Thank you, Mr. Gordon Pan, Mr. Richard Chuang, and Mr. Tony Randeiro for taking this time to attend to what I have to say.

What I have to say I consider to be of great potential value for your mlm organization. The ideas here are born out of not a little thought and experience. The motive for my speaking is to promote better, more effective and enjoyable ways to market the wonderful products which HTE has the privilege of distributing. I am sure that I am not the first to speak these things, or that these ideas are original with me. Nor do I propose to suggest or recommend details. I leave that to the more mathematically and organizationally skilful. I only submit recommended principles which I have no doubt will boost the morale, sales and success of HTE considerably.

In the past several months, I, and others with me, have lost the enjoyment I once had with HTE. Why? We have been placed, by the nature of the system as it now stands, under pressure to sell, to sponsor, to accumulate points in specific areas.  As well, we have had the disappointment of not having credit for points we worked very hard to receive. As a result, it has caused us discouragement. We feel as though we are being cheated and manipulated in directions which are not natural. We accuse nobody of deliberating such results. We only recommend ideas with hope for the good of all concerned.

For example: The system requires that, besides achieving certain volume point levels, we build supervisors to become manager, managers to become vice president, and vice presidents or several managers to become president. Why? Are not points enough? I can guess that in doing it this way, the designers of this plan feel we are building future business, establishing networks. I can surmise that this requirement is designed to encourage us to help the downline. But I think that it does not succeed in doing so naturally, healthily, spontaneously. There are many problems with this approach:

1) I have found myself building artificial downlines, doing all I can, and tempted even to do the unwise, to establish positions under me. The total volume itself has not been a problem.
2) I am discouraged, and feeling cheated in that, while I have worked hard to get the sales and points, and succeeded, I have not been rewarded accordingly, in that the positions are not in place.
3) The enjoyment or excitement of the sale is now significantly diminished. The sales are often now bittersweet. If the sale comes from the downline I need promoted to get promoted…sweet, but if it comes from another direction which will not help me get promoted in the short term, bitter. It is bitter because, while I remain in the level I am at, that sale puts that much more money in the pocket of my upline, and that much less in mine. Better to get that latter sale after I am promoted. Even when I get the sale from the right direction, it is bittersweet, because I know that while I already have the points for president, the president above me is making money that I think should be mine, which I do not get because I yet do not have positions in place. Selfish? So it is, but the system places me into that temptation and frustration. It does that with everyone. I have personally spoken with many who feel the same way, and understandably so.

Yes, we can talk about how we ought to work smart. But I did not recognize these things until they were upon me, and now I learn by bitter experience. Neither was there anybody advising me from the start on how to do the business as it ought to be done. Those immediately above me also faced and do face these same problems. While it could be argued that the fault lies with those who should have been there to teach, I perceive that if the system were set up differently, and more simply, we would not have these inherent problems, and there would not be the tendency to point fingers at uplines for their failure to train.

 

Yes, we can talk heroically about challenges, and that the strong face them head on. But isn’t life full of challenges as it is, without our creating more? Frankly, I dislike challenges. I think our job, as human beings helping one another, is to remove challenges, not create them. That is not to say that there is not need to require performance. However, my point is that while we perform, we are not fairly rewarded for successful efforts.

Why should one need positions below one? I, for one, will gladly help my downline, regardless of where each person is at, and have done so. I know that their success is mine if the system is set up that way. But now I help Suzie, who is not so inclined to do the business, instead of Bill, who is, because Suzie has a better chance of reaching manager level. If I get another manager, I get promoted myself to vice president or president. Do you see that the system as it is, with the requirement of positions established, promotes selfishness, inefficiency, and disgruntlement?  

Here is another example of built-in discouragement: As the system now stands, in my position of vice president, there is no incentive whatsoever for my upline to help me to president. As it now stands, while I receive 33% as a vice president, he makes a considerable income. But if I become president, his income is considerably decreased. Now every man can proclaim his own virtue, but I know human nature, being human myself, and that when it comes right down to it, a man is inclined, if not downright committed to helping himself before he helps others, unless he stands to ultimately gain sufficiently himself. If there is no incentive, no tangible reward for effort, he is quite inclined to decline. So my lack of positions below me holds me hostage, it encourages my upline to hope I stay there as long as possible, and I get frustrated. My uplines above me have also experienced the same frustrations, very much so.

