ONCE YOU "GET IT" YOU FOCUS MORE ON THE PRODUCTS

President's Message By
Frank L. VanderSloot
President & CEO

September 2005

It’s hard to believe that we are already celebrating our 20th year of delivering wellness products to the world. Melaleuca’s exceptional products continue to propel the company toward unprecedented growth. Hundreds of thousands of American and Canadian households have been converted to products like the Vitality Pack, ProvexCV, Phytomega and the Gold Bar. A host of Nicole Miller 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 insure they will still be looking great thirty years from now. These people understand the importance that good nutrition and quality products provide toward their health today as well as tomorrow. Wellness is important to them.

Thousands join the ranks of Melaleuca’s loyal customers every month and, in the process, those who consistently spread the good news of these exceptional products prosper. Some of those who are prospering have been with us almost since our beginning 20 years ago. Others have been with us for only 4, 6, or 8 years. Others have just joined us in the last year or so. The degree to which many of these families are prospering is truly amazing. To me, thousands are supplementing their full-time income with this part-time Melaleuca business and providing an additional three hundred, five hundred or a thousand dollars per month to the family budget. They are prospering because they have dozens or hundreds of customers who buy from them each month. Others are making hundreds of thousands of dollars per year and three Corporate Directors have now exceeded one million dollars per year. They are prospering because they have thousands of loyal customers who buy their products every month.

We are thrilled with the success that so many Melaleuca Marketing Executives are enjoying and with the literal fortunes that are being made by marketing Melaleuca products. Their success is very fulfilling to 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 that I am referring to were previously with multi-level companies that are currently in trouble or out of business. We have always had a few people with multi-level backgrounds coming to Melaleuca each month. But in our early years it was only a few dozen or perhaps a few hundred each month. Now thousands with multi-level backgrounds join us each month. They are coming because they have heard about the money! And that is part of what is causing the problem. Many do not join us because of our exceptional products. In fact, many of them skip right over learning about the science behind the Vitality Pack or ProvexCV or Replenex or Melapower. They just heard about the money! And therefore they are telling their friends about 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 “customers” like crazy—because of the money opportunity. These well-meaning people are teaching the paradigms that they learned at their last multi-level company. 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 don’t get it! They do not realize that the reason Melaleuca has out-paced all the direct selling and multi-level companies is because of our products. Of course, we do have a business opportunity, but people only earn commissions when their customers buy products. And since no one is allowed to buy huge quantities of inventory, customers only buy the products they can use this month. In other words, to make money you need lots of customers purchasing only a little each month.

Please understand: Business builders without customers are without merit! Unfortunately this statement just doesn’t hit home to 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 him. He would rank a “customer” as “lower then swamp scum.” I know I am repeating myself but I’ll say it again: He just doesn’t get it!

Many of our friends who were formerly with a multi-level business recognize the difference between Melaleuca and their old company. They see the folly of using multi-level 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 multi-level marketing executives who don’t get it, because if they continue to operate Melaleuca as a multi-level business they will end up with the same results that they had with their former multi-level company. Their business will grow rapidly at first with all the excitement created by the money story—and then it will start to crumble because their business was opportunity based and not product or customer based.

A company’s reputation determines its future in the marketplace. Consider Amway’s and Avon’s reputation across the U.S. and Canada.  Avon has a great reputation but people everywhere cringe when they hear “Amway.” Why the difference? Because of the approach these companies have used when approaching prospects.  Avon used a product approach. Amway used an opportunity approach. Avon became known for great, fun products and the friendly Avon lady. Amway became known as “that money deal.”  Avon is still growing and benefiting from its great name in the marketplace. Amway slowed down long ago in the U.S. 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 multi-level concepts and multi-level terms to describe our business. Statistics show that over 60% of the people in this country have a negative opinion about multi-level companies and only 5% of people are interested in developing a home-based business. But 95% are interested in buying quality products from a catalog! Those who are only interested in business builders are passing up 90% of the market potential and are giving Melaleuca an undeserved multi-level reputation in the marketplace.

We need to make sure our presentations are product focused, not opportunity focused. 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 your old multi-level terminologies like “upline” “downline” “pin level” and “ground floor opportunity.” We should avoid terms like “get in” or “Melaleuca works.” These terminologies are multi-level concepts that make it appear like we are offering some scheme, gimmick, or program. They are not business concepts. A Buick dealer would never ask another Buick dealer “When did you get in?” He may ask “When did you start your business?” or “How long have you had your dealership?” but never “When did you get in?” They would also never say to each other “Buick really works.”  Such a concept would be foreign to them because they are business people. If we use gimmicks or multi-level 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!

We welcome the thousands who were formerly with multi-level 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 our 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 you really do get it.

Sincerely,

Frank L. VanderSloot

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