Historical discussions of the ACN opportunity from Scam.com
Below you will find a fair use condensation of material from the scam.com forum. The views expressed are those of the original posters and not the editors or publishers of this site.
More detailed info can be found at ACN MLM networking business.
ACN Net Income
01/07 - The major issue I have with all of that kind of stuff is that they do not tell anyone how much money these reps spent in order to be paid that much. If I am paid $1 million, but I spent $1,000,001.00 to do it, I am worse off than the guy who made $10.00 and spent $9.00 to get it. The only income number that is important is the NET revenue, not the gross revenue.
In MLM, no one wants to talk about the expenses involved. There are always expenses. I would rather have $10.00 worth of incoming revenue and make $1.00 than to have $1,000,000.00 of incoming revenue and lose $1.00. The income numbers that are tossed around usually amount to nothing more than overhyped BS.
01/07 - It's from a Lightyear Alliance site... but it does paint a lovely picture, doesn't it? I only wish more people would see that before they join either company.
ACN Success From Home Magazine
02/07 - I seriously doubt that Video Plus owns any part of ACN. As far as I know they are 100% privately owned. However, Video Plus may own the Success From Home Magazine - which is nothing more than one giant advertisement.
Companies pay Success From Home Magazine to do a "story" on them - in other words ACN is advertising their business - much the same way they pay ACN to endorse them. There is nothing wrong with this at all but it is a little misleading.
Lightyear and Sherman Henderson III
02/07 - "Lightyear Network Solutions LLC has had its share of ups and downs since it was founded in 1993 by Louisville businessman J. Sherman Henderson III.
But the Louisville company, which emerged from Chapter 11 bankruptcy protection in March 2004, has proven that it not only can endure the tough times but can find a way to flourish.
In fall 2003, while still in bankruptcy court proceedings, Lightyear Network Solutions branched into the residential sector with a new division called Lightyear Alliance." *1
ADDITIONAL FILE INFORMATION
On April 29, 2002, a plan for reorganization of the company was confirmed by the U.S. Bankruptcy Court in Louisville, under Chapter 11 of the federal Bankruptcy Act, case #02-32725. This permits the company to continue to operate with court supervision until further notice." *2
*1 Obtained from bizjournals
*2 Obtained from the BBB
ACN Pyramid Scheme with Bogus Job Offers?
02/07 - I went to a lame ACN presentation after some scumbag sent me one of those myspace messages. I thought I was showing up for a job interview...why? Because he told me I was showing up for a job interview.
He told me to dress nice and everything. So I show up and meet his higher-up who is wearing a Gucci belt, meaning this is the place to be if you want to be able to afford ugly, bulky, awkward Gucci belts.
I get a tour of the building, lined with walls covered with a bunch of framed Asians. "This guy makes $200k a year, this guy makes $250," and so on. He just made up some huge number for every guy and said how great they're doing. "He just bought a house in Hawaii." Sure he did.
Then he started asking me what kind of music I like, feigned an interest in it, but then I caught him when he didn't know that Led Zeppelin sang "Stairway to Heaven." That's not important. Next came the "interview."
It consisted of a propaganda video followed by a presentation. There were a lot of people there, half of them were already ACN wanna be's, the other half suckered in to come and meet them. Every time the presenter spoke, the ACN carneys would say things like "that's true" among other positive reiterations.
The meeting wrapped up and this loser turns to me and asks how $2k per month sounds, well it sounds too good to be true, because it is. So maybe the company itself is not a scam because the people on the very top are doing well for themselves, but they are playing people for suckers.
That makes it a scam in my book. They rely on "recruiting" because "recruiting" forces the recruit to purchase the product. They know he/she will not be successful selling it, but they might sell one to their parents and sucker 2 friends into "recruitment," meaning they will have to purchase the product too.
After the brainwashing wears off the recruit becomes disenchanted and gets a real job or goes back to school. This doesn't matter to the company because the sale was made. They now have this phone service and are likely to stick with it because people are lazy and like to avoid hassles. They continue their brainwashing elsewhere.
Anyways the rep knew I wasn't interested so he didn't even mention the $499 license fee. I thought all I had to do to sign up was buy the phone service, which I, under no circumstances, was prepared to do. I found out about the license in this thread.
Network Marketing Scams
02/07 - You are driven by greed and greed alone. You probably don't have very many good friends friends outside of ACN. You probably prefer "networking" to socializing, "potential recruits" to acquaintances, and "pitches" to conversation.
