For convenience, I have included below links to all the posts on the Arbonne Results Approach Analysis. When read in the order listed here they closely mirror the original analysis dated August 26, 2009.

All contents of this analysis and the posts herein are ©copyrighted 2009 by VoiceWind and Greg Loveless.

Part 1: Who Should Read the “Analysis of the Arbonne Results Approach”

Part 2: Overview of the “Analysis of the Arbonne Results Approach”

Part 3: Author & Data in the Analysis of the Arbonne Results Approach

Part 4: The Debate Over Systems – “Analysis of the Arbonne Results Approach”

Part 5: The Two Types of Volume in the Arbonne Results Approach

Part 6: Failure Rate in the Arbonne Results Approach

Part 7: Potential Volume is False Volume and Increases Failure Rate in the Arbonne Results Approach

Part 8: The Pyramid Scheme Tipping Point in the Arbonne Results Approach

Part 9: The Ethical Dilemma Caused by the Arbonne Results Approach

Part 10: Results Approach Temporary Balloon Effect on Existing Networks

Part 11: The Mathematics of Weakness in the Arbonne Results Approach

Part 12: Arbonne Results Approach is Fast Track Because of the Failure Volume

Part 13: Ethical & Unethical Use of the Arbonne Results Approach

Part 14: Options to Make the Arbonne Results Approach Ethically Viable

There are several methods that would make the Results Approach ethically viable. However, analysis of these options reveal that they fall into the following categories.

1. The first option is for Arbonne Corporate to issue a directive. But this is only viable in a standard corporate environment. Because in a corporate environment, the representative who is in direct contact with the public, can be controlled by company directives. But this method is not viable in an MLM enviornment like Arbonne where the Consultant is by Federal Law an Independent Business entity. In these cases specific direction could be a violation of this independent consultant relationship. As a result any option that could only be enforced by corporate fiat is not workable in the case of Arbonne.
2. The second option falls into the category of the slippery slop. In these cases a recommendation is provided by the Arbonne Corporate that would keep the Arbonne Results Approach within the ethical guidelines such as only 2 or 3 Results Approach Kits are allowed. This would then reduce the large upfront orders that result in front loading and then push the network over the pyramid scheme tipping point. However, due to Arbonne Corporates inability to enforce this limit without violating the Independent Consultant relationship this option is not workable.
3. The third options is the use of sample packs in conjunction with the Results Approach Kits. This is one option that Arbonne Corporate attempted to implement. For details visit the Arbonne University Results Approach Training. But enforcement of this once again runs into the conflicts between Arbonne Corporate directing an Independent Consultant. To be absolutely open and honest about this, and with all due respect to Arbonne Corporate, this strategy was less a solution to the ethical issues the Results Approach inflicted upon the Arbonne field and appears to be more of a basic CYA for Arbonne Corporate. This strategy, through legalese,  created a wall of protection around Arbonne Corporate while at the same time it left those in the field totally funerable to the very same ethic from which Arbonne Corporate had protected itself. In essence, the field had been left to swim with the sharks.
4. A fourth option would be for Arbonne Corporate to force the Sponsoring Consultant to buy back any Result Approach Kits that are not sold. This would bring even those Consultant’s networks that use large upfront Results Approach orders in line with the standards as set out by the DSA web site. But Arbonne Corporate would once again be on shaky ground when it came to enforcing this on an Independent Consultant. Not to mention there would be a lot of “he said, she said” and no one wins in these situations which would ultimately leave Arbonne exposed. And this does not address the issue of Kits that are compromised.
5. A fifth option would be for Arbonne Corporate itself to buy back the Kits. But this would only provide greater incentive to those Consultants who were pushing the unethical boundaries with the Result Approach Kits to push them even farther. After all, if you have a sugar daddy who is going to pick up the tab if those you sponsor cannot move the Result Approach Kits, why worry about whether the prospect can actually move the kits. Do the hard sale and move on to the next. Can anyone say Fannie May and Freddie Mac.
6. The sixth option would be to leave the Results Approach System in tact but this allows a consumable product with retail volume to be purchased as a business aid which allows the upline Consultant to benefit monetarily from this volume. So to prevent Consultants from returning any Results Approach Kits that are purchased in large quantities to Arbonne, or to prevent these Result Approach Kits from appearing on E-bay,  each Result Approach Kit would have to be tagged with a unique ID so it could be traced back to the source. This option is not feasible because it is cost prohibitive.

