Alert #175: 4/30/2011

Google Goofs, BBB BS Abates
And Other Random Items of Interest

As an April Fools joke a few years back I sent out an Alert announcing that I had just launched my own M.L.M. company – called FreeLunch International.

In spite of the absurdity of the site (listen to the “Grand Pre-Prelaunch Ground Floor Kickoff” call) I received about a dozen angry unsubscribe notices, another dozen facetious requests to join – and six more asking “is this for real?”. One subscriber wrote, quite earnestly, “If it is, you should be ashamed!”. I suppose, technically, she was right.

This reminds me of the April Fools joke I perpetrated on my newsletter subscribers in the early 90s – back when newsletters were made out of paper – where I introduced them to the Alchemy Foundation. AF had discovered, allegedly, a way to turn tin into platinum. For every tin can you send them they’d pay you $4.10, plus 40 cents for every can those you enrolled sent in, down ten levels. Alchemy Foundation’s initials were the first clue, along with all the 4s and 1s in the pay plan. But if that weren’t enough, I borrowed an idea from Sports Illustrated’s 1985 April Fools edition (where they reported on a baseball pitcher that could throw a 168 mph fastball) and spelled out “April Fools” with the first letter of each of the article’s ten paragraphs. To avoid any calls or letters asking how to enroll in the Alchemy Foundation I directed the reader to the bottom of the last page for sign up information. There they found the message, “If it sounds too good to be true, it probably is – April Fools!”. I still received 6 calls asking how to enroll in the Alchemy Foundation.

About four months after my FreeLunch, Inc. website went live I received a couple of solicitations in the mail from Google offering a discount on Google Adwords. But, they weren’t exactly directed to me. They were directed to C. Augie Stein, the CEO of FreeLunch, Inc. (and an homage to friend and founder Corey Augenstein), and FreeLunch’s Vice President Bill Spazzle. Apparently, when Google’s web crawling scraper software found my MarketWave website and went in search of a contact name it came across Augie and Bill on FreeLunch’s Company page. I only wish they would have left their post nominals intact (Augie earned an So.B. and Bill achieved the Oc.D designation).

BBB BS Abates

Some of you veteran Alert subscribers may recall an analysis I performed on the Better Business Bureau ratings of M.L.M. companies back in May of 2009.
(BBB commentary begins at 1:04:40)
(BBB commentary begins at 0:53:27)

The point was to expose what appeared to be a shakedown scheme perpetrated by the BBB in an effort to strong arm companies into purchasing BBB memberships. What seemed obvious by this data was that if you paid their “Accreditation” fee, which ranges from $350 to several thousand dollars depending on the size of the company, you could practically be assured of at least a B+ grade, no matter how many complaints were made against the company. An A grade was also rare without paying the fee.

Allegedly, according to the BBB, there were 17 factors (now 16) that go into a company’s grade and accreditation only accounted for 4% of that grade. Even if this were true it made it impossible for any company, even those with zero complaints who have met the highest standards in all other criteria, to receive an A+ grade without paying the accreditation fee. However, based on the above data, the 4% weighting didn’t even appear to be true. Melaleuca received an A grade in spite of having received 307 complaints over the previous 36 months (8.53 per month) and only 39% were confirmed resolved to the customer’s satisfaction (although all complaints were addressed in some manner). So, had nothing else changed other than Melaleuca’s accreditation status this would have dropped their grade to a still sterling A-minus. And how did PrePaid Legal still manage to get a perfect A+ with 250 complaints (6.94 per month) and only 16.4% confirmed satisfactorily resolved? Then there was AmeriPlan, YTB Travel, and Liberty League, all with significantly lower complaint totals and higher confirmed resolved percentages who received the BBB’s lowest possible grade — an F. While some may argue that the latter two examples may have been deserving of a low grade for other reasons (both were facing serious legal challenges back then), there seems to be no rational explanation for the then 53 year old Tupperware receiving an F grade with only 33 complaints (0.92 per month) and 78.8% confirmed satisfactorily resolved. That is, other than Tupperware’s refusal to pay the BBB’s accreditation fee. None of this made any logical sense, and it wasn’t even the most senseless points revealed by the analysis. Perhaps a lower grade was warranted for Ideal Health (now called The Trump Network) and Max International because they allegedly didn’t even respond to the few complaints that were submitted (3 and 1 respectively). But an F? With one complaint in three years? The now expire Fruta Vida (merged with Pro Image) received only two complaints and resolved both, one confirmed satisfactorily — and got an F. And get this… although the age of a company is one of the BBB’s factors that it considers, the then almost 17 year old Neways International had no complaints at all — ZERO — and their BBB profile was emblazoned with a scarlet F!

Then, in November of 2010 ABC’s 20/20 aired a scathing segment exposing the same issues that Alert subscribers were made aware of 18 months earlier. See the 20/20 report HERE. To it’s credit, the BBB responded quickly and, for the most part, appropriately by issuing this statement HERE where BBB president and CEO Steve Cox acknowledged an internal investigation into the Los Angeles area BBB chapter. That’s the one cited in the 20/20 segment for accepting the $425 accreditation payment from, and awarding A- and A+ grades to, the fictitiously enrolled “Hamas” (named after the Middle Eastern terror group) and “Stormfront” (a neo-nazi white supremacy group) respectively. Mr. Cox also announced that the BBB will no longer factor in whether or not a company is accredited when computing their grade.

