MYTH: North American sales have shrunk in the last 15 years

I've today come across yet again an Amway critic claiming that Amway/Quixtar North American sales have declined in the last 15 years. I suspect this Myth comes about because Amway in North America used to report their sales data as "estimated retail sales", ie as if the products had been sold at recommended retail price (RRP). The reality is that a lot of products are not sold at RRP – IBOs either use them themselves or may sell at less than RRP. Today, Amway, Quixtar, and Alticor report their sales as actual sales, ie the price the products were sold to IBOs at.

So what's the truth about sales growth?

In 199 Amway reported global estimated retail sales of $2.2 billion. In today's reporting terms that's approximately $1.7 billion. Adjusting for inflation, it's $2.4 billion.

In 25 Amway reported global sales of $6.4 billion. So, even accounting for inflation, that's 167% growth globally.

Now, that's not just North America, Amway was in 2 countries in 199, and googling shows Japan alone did half a billion, so, inflation adjusted, $1.7 billion was North America plus 17 other markets, compared with North America doing $1.1 billion alone in 25. A decline in sales would require the combined sales of those 17 other markets to be less than $6 million. Highly unlikely!

Or another way of looking at it –

In 1995 DeVos reportedly said North America accounted for 3% of Amway sales. In 199 it would probably have been higher, and today it is obviously lower Around 17%), but if we take that 3% figure it would be $72 million in sales in 199 (that's adjusted for inflation and in today's reporting terms). This would mean North American sales have grown 53% in the last 15 years.

Now, North America probably accounted for a bit more than 3% of sales in 1995, but not enough to go from 53% growth to "no growth" as some claim.

Myth BUSTED

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A few words on branding and some advice for IBOs

What is a brand? Buildingbrands.com has I think the simplest and best definition I have come across -

"A brand is a collection of perceptions in the mind of the consumer."

Our business has a number of "brands" – Alticor , Quixtar , Amway , Nutrilite to name a few. What perceptions do those brands raise in the mind of the consumer? For most people, Alticor has little to no brand recognition. It's too new and few have heard of it. I encountered one video that attempts to define the brand: Alticor – Helping people lead better lives. I've no information and when and where, if ever, this video has been used, so, while it's a great video, it has no effect on the mind of the consumer. Quixtar recently launched an advertising campaign with two TV spots Quixtar – The Land of Will and Quixtar – Won't Becomes Will as part of an effort to define the "Quixtar brand". Along with these are ads supporting Quixtar's best selling products, Nutrilite. The Nutrilite – Package and Nutrilite – Plant Tour advertisements quite obviously try to raise the perception of "natural" in the mind of the consumer when they encounter the brand Nutrilite.

But what of the fourth major brand, Amway ? It's the best known brand, with the longest history. Indeed, for many people who encounter Quixtar or Alticor, which raise few perceptions, once the companies' links with Amway are known, it's the perceptions of Amway that take the place in the mind of the consumer. What perceptions are raised in their minds when they encounter that brand? Alticor recently released some Amway branding ads in Michigan  but it's obvious these are targeted to the Michigan voter more than the consumer. For consumers, though, there is indeed a "collection of perceptions". Some perceptions may include "great products" or "good business". Others might be "pyramid", "scam", "cult". Others might be "door-to-door selling" or  "American Way".

How did these perceptions arise? Who defines the Amway brand? Historically, the Amway model has relied on very little traditional marketing. Few TV or magazine ads, few billboards or radio spots. The brand is defined by it's representatives, Amway and Quixtar Independent Business Owners.

Every time you encounter someone with good things to say about Amway or Quixtar and/or their products – ultimately, these are perceptions created by IBOs.

Every time you encounter someone with bad things to say about Amway or Quixtar and/or their products – ultimately, these are perceptions created by IBOs.

Every "negative story" on the Internet – a perception or experience ultimately created by an IBO.

Every "postive testimonial" on the internet or on tape or CD – a perception or experience ultimately created by an IBO.

A message for IBOs

The perception of our corporate brands, Amway, Quixtar, Alticor and product brands like Artistry, Nutrilite, SA8, L.O.C etc are our responsibility. When you encounter someone negative to our opportunity or products – it's our fault. When you encounter someone with a positive view of our opportunity or products – that too is our "fault"! We are responsible for our brand's image.

Now, active IBOs know that, on average, usually no more than 1 in 4 or 1 in 5  of the people we present our opportunity and products to are interested in pursuing things further. So if you show a hundred reasonably "qualified" people, then 2 or 3 might be interested. Furthermore out of that 2% who are interested, few actually do much, and it's likely only 3% will renew the following year. But still, out of those 2 or 3 and then 5 or 6, you can generally build at least a Platinum business, earning you $5,/yr.