Our Recommendation that Creates an Ethic Proof Results Approach System:

The only viable option would be for Arbonne to provide Consultants with testers that have a 3 to 7 day supply and are self contained. This solution has the following advantages:

1. It eliminates the potential contamination that the full size systems are susceptible to.
2. It does not require a directive or edict from Arbonne Corporate thus protecting the legal separation between Arbonne Corporate and the Independent Consultant’s business.
3. It would eliminate the need for Arbonne to dance the ethical line by on the one hand supporting the Results Approach System (Trainings, etc.) and on the other hand recommending that Consultants:
   • Use sample packs in conjunction with the Results Approach Kits (which they cannot enforce)
   • That the Consultants are responsible for any contamination to the Results Approach Kits (which again they cannot enforce)
   • Try to prevent front loading by questioning those who order large quantities of RE9 Systems (which again they cannot enforce)
4. It would allow Arbonne Corporate to categorize these testers as a business aids. This is important because items that are classified as Business Aids have no retail volume attached to them. Consequently this would take away the incentive to up-line Consultants to push large upfront orders so they could receive monetary compensation on Results Approach Kits.

All posts regarding the Arbonne Results Approach Analysis

In light of the previous post Arbonne Results Approach is Fast Track Because of the Failure Volume it is obvious that the increase in volume in a Results Approach Network, as compared to the volume in a Group Presentation Network, comes from the volume in the large upfront orders because the upline gets paid on this volume whether or not those in her downline can move the Results Kits and convert that volume from potential to actual consumable volume. And because there is a 50% to 80 % failure rate, a large portion of this additional volume in the Results Approach Network comes from the failure in the system.

Large Upfront Orders Make the Arbonne Results Approach Unethical:

In light of this everyone has to ask themselves this question. Do I want to build an Arbonne business with a system that will produce more revenue, when all or most of this additional revenue is generated by the failure in the system?

This is not an incidental consequence. These facts change everything. When data indicates that the additional revenue is generated by the failure in the system, a decision to use the Results Approach System as opposed to any other system ceases to be a business strategy decision. Rather, it is now an ethical decision and, in light of this data there is really only one correct answer. The data we have uncovered would indicates that there is an ethical way to build an Arbonne business using the Results Approach, but a Results Approach System which includes large upfront orders is not included in this ethic.

If you disagree, before you respond remember what John C. Maxwell says about ethics.

“There is no such thing as business ethics. Just ethics! Those who use one ethic for family, another ethic for their spiritual life and another ethic for business will always get into trouble. There are not different types of ethics. There is just ethics.”

Ethical Use of the Results Approach:

I mentioned at the beginning of this article that Linda has Consultants in her organization who do the Results Approach and are successful. If what I have just laid out is true, how can that be and why would Linda allow it; how could she ethically allow it? It has to do with balance and quantity. Those Consultants in Linda’s network who are building a successful business and use the Results Approach use it as a supplemental to the Group or One-on-One Presentations. If someone cannot get to the presentation then a Results drop off is used or they do the Results with certain people. This causes two main differences:

1. They are not building their network with large up front orders so there is no false volume in the network.
2. They are creating a network of consumers and the Results Approach is just another method to accomplish that.

This is why the Consultants in Linda’s network who are using the Results Approach are successful. Most use it as a supplemental to the Groups Presentation System. As a Result, the percentage of Potential Consumable Volume in their network is minimal or zero and as a result they have taken the risk of the “Potential Consumable Volume”, the “Pyramid Tipping Point” and the “Mathematics of Weakness” out of their networks all by eliminating large upfront orders. In so doing they have also altered the ethic.

All posts regarding the Arbonne Results Approach Analysis

Even with all this data there is still the fact that many of the fastest growing networks are utilizing the Results Approach. In Arbonne it is referred to as the “Fast Track” system. But why is it “Fast Track”? What makes it “Fast Track”?

Results Approach Fast Track Volume Built on Failure:

The “Fast Track” cannot be caused by the efficiency of the Results Approach System. After all it is a One-on-One system so it takes more time to get in front of the same quantity of people as compared to the Group Presentation System.

So what is it about the Results Approach System that allows it to generate greater volume and do so faster? Our research indicates those networks that used the Results Approach without large upfront orders grew at or below those that used a Group Presentation System. On the other hand those networks that used the Results Approach with large upfront orders at first grew faster, then plateaued out and then declined. A comparison of a Group Presentation network and a Results Approach network reveals the cause of this.

Let’s say Consultant “A” builds her network with Group Presentations or One-on-Ones and sponsors Consultant “B”. Then Consultant “B” sponsors four others. Then after booking and holding presentations they all decide to quit (and 50 to 80% will). The only volume generated was from the Group Presentation sales. Consultant “B” and her friends probably have no inventory except their personal order. They were not successful so Consultant “A” did not get paid on them or was only compensated for the amount of success they achieved.

