New series: Profile of a leader who’s building long term, not short term:
#1 – Donna Johnson, Arbonne’s top banana.
Last month ago, I did an interview with Donna Larson Johnson, the top earner at Arbonne International. Many people know that Arbonne has been growing by leaps and bounds for the past couple of years. So what’s to worry about?
Donna (and corporate) were worried about a few loud and visible recruiter types who had invaded the distributor ranks to ride the company’s growth wave. These traditional front loaders are encouraging women to buy several thousand dollars worth of product by telling them they are on the “fast growing” team.
Translation: Women were suddenly stuck with thousands of dollars worth of product…thinking that was the way to go fast.
Others who want smaller packages are told that they’re the ‘slow’ ones (by the front loading recruiters).
Since most of the company is in Donna’s group, she stands to benefit from all this volume. And most upline would be happy. But Donna knows that front loading is the kiss of death, like it was for Excel Communications.
Donna called me to help her explain the dangers of front loading to her key leaders – some 200 of them. Which I was delighted to do.
Front loading syndrome: Encourage people to buy the big start up packages of $2,800 instead of a smaller $500 package. The big initial order gets the sponsor that bigger one-time (fast start) bonus from the company.
Next, encourage the just front loaded one to find 3-4 others to buy in too – as the “fast” way to earn their money back (they’d get those one-time bonuses on those big orders, too). Pump out those initial big orders, and earn the bonuses on each one.
Problem: The front loaders don’t show anyone how to sell what they bought. That’s too slow.
Front loading mostly gets most people garage-qualified. And causes their embarassed friends to stop inviting them over for Christmas dinner.
The front loading method is a cancer to any customer-based business like Arbonne’s has been. Who wants stuff in their garage? And hundreds of requests for refunds?
So what does someone earming $400,000/mo have to worry about?
How to keep the money hype and the front loaders away – both ingredients for the ruin of any company and its wonderful people who joined hoping to make a difference.
The time to plan is BEFORE big trouble starts. Thanks and plaudits to you, Donna.
UPDATE SUNDAY 9.24.06
Donna said today that her largest check was over $400,000, but that it is not her average. She said it’s fair to say that she receives “six figure monthly” checks. (Six figures means anything from $100,000 to $900,000 -KK)
She added: “Arbonne and its leaders are careful to follow compliance, and the company discloses the average incomes of each position on the Arbonne website.”
And last, she wrote, “Even though there were only 200 people on the live call you did (which was a fantastic call, and really turned things around in our company and you can hop over to this website to know more about it), I recorded the call, and it spread throughout our company, and literally thousands of people heard that call, which was very powerful.” 🙂
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P.S. I will be doing posts about individuals who are making a difference in our business, especially leaders who impact so many thousands of others with what they say and do. I welcome your suggestions. I’ve known Donna and have worked with her people for 10 years. Email me. (See the right side of this blog.)
So, WHY is there a bonus from the company for front end loading new people?
Here in Maryland, as well as in other areas of the country, if a company promotes front end loading of product, or pays a commission on a fee paid to join a company, then that company gets red-flagged by the state office of the attorney general for an investigation. I have spoken directly to the man in charge of that office here in Maryland, and those are his words, not mine.
Most people who become involved in a network marketing opportunity are not business owners before they get involved – and they just plain don’t know what to look out for!
Thanks for writing this article, and thanks to Donna Larson Johnson for thinking long term. Short term thinking and greed could kill this industry.
Meanwhile Arbonne (and other companies) management folks, if you read this, you might think of changing your plan around. Human nature being what it is, and self serving/greed being almost universal to some degree – people will manipulate a plan like yours to their advantage.
A couple of things about the $400,000 post. I am with Arbonne.