Promoting ACN Fortunes by Flaunting Bling
Showing off mansions.
lots more links from youtube
ACN Telephone Company
02/07 - From what I hear it sounds like ACN has partnered with InPhonic (a vendor for all the cell phone companies). MANY other MLM companies have partnered with InPhonic to provide cell phones and they've been doing it for years (Cognigen, Lightyear Alliance, FHTM, 5Linx, etc).
Having said that InPhonic has a standard web portal in place so establishing a relationship with an affilliate company is actually very simple so I wouldn't be surprised if ACN actually comes out with the wireless offering when they say they're going to.
03/07 - explanation of how ACN works in PORTUGESE market.
Multi Level Marketing Opportunities Scam
04/07 - ACN's business itself is not a scam; the whole process of recruiting sales reps is. Clearly ACN does not hold a sizable share of the market compared to AT&T, Verizon, Comcast, etc.
So where does the revenue come from? Well, not surprisingly they have more sales rep than they do customers. No doubt the revenue comes from monthly membership fees, "business start-up kits", and whatnots.
Unbelievably, ACN consist of so many reps that it leads to a tight competition. So many reps selling the same product of service. It's good for ACN, but not for the reps. Unlike other businesses, an ACN rep is paid depending on the number of sales they make.
A Best Buy rep, for example, is paid by wages + commission, so he/she gets paid even though he/she did not make any sales.
MLM companies do not care how many "reps" they have because these reps only make a fraction of the sale.
Here's some Accounting 101 for some of you:
These are made-up figures, but the model is exactly the same compared to MLM companies.
If a rep sells a phone equipment for $100, he gets 5% of that sale, or $5. ACN gets $95. If the rep doesn't sell any phones, ACN will not lose any money.
However, because reps have to pay a certain monthly membership let's say $24, ACN gets the benefit of having unsuccessful workers.
The monthly income formula for this particular example is: income= 0.05*(s)-$24; s= sales.
The monthly income formula for a BB worker, assuming he works 160hrs a month (40hrs a week): income= $1600 + 0.05(sales).
Hmmm....that means no matter how much sales you rake in as an ACN rep, you will never make as much as a Best Buy rep. Well, there's always the "dragging people into the mess" way.
You can make $500 for each rep you recruit, but I would hate to be the recruitee, being promised to make a lot of money, but the truth is the only way to make money is to drag people into the mess. Eventually there won't be anyone who is stupid enough to be dragged in to the mess.
ACN Communication Services
04/07 - It's also important to point out that in ACN, Lightyear, 5Linx, and any other service based MLM progarm - SERVICES are REQUIRED to be sold in order to trigger an income earned for recruiting. These companies also require you to maintain a certain number of customers to be qualified to receive this income.
These companies offer legitimate services that are already being used by the general public. We are not selling phone service at at 500% mark up so we can pay commissions off of it. Our companies offer the same (if not lower) price than our industry competitors. No one can argue the legitimacy of our product.
As for being paid for "recruiting." That's not what we're paid for. We are paid for coaching. When someone joins these companies by paying their fee, no money at all is paid out. Customers must be gathered. The person doing the "recruiting" must help that person through coaching on how to begin to gather their customers. That is what releases the bonus to the enroller and their upline leaders.
When a real estate broker has an agent sell a home, the broker gets an "override" of the agent's commission. How is that any different? The broker doesn't employ the agent. The broker recruited the agent, helped get them trained and taught them how to sell homes. The benefit for the broker is leverage - they now earn a commission when agents sell homes.
ACN Scam or Not?
04/07 - So you are admitting MLM is a pyramid and it is necessary to recruit poeple. However, there's a fine line between the traditional business model vs MLM's. Without the owner, the workers wouldn't have jobs in the company.
The owner started up the business with his own capital and idea, and with risks and hard work he was able to grow his business. Therefore he should be rewarded. The workers, on the other hand, can work hard and earn promotions for their reward.
Now with MLM's business models, you're saying the only hard work, if it is at all, is recruiting people. There's no risk or capital involved. You can recruit 100 people and if 90% of them are making money, you're making money.
But those 10% who aren't are screwed, but that doesn't affect you because you can either recruit more people or depend on the people making the money. Heck, there's no decision making at all.