But if Consultant “A” builds her network with the Results Approach and sponsors Consultant “B” and Consultant “B” sponsors four others all with a $2,500 upfront order, and then they all decide to quit, there is a total of $12,500 of potential volume in Consultant “A’s” network on which she will be paid. So in this case the up-line Consultant was paid before she made the new Consultants successful. In fact she was paid even though the new Consultant failed. I call this type of revenue that comes from the upfront orders of Consultants that fail, “failure volume”.

Failure Volume and The Fast Track:

Now when we take this “Failure Volume” in the Results Approach and add it across a network, and then we compare this to a Group Presentation Network that has no “Failure Volume”, the amount of the difference results in the “Fast Track” volume. So it is not the Results Approach’s ability to produce more sales volume that makes it “Fast Track”. Rather it is the upfront volume from the 50% to 80% who fail and stop doing the business that is responsible for the “fast track” volume. Because unlike the Group Presentation System, in the Result Approach System, the upline Consultant will get paid immediately on the large upfront orders of Results Kits whether or not these Kits are moved from potential to actual consumable volume.

Let me repeat that; it is not the efficiency of the Results Approach that is generating the greater volume, it is the up front volume paid by the 50% to 80% of the Consultants who will stop doing the business but have already paid into the system. The Results Approach is “Fast Track” because of the “Failure Volume”.

All posts regarding the Arbonne Results Approach Analysis

Using the Results Approach to build an Arbonne Business, and doing this with large upfront orders will produce quick results, but the process has a weakness built into it. This weakness comes from two areas; the false volume created by potential consumable volume rather than actual consumable volume. And also from the protections built into the Arbonne compensation plan.

Your Strength is your Weakness and Your Weakness is Your Strength:

One of the concepts that I drill into my players heads is “your strength is your weakness, and your weakness is your strength”. If I have a player who has all four athletic gifts; speed, quickness, power and strength, these gifts can have a negative impact on their performance. The reason is they will rely on these strengths rather than develop their techniques and skills. As a result they will eventually plateau out. But if I have a player who does not have great quickness they will compensate by working on their hitting technique. In addition to this adjustment they will work to understand what the pitcher’s tendencies are so they can get an advantage. And because they have to understand these tendencies and patterns to be successful they use these strategies in all aspects of their game. In the later example this results in a stronger player and it all began because of a weakness. In the former it results in a weaker player and it all began because of her strengths.

The strength of the Results Approach is the drop off of the kits that encourage use of the products so the customer sees the results and wants to buy. But this strength is also a weakness. This process is really a One-on-One approach which means you have to increase your appointments to get in front of the same number of people you would if you were to do the Group Presentation System.

Failure to increase the quantity will result in slower growth. However, the fact of this slower growth gets clouded by the potential consumable volume from the Results Kits. Because there is no distinction made between potential and actual consumable volume, it appears to be much easier and just as legitimate to build a network with a few business builders who purchase Results Kits than it is to see enough people through One-on-Ones to get the same consumable volume. So there is a natural tendency for networks that are doing the Results Approach to compensate by gravitating towards large orders. So the strength of the Results Approach is also its weakness.

Impact to Compensation When Volume Passes Out of Pay Range:

We have witnessed teams who have used the Results Approach to build a network from the ground up. As they did this they never made a distinction between potential and actual consumable volume. The following is how this played out. To make this easier to understand the calculations are a perfect scenario. This rarely occurs in the real world but makes the math simpler and thus easier to understand.

You join Arbonne as a Consultant and begin the Results Approach. You look for four business builders and find them in the first month. You train your team to do the same. Here is what your network will look like as it evolves over the next few months.

Get Four Business Builders:……………………. 4 X $2,500  =       $10,000 (Level #1)
They Each Get Four Business Builders:……. 16 X $2,500  =       $40,000 (Level #2)
They Each Get Four Business Builders:……. 64 X $2,500  =    $160,000 (Level #3)
They Each Get Four Business Builders:….. 256 X $2,500  =    $640,000 (Level #4)

Now to be clear, the above is a perfect scenario and the odds of it working this way are almost impossible. But I am doing this to keep the calculations simple so that you can see what happens as this system plays out.

In the Arbonne Policies and Procedures the Compensation plan lays out how a Consultant is paid on the volume in her network. A Consultant can get paid up to three levels deep on the volume in her District, Area and Region. He/she can get paid up to six levels deep on volume in her Nation.

In the Results Approach Training it is emphasized that a Consultant needs to get four (4), who each get four (16), who each get four (64), ad infinitum. As each generation is added it also adds a level of depth in the network. As this scenario plays out the business builders will pass out of the top Consultant’s pay range and as they do there will be a corresponding draw back in compensation even though volume in the network is growing.