What’s really sad is that the front loaders in our company right now aren’t even making their up front bonus. They don’t utilize the one package (which would cost a new person less money) that offers a bonus because it doesn’t give them as much volume. The fact is they are encouraging people to forego their immediate income for 2 to 3 months to earn their car. As soon as they get the car they represent success to more people and more people are willing to buy in to their story. We hear about all the people who get their car in 90 or 120 days – some of whom buy it before they’ve actually earned it – but we never hear about the people who lose the car or lose the title that goes with the car and then have to take a second loan on their house because they can’t keep the momentum.
I almost bought into this whole thing.
It’s hard to keep in mind that this isn’t what Arbonne is about as a company when even Corporate is promoting these people as the “new generation” of leaders in the company.
What’s worse and it didn’t occur to me until today on the call but you’re right. The 2 people who are driving this momentum are seasoned MLM’rs. They have built it big in other companies and then left. Arbonne has just expanded to accommodate all this new growth but there is NO customer program available so if these 2 big bananas happen to leave to jump on the next big deal and they take their line with them Arbonne is going to be in a world of hurt.
There is a world-class education in this dialogue for all of us, inc non-Arbonne and lurkers…
Thanks!
This goes back to a post I did here (and on my blog) a while ago, but it warrants repeating. We are going to beat the drum until companies wise up and realize that they have to change the way they do things.
Business Models Drive the Behavior in the Field…..
If you’re in a network marketing (mlm) company, take a look at your business model. Do you get compensated for retailing (selling) your product? Or do you only get commission on the distributors/business builders that you sign up? If your compensation plan pays the majority of commissions for sponsoring business builders and not for retailing product, the behavior in the field that will drive is recruit, recruit, recruit.
With the 5 Pillars company I have partnered with, we get compensated (commission) based on anything we sell. It does not matter if those sales came from customers or business builders. Customers are just as important as business builders are in the company I have chosen to work with.
The majority of network marketing companies out there have good products that can actually help people. BUT, if you wouldn’t sell that product to your mom/dad at retail, then you are in the wrong company. The reason a lot of network marketing/mlm companies have to charge so much for their products is overhead. If a company boasts that they have hundreds of people taking orders and a massive building, that is where the money is going INSTEAD OF INTO YOUR POCKET as a distributor.
As a Mentoring For Free success coach, I look at the policies and procedures of network marketing companies every day. I also evaluate compensation plans. Some of these companies out there don’t even pay you if you retail your products. They only pay on business builder volume. That’s SAD!! And it’s possibly criminal.
Read the entire post at
my blog
Roxanne
Rob – NO, Arbonne DOES NOT HAVE A BONUS for initial orders…
Arbonne’s comp plan is in line with all of our regulating agencies. We’ve been around for 26 years, and our compensation plan is solid and fair, rewarding those that simply want to enjoy wholesale benefits, make a little spending money, or build a big business.
What the frontloading did, was create false promotions…in other words, people were promoting quickly up the leadership ranks based on start up orders, and not solid, proven, consistent activity with appointments. Arbonne’s philosophy is doing appointments, either one on one or in groups, and finding out if people are a 1, 2 or 3. One is a client, Two is someone who wants to shop at wholesale, and share arbonne w/friends & family, and three is someone who wants to build a business. This takes time, but that time also develops the new business builder into a well trained leader, that is immersed in our culture of ethics and integrity. Our philosophy is build a business that LASTS!
Donna Johnson
Hi Rebecca…
The problem I have with your comment is that you are IN ARBONNE, and yet want to point fingers and blame someone else, namely 2 big bananas…..I only have one question for you: do you have a personal experience that relates to these 2 big bananas? Or did you just hear a rumor? The two big bananas you talk about, are a RUMOR…….and believe me, I’ve been chasing this rumor all summer, and it is gone. The problem is, the rumor mill continues…..let’s stop the madness.
Here is the TRUTH…..Every top leader in Arbonne DOES NOT AGREE with this frontloading crap. If they did, they would have to face me, Rita Davenport (President), Bob Henry (corporate compliance), and everyone at Arbonne that believes in doing the right thing in the right way for the right reason.
We understand that with growth comes two things: #1) People that want to exploit/take advantage, and try to get rich quick, and #2) those that want to protect our integrity, do the right thing, and learn from every experience.