I performed the same data collection and analysis in December of last year to see how the top 100 M.L.M. companies faired under the new grading system, along with 27 new upstart companies. The results were quite revealing:

Among the most remarkable aspects of note were companies like PrePaid Legal who, even after this supposed 4% weighted accreditation factor was removed, still managed to receive a perfect A+ grade with among the very highest number of complaints and lowest resolution ratings. Even though being accredited should no longer be a factor, of the 83 non-accredited companies surveyed there were 11 Fs, 7 Ds, 5 Cs, 14 Bs, and 46 As, 27 of which were perfect A-pluses. However, of the 38 accredited companies that were assigned a grade 35 received at least an A-. The lowest grade among accredited companies was the B awarded to Ignite (Stream Energy) — which had amassed 454 complaints (12.61 per month) with a well below average resolution score. I’m wondering… what grade would the BBB have given Madoff Investment Securities had Bernie paid his accreditation fee? I mean, what would an accredited company have to do to warrant an F grade? Or even a C. Be a Nazi terrorist organization?

Although there’s circumstantial evidence that accreditation might still be holding some grades aloft, to their credit the BBB does, in fact, appear to no longer be tethering grades of unaccredited companies to the ground. Of the 18 such M.L.M. companies that previously were assigned grades of C-minus or lower 9 are now graded A-minus or above, including The Trump Network, AmeriPlan, Tupperware and Neways, who all went from an F to an A. MonaVie jumped from a C-minus to an A+ and World Ventures and Isagenix both rose from D-minuses to an A and A-minus respectively. Coastal Vacations, Liberty League, and YTB Travel were Fs, and are all still Fs. Although there are other legitimate factors that may account for the failing grades of these companies, and to relative newcomers Amega Global, CSI (previously Narc That Car), and Global Verge, the Ds and Fs applied to Winalite Health, Rain Nutrition, Qivana, Zija, and Max — who have a total of 15 addressed complaints combined — are mysterious, to say the least. There are two things all five have in common (besided not being accredited). First, the BBB cites “Length of time business has been operating” among the “factors that lowered this business’ rating”. But, Max has been operating since September of 2006. The company For Earth had (as of the 12/10 survey) a vertually identical complaint record and one less year in business, yet earned an A-minus. For Earth is accredited. Max is not. The other “factor that lowered this business’ rating” all five of the above had in common was the “BBB’s concerns with the industry in which this business operates”. The only “industry” all five have in common is network marketing. Of course, if you pay the BBB’s accreditation fee, such as A+ rated Life Plus, Amazon Herb, Life Force, Youngevity, XanGo and several others did, the BBB will no longer have any “concern with the industry in which this business operates”.

The Better Business Bureau’s Baffling, Biased, and Bogus grading system is somewhat improved, but there’s still a lot of work to be done.

DSWA Round Up Celebration

I know it’s late notice, but I’ll be participating in the Table Topic Discussions at the upcoming Direct Selling Women’s Alliance event in Dallas from Thursday, April 28th to Sunday, May 1st. I’ll be speaking on the topic of Compensation Plans Strategies. And yes, if you’re one X chromosome short of a W like me, you are absolutely still welcome!

For more information just click on the DSWA banner at the bottom of the home page.

Favorite Company Contact Spots Going Fast

If you haven’t voted for your favorite M.L.M. companies yet, please click on the link below. Unlike some online voting campaigns this one doesn’t allow anyone to gang-vote for only their own company over and over. Everyone get’s to submit only one ballot per year, and you must vote for at least three, and no more than 10, companies. The Favorite Company vote page typically attracts several thousand unique visitors every year, and you’ll only need to enroll one good prospect to have your one year listing more than pay for itself. And what other kind of prospect would such a listing produce? After all, they’ll all be folks researching their choices by visiting MarketWave!

To be the exclusive contact for your company’s listing just go to:

Then click on your company’s name and sign up. If there’s already a contact listed get your name on the waiting list and we’ll contact you if the spot opens up.

Thanks. And Happy Easter!

Len Clements
Founder & CEO
MarketWave, Inc.

Podcast #6: MLM Grapevine, Ideal Health, Trump Network, LifeVantage, Legacy for Life, Usana, Nutrient Sprays, Cyberwize, BBB Ratings, Ann Sieg, Andrew Cass, Wealth Masters

Host: Len Clements, MarketWave, Inc. Founder/CEO

Podcast #5: Ted Lindauer, YTB Travel, Jeff Babaner, Stuart Finger (ITI), Watkins, Donald Trump, Ideal Health, BASE105, Zrii, LifeVantage, XanGo, Economy, BBB, MLM “Records” & Stats

Host: Len Clements, MarketWave, Inc. Founder & CEO.