It's possible to look at this and interpret it as meaning that of all the work we do, only 6% of it leads to us earning an income, that the rest of it is just "running the numbers" to find that 6%. In my mind, this view is wrong. How many of those hundred people we have shown the opportunity to have never heard of Amway, or Quixtar, or Multi-level Marketing? These days, it would be very few, particularly in older markets like the United States or Australia. Those prospects each have perceptions that have been created by their earlier experiences. Those perceptions will quite evidently affect their response to your presentation.

What perception do you want them to have ? Do you want them to have encountered an IBO who harassed them to try and sign them up? Do you want them to have encountered an IBO who tricked them in to coming to a meeting? Do you want them to have been told they were a "broke loser" for not joining? Do you want them to have been lied to about the connection between Amway and Quixtar? What about if they had been an IBO before, perhaps part of the 7% who do little and don't renew. What experience do you want them to have had? Did they feel pressured to spend money they didn't have or buy products they didn't want? Made to feel guilty for missing a meeting they couldn't make? Did they feel they were more part of a religion than a business? Were they made to feel like losers or failures if they decided not to renew? 

You get the picture.

What do you want your prospect to have experienced before? What "collection of perceptions" do you want that person to have when you say "Quixtar" or "Amway" to them? Now, maybe if you just want to make a "fast buck", then you don't care. But most people join Amway and Quixtar with a desire to build a long-term, profitable business. Someday, people you have shown the business to who say "no" will be shown the business again. Maybe by somebody in your downline. Maybe even yourself.

Your business depends on the brand image IBO's develop. You do not get paid only for the 6% of people you show the plan to who actually do anything – you get paid for 1% of your work. But 94% of the work you do is building the Amway and Quixtar brands.

Are you an IBO for the short-term or the long-term? What brand do you want to represent? What brand do you want your downline representing? The future is in your hands. Every time you talk to a prospect. Every time you deal with a customer. Every time you work with your downline. Build the brand. It's what you'll get paid for.

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Quixtar Sales data delayed

Alticor, and it's subsidiaries Amway and Quixtar, typically announce their yearly sales data at this time of year. Instead, an accounting change has been announced –

Quixtar Annual Sales Announcement

Corporate changes result in new financial reporting timeframe.
In past years, Quixtar has typically announced its annual sales in October based on the September 1 to August 31 performance year established for Independent Business Owners (IBOs). 

While the company has not changed the timeframe for which it recognizes IBO achievements, it has changed its own financial reporting schedule as part of a larger shift made by parent company Alticor Inc. For tax reporting reasons, the companies now follow a calendar year for reporting financial performance. 

As a result, Quixtar will not announce its corporate financial performance until after the New Year.  At that time the company will announce sales for 26 calendar year as well as sales reported for September through December 25.  After that, sales will be reported for each calendar year (which would not necessarily correspond with the IBOs' performance schedule). 

I'm sure critics will have a field day interpreting the meaning behind this! In the meantime, let's have some fun with a new poll. What will Alticor's 26 "Calendar Year" Sales Data be like compared to the 25 "IBO Financial Year" data? Vote to the left!

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Helping IBOs Succeed

The letter below was "leaked" and published on another site. I think it's content is so important that it deserved to be republished here.


 October 19, 26

To qualified Diamonds, LOA Heads, and Business Managers

During the first week of October, the Board of the Independent Business Owners Association International met with Quixtar leadership to discuss the future of our businesses. One important result was reaching a consensus about our shared priorities and strategic direction, which is summarized below.

The Tactics May Change but the Values Remain the Same: Helping IBOs Succeed

Our Foundation

Quixtar's purpose is to help IBOs in their Quixtar businesses, to help people live better lives through independent business ownership. Everything we do is designed to help improve and create a better Quixtar business opportunity for IBOs at all levels. Our relationship with the Independent Business Owners Association International should be built on the shared commitment to improve the business opportunity that connects all of us.

Our Strategic Direction

We want to dramatically grow this business and improve IBO profitability. While our business could continue as it has with modest, incremental growth, we are committed to improving the business for every IBO, growing it to a new level. We are confident that Quixtar and IBO businesses can double in size in the next five to seven years.

To achieve unprecedented growth, we all need to do things differently. We've worked with McKinsey & Co., a leading business-consulting firm, to identify the strengths and barriers within our organization. We have passion and commitment but need to take more risks and expand our thinking. To grow this business, we need to unleash the potential of Quixtar and IBOs and create new growth through innovative products and categories.

We must make IBOs profitable sooner so they stay longer and keep the business growing. We need to create expectations for the IBO experience and then make them a reality. That's how we'll double our business. There are three components to our strategic direction: Implementing First Circle, Enhancing Reputation, and Improving Our Relationships.

First Circle

First Circle isn't a passing fad, promotion, product, or initiative … it's a transformation critical to the future of our business. If we don't fulfill the potential and promise of First Circle, we will settle for incremental growth. We need to make good and follow through on what we need to do to help more IBOs become profitable sooner. We need more products IBOs want to sell, not just products IBOs want to buy. And that's where acquisitions come in to help us create the products and develop the marketing expertise to bring more retailable products to market faster.

Acquisitions are a tactic, not a strategy. They're designed to help us find resources, capabilities, talents, and solutions to accelerate the pace of innovation. To quickly gain the expertise we don't have, we need to buy it. We need to find out what customers want and bring the talent, products, energy, expertise, and, in some cases, companies into the fold to augment what we already have in place.
Acquisitions are a risk and may occasionally create some conflict. But the risk of not acting to improve IBO businesses is much greater. First and foremost, acquisitions are designed to support and grow the Quixtar business, either directly or indirectly. The Laura Mercier/Gurwitch acquisition was designed to help our beauty business become as strong as our health business. The recent Alan James Group acquisition through Interleukin was to bring a product pipeline and access to marketing expertise to the
health business. The Interleukin relationship already has brought the Gensona tests and Nutrilite heart-health product to IBO businesses.

We will communicate the reasons for and details of acquisitions more fully in the future, including scheduling conference calls with Founders Council and IBOAI Board Members periodically to discuss overall progress on First Circle and the evolving role of acquisitions.

Reputation

For many years, we allowed our critics to define our business, because we felt if we acknowledged them we would give them credibility. That, in hindsight, was a mistake. Today, we know we need to tell our story and create an accurate perception of our business, based on the new reality we'll create through First Circle.

Our visibility campaign featuring national advertising is a first step to protect the business and help create an understanding of what it is and isn't. "The Facts About Quixtar" DVD, a joint project of the IBOAI and Quixtar, helps IBOs defend their businesses against criticism by providing the facts about critic allegations.

But improving reputation is a responsibility we all share. All our research shows that the greatest impact on reputation is what we do and say. We must be transparent so we're understood. We must all walk our talk, because personal experience will trump all the advertising in the world.
No single individual, program, or action will fix our reputation issues. We must all be working together as a team and wearing the same jersey. We may have different roles, but we're all on the same team to improve the reputation of this business.

Relationships

The IBOAI and Quixtar both exist to improve the business opportunity for all IBOs. That shared commitment is the foundation for our relationship and all we do. While Quixtar may work with a large number of IBOs and organizations individually, we value the IBOAI representation of all organizations and all IBOs. We respect the foundations of the IBOAI and its contributions over time.

We must continue to refine the working relationships between the company and the IBOAI. To ensure we're focusing on key strategic issues that affect all IBOs. To better define roles and responsibilities. To align our efforts and keep our focus on making this business better for every IBO. To respect the
experience and commitment of the IBO leaders who give their time to serve others through the IBOAI as well as the corporate leaders and staff who are dedicated to serving all IBOs in what they do every day.

And we need to be mutually accountable. Quixtar must be accountable to every IBO, from the person just signing up to those who lead the business today, to provide a business opportunity that will be stronger tomorrow than it is today. The IBOAI must be accountable to its members and to represent the interests of IBOs at all levels, working with Quixtar to improve the business for all IBOs. Together, we will build the foundation for growth and for a more responsible and respected business in the future. And every IBO, through their contract with Quixtar, is accountable to abide by the Rules of Conduct and to build their business in a responsible manner that enhances the reputation of the business.

Steve Van Andel
Chairman
Alticor
Doug DeVos
President
Alticor
Greg Duncan
Chairman, Executive Committee
IBOAI Board of Directors

 


With Quixtar Accreditation, the new Quixtar Advertisements and the new DVD, amongst other initiatives, there is a true sense that Quixtar and Alticor are undergoing a sea-change in attitude. For many years it has been "business as usual" with tweaks along the way to improve things. Sometimes however, a leap is necessary, and it appears to me that this is what is occurring.

I would make one plea to Alticor however. Do not forget that the majority of your business, and the majority of your Independent Business Owner's, are not in North America. They are throughout the globe. The Internet too is global, and every single month I personally show this business to people and they are interested in investigating it further. The do so, as you would reasonably expect, on the Internet. And what they find inevitably leads many of them to decide very quickly, and without the real facts, to even investigate further. How many IBO's do we lose, not because the products aren't good, not being of the prices, not because the opportunity doesn't work – but they are simply sick of putting in the effort to show this opportunity and products to people, and those efforts are destroyed in a few moments by the misleading and often outright false information spread by a few folk on the internet?

But we International IBOs have no amwayfacts.com to match quixtarfacts.com, we have no ibofacts.com, we don't even have, despite the name, an iboai.com. We certainly don't have The Land of Will or Nutrilite Plant Tours and we don't have an Amway Facts DVDs either.

I've had enough of the lies on the internet, so I'm doing my part with this site. The emails I get from IBOs tell me I'm making a difference. It would be nice to see Amway doing what Quixtar says it is doing - helping IBOs succeed. 

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