That is the problem with our industry……everyone thinks they are snow white, and wants to blame someone else. Let’s all circle the wagons, and protect ourselves as a company and industry.
I enrolled with Arbonne and worked my “you know what” off for 8 solid months and never got anywhere. I was one of the suckers who bought into the frontloading plan of action. In a way I was brainwashed and starstruck at the same time… I listened to the promises of those who had gone before me with every intention of following in those giant footsteps but to no avail. I cannot tell you how heartbroken I was when I came to realize that without a strong support system I was going nowhere, I was simply spinning my wheels and I was on my own. I was literally 4 people away from the “big wig” gal at the top of my upline chain but try as I might (and believe me, I was persistent!)I was rarely able to receive call-backs and return emails much less any other kind of personal support outside of weekly conference calls with hundreds of people on them. I did contact a few leaders outside of my circle and they were kind and helpful but had their own teams to worry about and to support. I think Arbonne is a wonderful company with fantastic products… I just wish I had enrolled under a team of people who were there for me and not just in it to make the big bucks. I got lost in the shuffle and died a slow death.
I’ve since found another company in a completely different industry and the support I’m getting from my upline is what’s making success possible for me now. The moral of this story is: Introduce yourself to your downline, as deep as it goes, and do whatever it takes for those who are serious about building a business to feel confident and successful… this is the way to build a successful business that is as solid as a rock. People don’t care about how much you know, they care about how much you care!
Kelly
I’m reading all this with some trepidation, as I see my company and myself in this saga. A year ago the company decided to post profiles of the big top of the heap management, but shot themselves in the foot when they posted their lifetime earnings. One couple, (thats two people) on the heap made a 8 year income of 500,000 while another guy makes a 100,000 a month. You don’t have to guess who is teaching buy the big pack. I don’t know how many people I recruited who still have their “success packs” in the basement or garage, but I know for a fact a lot do. I am lost in that shuffle Kelly mentioned, trying to get someone upline to give me a little support but not reaching anyone willing to help or even respond to an email. I can’t help the people below me when I don’t have a good model to follow. So my choices are to quit and re-sign with someone else and start over at the bottom or change companies. Not much of a choice, since my whole professional identity is tied up with this company.
I can understand being frustrated at the lack of support from your sponsoring team. We come into this business with the best hope and believing that everyone will be true to their word. Well it’s not always the case. So there are choices continue on without help something akin to a slow death or find the help you need. There are so many success coaches for MLMers, find a good one and what you learn, you can teach to others and you can be there to support them as you never were. I’m a student with MLMU and I love the program. It has given me the skills and the confidence to have and treat this business like a profession. One where caring for someone else is not just catchy but through and through it’s all about the other person. Take care and to your success.
First, let me say how inspiring this post is from many perspectives.
First, that there are still LEADERS who have been around awhile and are committed and dedicated to their company and team. Donna, your monthly check inspired me to up my goals and my focus! Thanks! I’ve been busy dream building!
Second, there are many good companies out there where this practices are not dictated by the company, but often by a group of OVERZEALOUS distributors looking for quick cash with no regard for the person who they are sponsoring.
Many of us are focused on creating WIN-WIN’s with those we partner with and listen for their needs, business goals and desires BEFORE suggesting a particular starter package.
If someone is even the least bit hesitant, I encourage them to sign up with the basic package, try it out, hand out a few of the samples to others and garner an opinion. Then, when they are sold on both the product and the coaching and support they will get from me, then they can always jump in with a larger package.
Now, they often feel REALLY good about their decision to partner with me, because they know I am not going to try to “Sell” them on something they are not ready for.
Often, this works out well as they end up signing up for a bigger package because they now feel more comfortable.
Creating a WIN-WIN always build s a stronger, more solid LONG TERM business!
And, that’s what many of us are here for!
EXPECT Success!
Jackie Ulmer
http://www.streetsmartwealth.com