier, longer, and more vibrant lives. They find Melaleuca products are a great asset in achieving those goals. Melaleuca is quickly becoming the world leader in quality wellness products.

The reason hundreds of thousands of families are choosing Melaleuca products over the grocery store brands is quite simple. Many manufacturers are yielding to the tremendous pressures in today’s marketplace to cut prices and therefore cut quality. Wal-Mart and other national chains control the distribution channels. Even companies like Procter & Gamble are placed under tremendous pressure to cut prices in order to get shelf space in the stores. They are forced to lower their price on the one hand and to maintain profit margins on the other. The only answer for these manufacturers is to cut costs by using cheaper ingredients or diluting their products with cheap fillers such as water. The trend for many manufacturers to dilute products has gotten so bad that Wal-Mart announced that regardless of the price pressures they put on manufacturers, Wal-Mart would not carry any laundry products with less than a 2x concentration, which is twice as concentrated as these products were previously. Procter & Gamble responded by finally bringing its products (like Tide®) up to the minimum 2x standard and advertising their “improvement” on national TV. Quite frankly, we are not very impressed. Melaleuca’s products have always been more concentrated than Wal-Mart’s new “standard.” In fact, Melaleuca’s MelaPower was at 3x concentration for more than 20 years and it’s now concentrated at 6x.

The demand for these superior products makes building a Melaleuca business even more profitable and more rewarding. This brings up another good reason for you to buy Melaleuca products. Because when you purchase Melaleuca products, you are not buying from the wealthy owners of Wal-Mart, Lever Brothers, or Johnson & Johnson. You are actually buying from the family or friend that introduced you to Melaleuca. In other words, instead of buying from the corporate giants, you are buying from “the little guy.” In most cases it is from someone you know. Almost all of our 350 products are significantly superior in effectiveness, quality, and safety to any of our competitors in the marketplace. There are hundreds of very good reasons to choose our products over the grocery store brands. Reducing costs by diluting products with water or other fillers is not the only way that national brands violate their customers’ trust. Compromising quality ingredients to save a buck is also prevalent in many of the grocery store brands. When people are dealing with their health, they don’t want to make compromises. And they know that Melaleuca will never compromise on effectiveness or safety. Because of the constant pressures of the mass manufacturers to lower price and quality, the demand for Melaleuca’s superior and far more effective products is on the rise.

So thank you for your loyalty to Melaleuca’s wellness products. We promise to keep our commitment to always provide the best so you can have a healthier, longer, and more vibrant life.

Sincerely,
Frank VanderSloot