Wednesday, September 3, 2008

The Story of Your Holistic Life & the Reinvention of Customer Profit Sharing

For many years traditional retail companies have searched for ways to attract new customers by using positive product experiences from satisfied customers to attract new customers.  Companies like Avon, Stanley Home, Tupperware and Mary Kay used a type of referral marketing that eventually evolved into what is known as Network Marketing, Party Plan, MLM or Multi-Level Marketing.  All of these versions of profit sharing are not equal from my observation and study of network marketing.

As much as I try to remain objective on the subject I observe that when money is involved, greed and avarice gets creative.  Just look at Wall Street and the complex financial instruments that came from the mortgage industry which was basically a thinly veiled Vegas Style betting scheme using the public’s money by way of mortgage financing options with bets for repayment of mortgages and bets for failure of repayment.  Wall Street played both sides to “hedge” the bets, so Hedge Funds profited using the stunningly complex and sometimes ridiculous financial instruments named credit default swaps.

The same could be said for the Network Marketing industry as the “creative” impulse spawned more and more ways of attracting new business and creating wealth via aggressive recruiting.  What seemed like a logical way to capitalize on good products and good will turned into a Vegas Style casino game of lure, recruit and close the prospect, once you got them, you got them.
It would be remiss for anyone to say ALL network marketing companies have this culture of borderline deceit but I have to say, I’ve seen it all.  Am I an expert?  Absolutely!  One can only be an expert when they have accrued years of evaluation and have actually participated in the market form.  It’s one thing to view anything from the outside intellectually, it’s another to truly “know” it from the inside out as the experience of success, failure and the tedium of sweating the details on a daily basis is what makes someone en expert.  In other words, you have lived it, the good the bad and the ugly.

For years Steve and I were approached by the big popular MLM companies of the day so Steve and I evaluated each company based on the products, pricing, payment system, potential risk and culture.  If any of these failed to meet our criteria of sane business practices the answer was no.  So let’s just say there were hundreds of no’s.
That said in 1994 we were introduced to a company with a new version of network marketing, the first company to successfully use a binary marketing system for payment and had progressive, proprietary products that were the real deal; they were amazing for the time.  The marketing structure was safe, had little chance of financially hurting anyone and truly rewarded those that promoted the products and marketing system.  This is where the real story behind our company Your Holistic Life started.
The History of Your Holistic Life

 In 1991 my mom Emily Stoetzner was diagnosed with stomach cancer.  The emotional blow was devastating as she was the pinnacle of health.  After stomach removal, followed by chemo and intense side effects, she finally lost her life in 1994 the day after her birthday.  This affected me, my dad and my partner Steve profoundly.  With the stress and loss, my dad had a major stroke that robbed him of the ability to walk or speak normally.  The doctors placed him in rehab and on prescription meds for 3 months with little improvement and I was told he would not improve as the damage to his brain was permanent.  I wasn’t convinced or should I say I wasn’t ready to throw in the towel.
A friend introduced me to a network marketing company that had several great products, one of which was an OPC based antioxidant product.  At this time clinical studies on OPC’s were limited but the indication was that OPC’s (oligomeric proanthocyanidin) crossed the blood brain barrier and improved things like cholesterol level, blood platelet aggregation  and increased oxygen in the blood both of which might help my dad.

I placed him on an aggressive dose and immediately he responded with improvement in his speech.  After 3 months his walking improved drastically and he was speaking almost normally!  He even got a part time job at my buddy’s gym in Simsbury Connecticut opening the gym at 5:00 am each morning then he would work out after his shift.  My dad lived 13 more years golfing each day in Daytona Beach Florida and lecturing on World War II.  I guess the doctors didn’t see that one coming.  Of course we became strong product promoters for this OPC product and yes we made some good money promoting the product and system as there were no similar products on the market, this company was the only source.
In 2003 Steve’s mom was diagnosed with pancreatic cancer and in 3 months she was gone too.  His dad fell and ended up in a wheelchair and needed constant attention so Steve took care of him for 4 years.   Of course Steve made him take the OPC as it had a huge effect on his attention, mood and health.  Still our life was never the same as we were caregivers 24/7.  After Lou died life wasn’t the same.  We simply didn’t know what to do with ourselves as we always took care of others.  Now it was just us. 

Curiously, things took a turn for the worse at that OPC Network Marketing Company.  Once they became successful and the owners became wealthy things changed.  Everything became about the money.  There were yachts, amazing homes and sports cars that were flaunted and the real injury was that costs were increased to the distributors and products.  What was once a fair system with exclusive and fairly priced products became an expensive nightmare.   Steve and I were devastated and felt betrayed and foolish so we quit that company despite still making a solid income.  We just couldn’t be involved anymore morally or ethically.
In 2005 on a hiking trip in Sedona Arizona we had a heart to heart.  There was no other source of a quality OPC product and we knew for our future health, considering our family history of cancer and stroke, we wanted and needed a trusted source of progressive nutritionals including an OPC product so we decided to form our own company Your Holistic Life.  For 2 years I interviewed many manufacturers scrutinizing their credentials and ability to deliver what we wanted.  We funded everything ourselves by me working as a Realtor selling homes and Steve returning to Electrical Computer Engineering.  The 16 hour day was normal but at least we knew our company and products from the inside out.