Is there skill involved? Sure. Find the hardest working person looking for work and sweet talk him into this "fantastic opportunity". You don't really care if he makes money. You already made money when you recruited him in bonuses. This is indeed unethical.
ACN Network Marketing
04/07 - The point of Network Marketing is to create a SYSTEM of people that you empower to eventually work independent of you. Saying that we don't care if people don't do anything when they join our business is absolutely rediculous! You're absolutely right, the more money they make the more money I'm going to make - so what sense would it make for us not to want them to succeed?
People are looking for (or at least they should be) a vehicle to create a passive income stream in their life. Network Marketing is just a vehicle/opportunity to accomplish that. Investing in the stock market is a vehicle/opportunity to do that too - is that guaranteed? How about Real Estate investing, is that guaranteed?
I think Network Marketing is amazing because it allows any person a way for just a few hundred dollars to be able to create their own system of passive income. The truly great part is we get to build that passive income by empowering other people - not taking advantage of them.
Yes, we do want to weed the people out who aren't right for this. We try every day when we speak to potential business partners. Again, the problem is these people will say all the right things and then join and then they do nothing.
For example, last month a gentleman responded to an advertisement of mine. The ad said, "Create a passive income by working around your existing schedule." I spoke with him for about 15 minutes, found out who he was and what he was looking for.
He told me that he was a CPA and now that tax season is coming to an end he was looking for something he could do to supplement his income. I then sent him to the same website as above so he could view a presentation.
I followed up with him and we spoke for about an hour. Most of that conversation was working out a plan of action for him. We worked out how many hours per day he'd need to invest and made sure that he understood it was going to take him sacraficing some of his free time to make this work.
He understood and thanked me for my honesty. The next day he decided to join. After he joined, we walked him through the training process and began to build his business. I walked him through gathering a few customers which earned him some initial income.
We then started talking about growing his own team of agents and we worked out a strategy to do that. He said to me, "wow I can't wait to start talking to people about this and growing my team, I'm going to really make this thing work."
I agreed that he had a lot of potential and that I was excited about helping him. We then set up an appointment for me to get in front of some of his contacts. He never showed at the appointment. I was there, ready and willing to help him build his business. He wasn't.
I committed to help him build his business. Initially he did too, but didn't follow through with it. My question is, is this my fault or his? Should he have joined, probably not, but not once in the time of doing his research was he convinced or sold to do anything.
You'd actually be surprised to know that a lot of the attrition in this industry comes from situations a lot like this. There really aren't a lof of people out there maliciously trying to take money from people. Yes, a lof of companies pay a bonus for helping someone get going in their business - but that bonus is nothing compared to what someone could earn by helping that person build a solid income.
I personally feel that much of the attrition is caused by a psychological issue. It's the same issue that people deal with when it comes to diets, exercise, etc. How many times do people pay $150 to join a gym and go for a month and then stop, but keep paying the fee?
How many times have peoople spent $1,000 on a Bowflex or treadmill only to have it collecting dust in their garage? There are some people out there that really have no intention of making their life better - they just want the "possibility." These are the same people who honestly hope that they'll win the lottery.
If it were at all possible I would LOVE if these people had a tatoo on their forehead that said, "don't let me join, I'm lying to you, I'm really not serious about improving my life, I'll never listen to what you suggest I do."
So, we are not in the business of recruiting reps, we're in the process of sorting people out. We are looking for people who are ready and committed to improving their life. As long as people are doing that ethically and morally then this is a very legitimate industry.
Yes, there are going to be dishonest people in MLM. However, I'd bet there are 10 times more in regular corporate America. It is completely unfair to label all MLM companies as scams or illegal pyramid schemes just because of a small few companies.
Is ACN Legitimate?
04/07 - All I have to say is that, after research and deliberation, ACN's MLM business model is not a scam. Legally. All one must do is realize the simple math to understand how the company simply leaps through a loophole in the legal system to maintain it's prosperity, unlike the recently defunct competitor Vonage (spending too much on ads). Here's the math, correct me on the specifics.
We will look at the profits over the course of 2 months from only 2 week's effort for modelling purposes.
I'm a new recruit. I just dropped five benjamins for a packet full of training and a mass-produced business license. I have the time and resources over the course of 2 weeks to successfully engage ten people in the company, either as customers if the simple digital voip service or by starting them off as reps. As a QTT (1st level), i need to level atleast 2 new recruits to receive my $750 bonus.
I can also (as the model states) sign 8 customers, paying $23.99 a month for phone service. Assuming that my recruits were unsuccessful, I made $750 - $499 + (8 x $2.40 x 2 months), or $289.40. ACN just made more than that, though.
They got three recruits (including me) and 8 new customers paying $23.99 a month, which totals to $1092.46, even after paying me my dividend and bonus. Not too much of that money will be spent on actual services (believe it or not) for those 8 customers, not to mention the purchase of voip boxes adding in some additional revenue.
Now how about going after customers only, what the presentation claimed to be the true source of income. Ten customers for two months, but no new recruits (so I'm still a QTT), ends up rendering 10 x $2.40 x 2 months - $499 = -$451. I'm now in the hole for almost as much as I paid. It would take me a year and almost 9 months to make back my entry fee, but after a year, I would have to renew it.
So unless i was working my buns off for quite a few customers (the 'real source of income', remember) and got atleast an average of 2.66 customers per month for the first year, I would be paying back all of my salary to ACN. ACN is making $930.82 off of my activities alone after the same 2 month period.
What if I went for an even number of recruits and customers. This would boost me to the second level ETT, which comes with a $1k to $3k monthly bonus, assuming either I am making new recruits or signing up new customers.
That's the $750 starter bonus back, plus a hypothetical $1000 bonus for being ETT, plus my pittance 'residual income' from my actual customers. This totals $1275 after 2 months residual gain. 98% of that chunk of change came from bonuses for being up-leveled and adding recruits. ACN made a killing off this venture, totalling $1459.91, still outclassing your personal income (duh).
Now how about the possibly most lucrative spending of my resources, by bringing in 10 new recruits. ACN just made $5489 in flat cash in 2 weeks off of one guy, minus the $1750 for me it ends up being $3739. I only made $1251, but assuming that atleast 2 of my recruits are stable (the average rate of 'success' is 20%), i would be pushed up more depending on their performance, possibly to a higher level with more bonus money.
In all of these scenarios, ACN is banking more than you, especially when recruiting is the focus, not signing new phone customers.. One recruit is easily more valuable per year than one customer: $499 vs $287.88. This is why MLM works: the guys that founded it are fat and happy, and the rich get richer. Yes, Donald Trump endorses ACN. It's a no-brainer why: the company's business model is genius.
If I had been the guy to first form a legal pyramid-scam-like network marketing system, i would be retired from the 'residual income' of getting checks in the mail for company royalty. It's the same reason that free-to-join network marketing doesn't work: it isn't lucrative enough.
If you were a business exec forming a company like ACN, would you drop a figure or two off your salary in the name of ethics? If you're like nine in ten Americans, you wouldn't.
ACN isn't a pyramid scam because it actually does do something externally productive, but with a very low recruit success rate and a high starter's fee, a very healthy sum of that cash flow is from the actual employee recruitment level (say what you will, but ACN does effectively employ you, even though they say they don't).
I will not deny the legintimacy of the company, or the legitimacy of the success stories of ACN reps. But the success stories are hard to come by, and the net cash flow always concentrates near the top, where the minority resides.
The $2.40 you are referring to is more like $0.24 cents per customer(in order to get paid 10% on your personal customers the rep needs to have a total billing volume of over $10,000).
Exposing the Truth about ACN
04/07 - ACN total North American TC promotions from Jan 1, 2007 - March 31, 2007 = 19 TC PROMOTIONS (Jan-9 TC Promotions Feb- 7 TC promotions Jan- 3 TC Promotions)
Folks, this is information straight from ACNs corporate emails. Please do the math (although you won't be able to because they won't disclose the total amount of reps entered into the system which I wouldn't expect them to.) 19 TC promotions in the span of 3 months in the ENTIRE company in North America is EXTREMELY low.
More importantly, let's look at the first 2 earned positions.
ETT - ACN usually changes the qualifications on the ETT position each month. But recently they have had it in the general area of for the minimum qualifications of 10 personal customer points and 2 personally qualified TTs. However, hitting the ETT position DOES not automatically qualify you to earn a bonus that will meet or exceed your initial start up back.
They have made their "30 day bonus" qualifications as follows. A person who personally hits ETT AND collects 20 personal customer points during their first 30 days. Only then will ACN cut them their "30 day promotion" which usually is a bonus that exceeds the $499 start up.
This is very important to look at because I'll take a guess and say that probably around 35-40% of the new ETTs gather 20 personal customer points in their first 30 days.
Let's break it down a bit further...
ACN has promoted a TOTAL of 414 ETTs in 30 days in North America for the months of Feb & March. Folks, I know RVPs who have months that bring in 3 TIMES that amount into their organizations in a given month.
Out of those 414 ETTs, let's say that around 40% gather 20 personal customers. That would mean that a TOTAL of 248 NEW reps made their initial $499 back within their first 30 days in ACN in the last 2 months.
248 TOTAL REPS making their money back in the last 2 months is an EXTREMELY low percentage I'm sure for the amount of reps coming into the business. VERY VERY LOW. (Again this number could be slightly off it's for example purposes. 414 reps should be completely accurate given from ACN corporate emails).
Let's look a bit further...
Everyone seems to speak about the ETL position. ACN has only promoted a total of 250 ETLs for the months of Feb & March in North America. Folks, think about this one for a second...the ENTIRE company in NORTH AMERICA has only promoted a total of 250 ETLs in the last 2 months.
Keep in mind some of these reps could be people who have stuck around for the lost hope who just so happened to sponser a couple of people. 250 TOTAL ETL promotions for the last 2 months is extremely low.
Somethings ACN will have on their side...
-15 year old company
-Largest Direct Selling Telecommunications Company in the world
-Operating in different countries
1.) Very solid 15 year background. ACN will never have a problem as far as the corporate strength because the compensation plan benefits the CORPORATE side and FOUNDERS. The lack of strength in their compensation plan clearly shows this.
2.) They are the largest direct selling company in the world...no question about that. But that goes back to the time they have been around. Just give it sometime down the road when new companies have the chance to catch up in growth.
3.) They absolutely are operating in different companies. And, I would hope by their North American numbers that they are experiencing much more success overseas. I know George and Art have Europe on lock and are blowing it up.
4.) All of the new reps seem to bloat about "We have Donald Trump". I love Donald Trump but he is NOT working ACN.
Most importantly, what do any of those things have to do with how YOU (the rep) gets paid.
I'd like everyone to understand that I am NOT against ACN. As I have stated before, I owe a lot to ACN. However, there comes a time when people need to really open their eyes and realize that YOU should be rewarded for your passion and action. If you're in ACN I can promise you that your corporate team will never crumble because the compensation plan rewards them. But didn't you get in this business so you could CREATE YOUR dreams?
Just a thought...
Numbers don't lie.
04/07 - So, I have a question for ACN reps...
When you guys do your presentations and follow the 1 through 9 system, when you get to the example of exponential growth with residual income (you know, where you say "you get 2, 4, 8, 16, etc...") - do you point out to the guests at the presentation that even if they completed that exact organization that they wouldn't earn a penny of residual income from that 7th level?
In other words, even if 128 reps developed on the 7th level and they all had 20 customer points (:rolleyes: ) and those customers all spent $38, that rep wouldn't even be qualified to earn the huge 7% commission from that level. Why? Because they would either need 40 active customer points or 20 active customer points and 5 FRONTLINE QUALIFIED Team Trainers to be qualified to earn from that 7th level.
Furthermore, that rep would have to make sure that all 5 of those frotnline TTs ALWAYS were qualified. So, let's just say that a rep goes and gets their 5 frontline people and builds a sea of people under just those 5 people. Then 3 years later while you're sitting on a beach somewhere and one of those 5 people decides to drop out of their qualifications. Guess what? You are no longer qualified to get paid on your 7th level.
05/07 - The example is customers.....not customer points. A customer can be between 1 point to 4 points. If someone had 20 customers, they almost assuredly have 40 customer points and qualify for 7th level pay.
05/07 - That is a bunch of crap. That is not what the example is meant to say. It is not interpreted as customers vs. customer points. There is NO distinction between the two.
If that were the case, many of the ACN leaders wouldnt make this comment during the presentation... "Now imagine when you add cell phone customers, voip customers, etc, Couldn't that monthly bill easily be $200 as opposed to $38"
ACN Customer Points
05/07 - There is a huge distinction between the two.
A "Customer" is a person or business that pays a bill upon which we are paid a residual income.
A "customer point" is a system adopted by ACN to assign points for qualification purposes such as earned positions and 7th level payout.
When we say "Customer" during the presentation, we are talking about a person paying a bill of some dollar value. "Customers" are translated into "customer points" by ACN. A customer point has no dollar value.
The example Ben speaks about clearly says in black and white "Customer" and then assigns a dollar value to this "Customer".
A "customer point", by its very nature, has no dollar value and could never have a dollar value.
Therefore, "Customers" and "customer points" are mutually exclusive items and could never be confused as the "same" except by someone not understanding the definitions of the items. As Ben and you have done.
You correctly stated that an ACN presenter could accurately state that a value of a "Customer" could be $200 per month. This is 100% accurate. The value of a "customer point" could never be $200 as "customer points" can never have a dollar value. A "Customer" always translates into "customer points" in the ACN compensation plan. A "customer point" is never a "Customer".
It's simple really!!
ACN Network Marketing Business
05/07 - Years ago before I ever even heard of ACN or direct selling, I was tricked when I was looking for a job and answered a classified ad in a local paper. When I got to the hotel for the interview, I discovered it was an opportunity briefing for a water filter company. I left immediately. But, that did NOT give me a bad impression of direct selling, just a bad impression of THAT company.
When I was introduced to ACN several years later, that experience never entered my mind. If everything you've said is actually the way it happened (and I understood it right), unfortunately, some reps act this way because they have a "selling" vs. "sorting" mentality about their business.
With a "selling" mentality, you're always trying to convince someone to join your business, and you don't want to "lose" someone or "let them get away." So you say things that will get the person to come see or even join the business.
With a "sorting" mentality, you're only looking for the people who are genuinely interested in an opportunity to improve their lives. You're not trying to "get someone in" by convincing them; you're actually trying to see if they "qualify" for your opportunity.
When I've gotten people who were obviously looking for a job, I clearly let them know upfront that I'm not offering them a job but a home business opportunity. Sometimes, these people have such an employee mentality that I've had to reiterate this fact several times to make sure they understand what I'm offering them.
Once they completely understood, most people said they were not interested because they needed a job; a few people said they were interested in an opportunity and agreed to meet.
But, every one of them said they appreciated me being honest with them upfront. As a result, I got some of them as customers or left them with a very positive attitude about me, ACN, and direct selling in general.
The Reality of a American Communications Network Inc Career
05/07 - A rep works hard to get to the top of a position, builds 3 or 4 or 5 legs ( what ever the comp plan is ). They are making 30k or 50k, whatever the amount. eventually a few people or more, hit the same position, in every pay plan they get cut off or get cut off after 1 or 2 generations.
SO they go from making 40k down to making 25k or 15 k, they have 2 options, go to work and produce new legs, which most havnt done in years and wont or blame the comp plan and leave.
THIS HAPPENS IN EVERY COMPANY that sticks around or has large production. THIS IS THE REALITY OF OUR BUSINESS.
ACN Management and Recruit Attrition
05/07 - Of course any rep leaving a company doesn't mean the company is bad. I don't think that's what people are saying. I think the issue is one of credibility. Before these reps left ACN there were National events where they were speakers on stage and recognized in your publications as being top producers and representatives of what makes ACN good.
Now that they've left the company is saying they never really where that successful and it was all their hype. Well, you can't have it both ways. You can't hold them up to be Gods to the field and then when they leave try to tell those people that they weren't really successful.
I think this is the issue people have.
It would have been a lot better for ACN corporate to say, "AM (initials of course) a former SVP has decided to go into a new direction in his life and we wish him the best for his future."
I don’t like the idea that a rep can build a business in ACN, build a residual income up to a point they are satisfied with. Then decide to relax and enjoy their time and money, and the consequences from that decision could be drastic.
I feel, that if that fact is made clear to reps in the beginning, and they knew that other companies Code reps residuals to protect you from that, they would chose the Coded company.
05/07 - I am in favor of a coded system - at least Lightyear's anyway. There are many reason's for this.
First, if a rep reaches TC in ACN and that person needs a certain number of TC's in different legs to reach RVP then that means they're going to have to bust their butt to help their team build in width and depth.
So let's say a TC is working hard building a leg. Let's say it takes them 6 months to build that leg into a TC - they've been doing PBR's and calls with all those reps in depth, helping their reps build - then the moment that person reaches TC they are cut out from the T-CABs.
All the relationships they've built with all of those people under their TC is now generating no income for them. The result, they have to start all over, with no leveraged income.
In Lightyear, if someone is a RM and they need a certain number of RM's anywhere in their RM group to reach VP then they're going to do the same thing - build in depth. When they enroll someone on their first level they are fully "coded" to that rep.
The upline RM is going to bust their butt to help that rep bring in additional reps and help those bring in reps to help them get to RM (all of these reps the upline RM is coded to). This is why I like a coded system better. The upline RM will continue to build depth and security (leadership) under their team.
In other words the upline RM is working in the Manager and Senior Manager "codes" of their downline rep. Their downline rep may have promoted to RM and is now building their own RM group (still generating residuals of course) - but the incentive here is for the upline RM to keep building with their team - which makes sense - because they've already been creating the relationship with them.
This is a nice situation because the upline RM doesn’t get cut out from everything they’ve spent time building.
ACN Success from Home
All I will say is that ACN has grown every year and continues to grow, if you dont agree with how we do things, that is fine, but the bottom line is we are growing ( which is even a better story considering how big we are and still growing ). WHEN YOUR company is doing as well, then you will have proven your point, UNTIL then what you have is a theory.
ACN Acquired Excel Canada
05/07 - When Excel went out of business in 2004, ACN purchased Excel Canada, so many of the leaders who are building successfully there came from Excel Canada. That operation has only been in business for a little over 2 years so I guess you could say it's new.
However, ACN had their own operations up there for many years, and Excel Canada was around for a long time - so it's certainly nothing new.
05/07 - From what I can gather using my limited analysis, is that ACN opens itself to new markets with a brilliantly conceived and constructed presentation and recruitment plan.
However due to the structure of its compensation plan, most of the income generated by reps is through bonuses from new recruits. Only in far higher tiers can one hope to generate substantial residual revenue streams from actual billing.
Because for most reps, income will come from getting new reps into the game, the initial response from the target market will be big and fast. A lot of hopeful people will get in quick, and the people who start early will earn big bucks from downline recruits.
But as the market gets saturated and the initial hype dies down, people quit and revenue streams for reps get cut off. Some reps will persist, but with more modest earnings compared to the initial phase.
Now a question I have for you guys is: do you feel it's ethical earn in this way (making money off new recruits), when you know most reps won't make back they initial $499 they invest?
Also there's the ethical dilemma put forth that a lot of these new people are being mislead by bloated figures (as stated in the presentation given to me), and by the tactics ACN uses at seminars.
ACN Business Success
06/07 - ACN Co-Founder and President Greg Provenzano always says at the start of every international training event (just like the one we're having right now in Detroit) that 80% of the population within a 5-mile radius of ACN headquarters have NEVER heard of ACN before--and ACN has been part of the Detroit business community for 15 years! So, if that's true where ACN is located, what is it like everywhere else?!
It is always a good time to start, but the best time to start is NOW. The opportunity is always the same. The only difference is the people who got in earlier have had more time to build their businesses to some successful level. Saturation is really one of those long-standing myths in direct selling (and in traditional businesses as well).
It's not surprising that even with all your business knowledge, you haven't heard of ACN. ACN does not advertise like traditional businesses. Before our company websites (www.ACNInc.com and www.ACNIntegrity.com), Success from Home Magazine (March 2006 and April 2007 isssues), and Donald Trump's endorsement, the only way the general public heard about ACN was literally by word of mouth.
Actually, your business knowledge could be the biggest thing that gives you great success in ACN or causes you great failure, depending on how you use it. If you *see* as an entrepreneur, then you'll probably be open to direct selling as one of the 3 best businesses to be involved in (the other 2 being franchises and traditional start-up companies).
If you *see* as corporate professional, then you'll probably be skeptical of direct selling and buy into all the negative stuff people say about the industry.
The Problem with ACN
06/07 - The reality was that ACN had many problems over the years that destroyed and eroded the customer base that was built, and new customers that were acquired. This unfortunately has been going on for many years, it hasn't been just one mistake( ACN's original cellular venture, Commercial Energy, Residential Energy, a flawed Voip and Video Phone product, Qwest controlling our customrs, credit issues, paging, etc...
Now I understand that this is business, and there is always risk.
Unfortunately , when you are dealing with independent rep who are commission only, they have a choice to stay or leave.
ACN has never acknowledged these problems, and did nothing but watch the reps blow up their groups because ACN made poor decisions.
