CHANGING LIVES WITH CONSUMER DIRECT MARKETING®
In 1985, a modest company set up shop with nine employees and eight exceptional products. And although the company’s opening in a tiny strip mall in southeast Idaho was accompanied by little fanfare, Melaleuca Inc. was about to innovate a concept that would revolutionize the way hundreds of thousands of customers and entrepreneurs do business.
CONSUMER DIRECT MARKETING, the concept of partnering with Marketing Executives rather than advertisers and retailers, is what set Melaleuca apart from other companies in 1985 and what continues to make it stand out today. Chances are, whether you know it or not, Consumer Direct Marketing probably played a significant role in attracting you to Melaleuca.
When brand-new customers hear about Consumer Direct Marketing today, the concept sounds intuitive—the sort of thing that leaves you wondering, “Why didn’t anyone think of this before?” But to most of the business world, even in an age when word-of-mouth advertising is increasingly popular, Consumer Direct Marketing is a radical idea that most companies refuse to even experiment with.
“The idea that we would share, or that any company would share revenue with its customers is unheard of,” CEO Frank L. VanderSloot told the audience at Melaleuca Convention 2012. “No major marketer
could afford to do that. Even if they tried to share their profits with their customers, the shareholders and board of directors would step in and say, ‘That money is ours.’
“But what an awesome model this is for us to share with the people who buy from us, to allow them to have a business of referring customers to us, to have everybody prosper together. It’s a unique idea that is changing the game.”
“I like Melaleuca products, and I think you get more for your money,” says Tamara Driscoll, a 25-year Melaleuca customer from the small town of American Falls, Idaho. “You just have to experience them for yourself and you realize they’re better than what you get at the grocery store.”
For a business to be sustainable, it must provide products that customers really want. Right from the beginning, Melaleuca’s products provided healthy, natural alternatives to the products you’d find at the local grocery store. Customers redirected their shopping dollars from the grocery store to Melaleuca, and in exchange, they received a healthier, safer and more effective product.
“We trusted in the superiority of our products and had faith that they would generate enough excitement for people to talk about,” Frank says. “We simply formulated exceptional products we knew customers would love to share with others.”
At Melaleuca, you aren’t required to purchase more than you need each month. On the contrary, Melaleuca encourages customers to purchase only what they’ll use so they can then purchase products again the next month. As a result, approximately 95 percent of customers who shop at Melaleuca on any given month will shop again the next month.
What no one anticipated in 1985 was how big-box retailers would someday change the consumer products landscape. It’s no secret that the Walmarts and Costcos began giving customers products at lower costs, but those price reductions needed to come from somewhere. Under pressure from retailers, manufacturers looked for shortcuts to reduce their costs—using cheaper ingredients, including fillers, etc.
Once again, Consumer Direct Marketing® gave Melaleuca an unforeseen advantage. Instead of competing with other manufacturers for space on the store shelves, Melaleuca ships products directly to customers. And because it controls almost the entire process from production to delivery, Melaleuca is under no pressure to water down its products.
“Where else can manufacturers cut costs?” Executive Director III Paulette Magaw says. “They start using more diluted, watered down and nonfunctional ingredients. But Melaleuca, on the other hand has drawn a line and said, ‘Our products are going to use premium, worldclass ingredients.’ Most big-box store customers don’t even think about what’s going into their products; they just go to the
store and throw things in their carts out of force of habit. But an educated consumer will make better choices.
“The value of our products is not in what we say about them; our job is really to create enough curiosity for customers to see the value in making the purchase. The value in the products is how they perform, and our products are safer, healthier and more effective than other brands.”
There’s another advantage to Consumer Direct Marketing: It’s convenient. Instead of taking hours out of her day to drive to the store with three children in tow, a mother can simply jump online, shop at Melaleuca.com and receive a package a few days later without ever leaving her home.
“I tell customers, ‘Shopping at Melaleuca is a bit like a Sam’s Club® or a Costco®, but we’re more like Amazon® shopping,’” Executive Director II Theresa Buckley says. “These days, everyone has some experience with shopping online. And with the products Melaleuca has, I can’t imagine how many different places or websites I’d need to go to get similar products. It would take hours, but instead it takes maybe 20 minutes at Melaleuca.com.”