In 2007 we came out with our first group of proprietary products including a premium OPC product that frankly eclipsed any other, a Greens Product, Joint Support product and a Whole Food Multi Vitamin all of which were sharply priced and a great value.  This is where things got interesting.  Steve brilliantly designed and built a retail ecommerce website, established credit card processing and we threw up our first group of products on the internet.  We told a handful of people we knew and overnight we had a decent group of customers giving us amazing feedback on the products and value, especially our OPC-AX™ antioxidant!
In 6 months we grew despite no advertising or promotion and we were stunned at even our modest growth.  We didn’t know these new customers so we contacted each one of them and asked; where did you come from?  100% answered that they were referred to our website and products by a customer that was already using and loving the products despite no incentive to do so. That was a revelation! 

So out of respect for our referring customers we decided to reinvent what we knew about referral / network marketing and add it to our company as it made perfect sense.  It took three years, but Steve, me and his brother Len created our amazing referral and Wholesale Membership system with no outside help or funding.  This way no one could tell us to put profit before people as we had complete control and ownership of our software and systems.  Normally this would cost millions to accomplish but we had enough talent between the three of us to sweat the details and do it ourselves while working regular jobs.
From our previous experience with Network Marketing we clearly knew what we didn’t want.  We hated the typical MLM hype and BS promising people to become millionaires, blah blah blah.  We hated how company’s forced distributors to buy tons of products each month for the privilege of making a few bucks pushing products or the “dream” on other people.  So we set out to create a hybrid business model based on quality value products paired with a Wholesale Membership business model like Costco® but with an affiliate style profit sharing system to reward people for referring others to the products.  Our products were great values even at retail price so customers were free to buy from our “Members” websites for retail thereby earning the Member the retail profit, simple.  So in 2011 we introduced our innovative Wholesale Membership.

There was no selling, no taking people’s money, no buying a garage full of stuff for people, buying hundreds of dollars each month to stay “qualified” or delivering products.  It was simply a quiet online referral.  In fact 100% of our Members enrolled to get our products for Member Wholesale saving them money like a Costco® membership.  The $19.95 to become a YHL Member simply made sense once a retail customer had a great product experience so the company grew naturally and organically.  Quality, Value and Savings are the backbone of Your Holistic Life and no one is forced to push stuff on neighbors or their family or buy tons of stuff each month.  We reinvented what a good wholesale buying system should be.  We are the change the industry needed.
So the real take away here is this question; why did we start Your Holistic life and who did we formulate the products for?  Was it for a “market”?  Was it to offer some hyped up miracle product that would make us bazzillions?

The answer is we formulated the products for US!  Steve and I wanted a dependable source for ourselves with the highest quality and efficacy so we could age gracefully to complement our lifestyle of active fitness and quality food choices.  This is how Steve and I lived our lives anyway but the missing piece was having products we could trust from a good company, so we decided to trust ourselves and formed Your Holistic Life.  It just happened that other people liked what we did and voted with their dollars.

We have done no advertising or promotion beyond word of mouth.  We still represent quality and value as the reason YHL exists.  We still stand by our standards of progressive formulations that are different from what is offered in the stores and are much better values.  One of the vitamins I recommend to everyone is something we do not even carry, vitamin D-3.  There is nothing I can do to improve D-3 or provide a better value than Costco’s brand so I stay out of that market, yet I recommend it. 

Our #1 product OPC-AX™; a premium powder to liquid antioxidant is quite another story.  Nothing on the market comes close, period.  No other company produces a broader range OPC based antioxidant for the price.  The taste is amazing so people love taking their morning “antioxidant cocktail” and the formula is an example of pure brilliance and innovation.  The retail price is $54.95 for a 2 month supply and is a hit with our retail customers.  Our Members buy it for $39.95 so it’s even a bigger hit at wholesale!
So to anyone who says all network marketing company’s are pyramids and don’t have “real” customers, I plainly say, that is a lie.  There are many that offer progressive products and value.  We have real retail customers who have no interest in becoming a Wholesale Member so they buy for retail because the quality and value are stunning.  Yet most of our Members come from being a retail customer first, then after seeing and feeling the difference our products make in their lives, they enroll as a Wholesale Member to save themselves money, just like a Costco® membership.  I don’t see Costco® being called a pyramid.

So in many ways I am critical of many MLM companies who have expensive products, deceptive recruiting practices and brutal buying requirements.  I simply do not think this antiquated way of marketing is pertinent for today.  But in my experience I have seen amazing products from these companies and many are beyond the quality and innovation you see in retail stores.  Who am I or anyone to say that marketing in a store is any better than buying online from a referral you know.  You just have to be your own advocate and become informed.  That said the common sins of the network marketing industry were bound to change.  I know of one very big and old network marketing company that has embraced the Membership business model and offers quality products that stress no one’s budget but actually save people money to give them access to non-toxic naturally based products at less money than the toxic store bought brands.  So I observe that the industry truly is changing.
As for me, Steve and Your Holistic Life, we reinvest everything into refining our products and expanding our product lines as needed.  We see the natural but steady expansion of our company as the result of our personal desire, intent, care and diligence so if we stay a small boutique company known for quality, innovation and value, so be it, that suites us.

Ferrari’s may be nice but at our age, naaah.  I’ll take hiking in Sedona eating amazing quality food (and drinking killer bourbon) as our version of luxury.  As for that Network Marketing Company that emotionally crushed us, we thank you for pissing us off.  Your Holistic Life would never have happened if you haven’t done that to us.  It was only a matter of time before someone reinvented the network marketing business model into something that properly served customers’ needs and gave them ultimate choice in how much they pay for products and IF they want to refer others to the products and reward them for this good will.  It was only a matter of time that it was us.
We believe in this new concept in Referral Marketing.  We believe in our products of high value.  We believe in offering choice to our Customers and Members and we believe we can help change a market form that had a dubious past into something that is new and fair.  We believe in Your Holistic Life!


By: Philip Stoetzner, Director of Product Development, Your Holistic Life

No comments: