This is the second bit of the Shaklee comments clarification. The first part is here.
I couldn’t help but wonder if Mr. B. knew that this particular focus, i.e. the recruiters and recruiting bonuses, to the exclusion of promoting any real customer base program, is the very thing insiders say brought Excel down. The last two years of its life, Excel and its recruiters pumped the $399 recruiter sign-up programs hard, because most of the bonus went to the reps. But alas, almost nothing was earned by anyone from residual customer income. And almost no one renewed after they signed up.
A gent named Joe D’Angelo, representing VarTec, the owner of Excel, testified in October, 2004, that
”Most Excel independent representatives earn little or no commission, and at least 90 percent of the people who join don’t stay a second year. A person who wants to sell Excel products is required to pay a $399 first-year fee, with a $199 annual fee for following years.” See my original report here.
Why institute and promote a program with such appalling results? Why bring in the same kinds of people who had overdone the recruiter feeding frenzy so much that it killed their own company? These same people, now seeking refuge in Shaklee, used to say they’d bring the old product company into the modern recruiting age. Right.
Shaklee’s history and success is based on its thousands of regular customers, a majority of whom came in as reps. And because of this security, if all the recruiters stopped recruiting, Shaklee would not be in financial danger. Not so for the recruiter fast-start-bonus-money-driven companies like Excel, where too many recruiter types did the business for the money first, and everything else second. Values that are in the wrong place, in my opinion, for lasting success: A focus on fast money without a strong customer base building program. Not Dr. Shaklee’s values, I’d bet.
Yes, perhaps Shaklee was a bit stodgy according to some, and in need of new blood at the top. But doing the big recruiter push a la Excel which has just choked (See finale, Part III)