• 1st Month 4% on $10,000*65% = $260 (paid as Consultant)
• 2nd Month 8% on 40,000*65% = $2,080 (paid as District Manager)
• 3rd Month 14% on $160,000*65% = $3,120 (paid as Area Manager)
• 4th Month 18% on $640,000*65% = $3,120 (paid as Region)
• 5th Month 18% on $640,000*65% = $4,160 (paid as Nation)
• 6th Month 18% on $640,000*65% = $4,160 (paid as Nation)
• 7th Month 18% on $640,000*65% = $0 (paid as Nation)

As the volume in the network passes down a level each month, when it gets to the fourth month it passes out of your DM/AM/RVP pay range.

And once the volume gets to the seventh level it passes out of your NVP pay range. (It could pass out of the pay range on the fourth month but for the above calculations we used the maximum possible pay depth of six with the seventh month being out of the compensation pay range.)

I have spoken with numerous Consultants who built their network with large orders, got to RVP or NVP in 6 months to a year and then a year later their override checks drop back to what an Area Manager earns who is doing Group Presentations.  Now it is true that there will be volume filling in behind this volume as Consultants continue to work the business so the check does not drop all the way to zero. But unlike the Group Presentation System where the volume is 100% from consumable volume and all of it can be possible residual income, the Results Approach can have a more severe impact on the compensation. The reason for this is the results approach focuses on business builders with large orders causing the network to stack quicker; and because there is a 50% to 80% failure rate, the risk of a down turn is greater. The combination of the flame out (where a Consultant who paid the $2,500 cannot get anyone else to signup under them for $2,500 and cannot move her kits) and the volume passing out of pay range is dramatic and devastating to a network. The combination of these two as a multiple within a network that has exponential growth will in turn create an exponential down turn when they activate.

All posts regarding the Arbonne Results Approach Analysis

The Balloon Effect Defined:

On numerous occasions I have had discussions with an RVP or NVP who decided to change from One-on-One, Party or Group Presentation System to the Results Approach System. When I ask if it worked they will say something like, “We saw an immediate impact on our numbers up and down the network. Those who were close to qualifying for the next level finally got there. It was amazing.”

When I ask, “How much of the volume was potential (from Results Kits) and how much was actual,” there is a blank look or a question as to what I mean. This is evidence that this person did not understand the balloon effect of Results Kits on an existing network.

Calculating the Balloon Effect on Existing Network:

What is the Balloon Effect? Say we have an RVP who has three Area Managers who each have three District Managers. One Area Manager is doing $30,000 another $25,000 and the third $20,000 each month. This RVP also has three District Managers direct to her. One is doing $8,000 another $6,000 and the third $4,000 each month. Adding in the volume from her central district we get a total monthly volume of $120,000. The network would look something like this.

RVP Network Tree

In this network there are three AM’s and 9 DM’s under them and three DM’s direct to the RVP for a total of 15 business builders. Now let’s make a conservative assumption that each of these business builders has on average one business builder at the Consultant level. That would give this network a total of 30 active business builders.

This RVP decides her team is going to do the Results Approach, so all the Business Builders do $2,500 purchase of Results Kits. That’s $2,500 times 30 or $75,000 dollars of an increase to the previous month’s volume. This pushes the RVP’s volume from $120,000 to $195,000 in one month and into qualification for NVP.  Observing this the RVP believes the Results Approach works. But this is not correct. You see the entire $75,000 generated from Results Kits is all “potential consumable volume” not “actual consumable volume”. Whatever portion of the Results Kits do not get converted into actual consumable volume, will cause the RVP’s volume to drop by that amount the following month or at some point.

Down Turn of Balloon Effect Impacts Residual Income:

In addition to the down turn from the potential Results Kits that were not moved, there is another impact. Not only will her volume drop by the portion of volume that remains potential, but the potential volume will have to be consumed before residual income will kick back in. So it has a negative impact on volume and residual income for an extended period of time.

The combination of these two is what I call the “Balloon Effect”. The purchase of the Kit’s by existing Business Builders balloons the volume and in some cases pushes the Consultant to the next management level. But whatever the amount of potential consumable volume that is not converted to actual consumable volume will have to flush out of the system.

It is true that the potential volume in these Results Kits could be converted to actual consumable volume. But the only way to do this is to book appointments, which, it has been proven, can be done without the Results Kits.

Some Consultants believe what I have described will not happen to them. They will keep the string going. Well that may be so, but even when you keep the string going, if you do not convert the Results Kits from potential consumable volume to actual consumable volume you will still lose because of the protections built into the Arbonne Compensation Plan. We will deal with that next in “The Mathematics of Weakness”.

All posts regarding the Arbonne Results Approach Analysis