The benefits of a Preferred Customer membership don’t stop there. Melaleuca has used its enormous customer base to negotiate for hundreds of discounts on services (such as Melaleuca Home Security, Lifelock® Identity Theft Protection, etc.) and through online retailers (such as Nike®, Target®, Adidas® and more).
“It’s more expensive to not be a Melaleuca customer,” says Executive Director VIII Steve Gordon, who recently saved thousands of dollars on his life insurance policy through Melaleuca. “Our next-door neighbor is a Director III who saved $600 a year on his homeowner’s insurance—that just about covers the cost of his Melaleuca product orders. If you’re using Melaleuca’s services, you can offset the price of your products even if you aren’t building a business.”
The Little Guy
If a Preferred Customer membership entitled customers to nothing more than fantastic products and services, that would be satisfying enough for hundreds of thousands of families around the world. But for thousands who are also Marketing Executives, Melaleuca is much more: It’s an opportunity to add to their household incomes.
“I love that we can share these products and this business with anyone,” Executive Director VIII Lynn Crescenzo says. “It doesn’t matter what their background is, I can look them in the eye and honestly say, ‘I have something that can really help you.’ We’ve given hope to a lot of good people who really need hope.”
Frank’s vision for Melaleuca 28 years ago was to create a company that would give “the little guy”—the average family—an opportunity to get ahead, and that’s exactly what Melaleuca is. It’s accessible to anyone who’s willing to invest the time and effort to build it.
“That’s been a real motivator for us at Melaleuca: to help the little guy get ahead,” Frank has often said. “And I think we have a vehicle that can help people have a great life if they apply it.”
The beauty of having a business rooted in Consumer Direct Marketing® is that your income relies heavily on the actual purchases and consumption of products by real customers. So, while you might share a presentation with or refer a few customers once, you’ll continue to receive income from the purchases of those customers for as long as they continue to shop with Melaleuca. And because
approximately 95 percent of customers who ordered last month will order again the next month, your Melaleuca business can provide a reliable source of residual income.
“The average family is spending a lot of money each week on household consumables,” Executive Director V Frances Martin says. “When you walk into Walmart® and spend your money there, who do you think benefits? The manufacturer, the advertiser, the stockholders and the store—those four entities all benefit from your purchase, and that’s how business has been done in the United States
“What Melaleuca introduced in 1985 is a partnership with Marketing Executives who are also customers. And when you shop at Melaleuca, they take revenue from that purchase and share it with seven families.”
A Rewarding Business Model
When Melaleuca opened for business, Frank hoped it would help families add a few hundred, or even a few thousand dollars to their household incomes each year. But today, hundreds of “little guys” are bringing home six-figure incomes from Melaleuca, and a few are earning more than $1 million each year.
“We’ve earned $9.7 million so far with Melaleuca; it’s amazing what we’ve accomplished, and we owe a big thanks to Melaleuca,” Corporate Director III Mark Atha says. “At Melaleuca, our commissions
are paid based on the sale of product to the end consumer.
Melaleuca rewards the producer—the person who is most responsible for referring that customer and helping others do the same.”
A Melaleuca business is an entrepreneur’s dream come true. It’s a business that doesn’t require you to take out a loan for an enormous upfront investment, rent storefront property or get an MBA. It doesn’t involve hawking overpriced or impractical products, keeping an inventory or any of the other drawbacks inherent in multilevel marketing.
It’s a business you build from home by sharing products that are effective, that address real wellness needs and that leave customers healthier and happier. It’s a business of helping others change their lives and achieve their dreams. It’s an opportunity to create freedom, achieve financial stability and give your family more of what matters most.
“This is the most noble profession on the planet because you end up enhancing and changing people’s lives,” Corporate Director VI Alan Pariser says. “A Melaleuca business is the one place that I know of where the little guy, if he works hard, can build a business that will take care of him for the rest of his life.”