In the second paragraph, I referred to the disappointment of not having credit for points we worked very hard to receive:

If you come freshly into the business, sponsor me, and I sponsor my wife, and my wife sells enough in a month to become a supervisor (which is easily done), thereafter you get no more of her points to your credit toward manager because she is two supervisors removed from you, a supervisor. That is deflating and counterproductive. If you put forth the effort to sponsor me and to help me sponsor my wife, and you and I help her to hold demos and sell, why should you not get the credit for those hard-earned points? So now you are tempted to stop helping her, though she is a winner, because it will get you nowhere for the time being. But we are told that we should help our downline. Yes, but given the system as is, with the requiring of positions and with the cutting off of points from those positions, which ones do we help? Let me show you some of the real-life consequences of these policies:

I sponsored a man, Nes, who, with his brothers, owns 23 health stores. He introduced the Chi machine into about eight of those stores, those under his jurisdiction. The other stores are under his brother’s control. His brother has been waiting on the sidelines, to see the success or failure of the Chi in the present stores. The day came when Nes put a booth at an event, I demo’ed for him, and we sponsored a lady who then went out and sold many machines. The trouble is, Nes did not get credit for those points because they were three supervisors removed from him. Even his wife under him did not get credit for the same reason in the same situation because she was two removed. Now I see that they are discouraged, our not anticipating such a situation readily and possibly signing that lady up under Nes or perhaps under his wife directly from the start. But why should we have? The sign-up went where it was rightfully due, to the entity sponsoring her in the first place. Yes, we could have signed her up elsewhere, but technically speaking, she was rightfully signed up where she was. Why the need for manipulation? Because of the rule of not getting points for two supervisors removed. The rule discourages credit where credit is due. Now let us take a look at the consequences:

Because Nes does not get credit for those points, and there are at least two such situations in his downline, he does not get to manager level with those points. Because he does not get to manager, I do not get to president. Because he is not being rewarded for placing sponsorships where they rightly belong, he is disillusioned and discouraged. Because of his "failure," over 2400 points are now in the process of loss (including the ones he was not credited with as a supervisor), and his brother will not commit 15 other stores, seeing the "failure."

It is argued that Nes set his sponsorships up wrong, opening himself to these problems, and that he did not spend time working with his downline. Fair enough. I agree. However, the system did not help but to exacerbate the situation. One store earned many points with a little help. Think what 23 could do! If he had not been denied points rightly his, he would not have been discouraged, I would not have been discouraged, his brother would not have been discouraged, he would be manager and I would be president by now. If he had not been required to set up positions under him, he would have done well. If it was simply a matter of selling machines (volume), we would all be enjoying whatever came along, motivated to do more. As it now stands, it is dead and distasteful. MLMs can be good; they can be bad. Let’s make sure this one is good.

I have other such situations similar in principle, where it cannot be said that the sponsorship was set up wrong, but where we are "robbed" of reward and spirit because of the described inherent weaknesses of the system.

Obviously it is felt that deadlines are in order. The company suggests in its literature that there are no deadlines nor quotas. While in certain respects that may be true, in others, certainly not. If to achieve a certain number of points in a limited time is not a quota and deadline, I don’t know what is. I have found myself under pressure to get my points and positions in 6 months or lose out. There I am, working hard to achieve, and I have this whip over me to work harder. I don’t need it. I am motivated enough first of all by the product and what it does for people, secondly, by the income potential at any level, and thirdly, by the levels of profitability I can reach if I achieve certain volumes of sales, however long it takes. I believe that to be true for most if not all others as well. Perhaps you can generate more sales more quickly in some cases but it also increases chances for potential burnout and discouragement. Why ruin the workers you have by turning them over for others when there is no need for it? Why germinate a breakdown of morale, and opportunity of criticism in the general public, as is so often the case with MLMs, when instead, we can exercise some patience and prosper every bit as much in the end, with favor?

Recommendations:

1) Eliminate not the requirement of positions (we need levels and goals to aim at) but eliminate the requirement of positions to gain positions. Let it be volume points alone. You will not see less performance, but more. Take the pressure off and you will eliminate frustration and discouragement.

2) Let credit be given where it is due. All points in my downline should count. I worked for them, earned them and should not be deprived of them.

3) Either extend the deadline times considerably, or eliminate them altogether. I realize that not having deadlines flies in the face of conventional work production philosophies, but haven’t we experienced many "upside downs" recently in many fields which have proven successful? We have a product here which works for all, is enjoyable to sell, sells itself, and which distribution is only hampered by artificial control means. Let us consider shedding these and enjoy what we have, with success as well.

No, I have not worked out the mathematics. Yes, that could be another matter, and not as easy as one might think. Or is it? That is, of course, in your hands to decide. I simply submit to you the disincentives I and others have sadly experienced, and I surely hope you will see your way to correcting them. I have no doubt whatsoever that if you do, there will be significant reward for all involved.

Thank you, gentlemen, for your time and attention.

Victor Hafichuk,
vice president level distributor
A156687

 

NOTE: Since the letter was written Victor became a president level distributor.

 

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