Post Register | Mike Mooney |
Life is good for Melaleuca and its employees. Late last month, the Idaho Falls-based consumer product company unveiled a new compensation plan for its more than 200,000 independent marketing executives in the U.S. and Canada.
According to a company news release, the plan was announced at the company’s annual convention — an event attended by more than 8,000 people representing 14 nations.
In an interview with Shoptalk, Melaleuca CEO Frank VanderSloot said the new compensation plan represents the first major change in the way the company rewards its marketing executives in more than 14 years.
“We will pay out several million dollars (more in total compensation) every year,” VanderSloot said.
As a result, VanderSloot also expects the company to undergo a dramatic increase in its growth rate while creating several new jobs at its Idaho Falls headquarters.
“If the buzz on the Internet and social media sites is an indication of what is coming, our new building might not be large enough,” VanderSloot said. “We have never seen this kind of response. The result should be thousands of new customers over the next several years.”
The company markets more than 350 health, home cleaning, pharmaceutical and personal care products to customers worldwide.
Since its founding some 28 years ago, VanderSloot said Melaleuca has paid out some $3.7 billion to its marketing executives.
“But that’s going to increase dramatically,” he said. “This change will affect the Idaho Falls community more than any other change we’ve announced.”
Without going into detail, VanderSloot said the end result of the new system will mean larger bonuses for employees without changing the commissions paid on products sold.
“We are not a multi-level marketing company. We compensate people to refer our products,” VanderSloot said. “In our (marketing) model, we create a demand for our products by word-of-mouth and through social media.”
Melaleuca takes a direct-marketing approach in selling its products, rather than competing with other consumer product companies for shelf space in large chain grocery stores and other retail outlets.
Those companies, VanderSloot said, “maneuver and compete with each other for (that) shelf space. They create demand for their products by driving shoppers into a store in search of their products.”
If the product falls out of favor, the company loses the shelf space it fought so hard to obtain. It’s an approach that Melaleuca has no interest in pursuing.
“It’s not going to happen,” VanderSloot said. “Our mission is to enhance the lives of those we touch by helping people reach their goals. Our loyalty is to our customers.”
And from what VanderSloot said, that loyalty works both ways.
“One out of every 300 households in America is a preferred Melaleuca customer,” VanderSloot said. “Ninety-six percent of everyone who bought (a Melaleuca product) last month will buy (product) again next month.”
And perhaps that’s the secret behind Melaleuca’s success — a reported $1 billion in annual revenues.
For more on Melaleuca, visit www.melaleuca.com.