Our team could have kept acquiring as many new Electric and Gas customers as we wanted, but they ALL purged off and we didnt get paid .
We could have acquired many new Voip customers , but they were all disappointed and left the service.
For someone to come up here and say that leaders left because they were too focused on CABS is silly.
The reps were the solders on the frontline, and we were the ones that lost our teams because of these decisions.
These customer losses resulted in positions being lost, and income going away.
ACN Business Scam?
06/07 - In ACN, in the beginning, your immediate bonus income greatly exceeds your long-term residual income. As your business grows over time, your residual income starts to increase and approach your bonus income.
Eventually, your residual income exceeds your bonus income, which occurs at the VP positions. Residual income is the ultimate target. And residual income comes from a large customer base, which comes from a large rep organization. And bonuses help to fuel recruiting a large number of reps.
The problem is most leaders and other reps have focused on recruiting reps to get the upfront bonuses as the goal instead of realizing that bonuses from reps are just the catalyst to get them to the real goal, which is residual income from customers.
I personally know that leaders were teaching this to their organizations either diectly or unintentionally. I was taught it and did it, but soon found out we had the wrong focus. Many leaders started to realize it and tried to change it, but it was too late.
They had created a monster that couldn't be easily destroyed. As a result, a lot of their organizations imploded.
06/07 - 1st, ACN did NOT lose our electricity customers. I'm still an energy customer and have kept all of my energy customers. And all my energy customers STILL count towards customer points.
I'm still paying the same rate I was paying 7+ years ago when I first signed up. So, for customers, nothing changed. Reps lost their own customers because they viewed ACN exiting the energy business as a bad thing and didn't proactively retain their own customers.
2nd, ACN did NOT make the wrong decision regarding digital phone service. Vendors always tell ACN what they can do, but a lot of times they don't deliver as promised. ACN's response was to build our own digital phone network optimized for voice and video.
We're the only direct selling company to do it and probably one of the few companies period that has done it. Now, I've had my digital phone service for 13 months, and it has never worked right (but neither had Verizon VoiceWing or Vonage when I had them before we launched our service).
But, that was not something to get upset about and leave the company. I just got my customers on traditional phone service until our new digital network was up and running. Now, I'm on the new network, and I'm having absolutely no problems with my service.
3rd, lowering renewals will not keep people in the game. Now, I wish we didn't even have renewals, but I think it's required by the government. If that's the case, then I do wish they were lower or also covered website costs.
But, let's be real. At $149 a year, it only cost's $12.42 a month. An ETT can produce 2 open line (not necessarily frontline) QTTs in a month and earn $200 that month. If a rep cannot produce 2 QTTs to earn $200 in one of 3 months (2 months before renewal date and 1 month after), then they're not even planying in the game!
ACN Convention Fees
06/07 - ACN does NOT make money off international conventions, distributor websites, sales materials, etc.
ACN doesnt make money of International Conventions????
Well I'm not saying that they do, but most of ACN's National events, cost $99 (early bird) to attend. I would guess-timate that the average attendence ranges for 8K to 10K people in attendence.
On the low-end that means $792,0000 is made. On the Highend $990,000 is made.
Now Im not making any claims here, but does it cost that much to host a national event???
So why then does ACN charge $7.00 a month to look at your downline reports? I'd consider that a VITAL tool to build your business.
Why do they charge a fee for every check they send out? I never understood this when companies charged $3 to send you a check.
ACN Rip Off
06/07 - It's not a question of how much they're charging for these things, the question is WHY? Isn't ACN the biggest and the best?
Of course it costs money to pay IT people, but ACN is supposedly a $500 million company - surely they wouldn't need to charge hundreds of thousands of people $7 a month to look at their downline report. All it takes is 1 person to create the downline reporting system and then monitor it.
Then there's the check fee. Why on earth do they have to take $3 out of every check they send? If you're getting weekly checks and your residual check that would be $15 a month in fees. Last I checked it's actually very cheap to send bulk standard letters - certainly not $3 each.
So then why does a company charge these things? Simple, for the same reason Excel did - because they can.
There's what 400,000 reps in ACN worldwide (probably a lot more). That's one heck of a base of people to look at and say, "hmm, if we charge them $7 a month we could be making $2.8 million PER MONTH just off their downline reports." "If we charge them $3 per check we could be making another $2 to $4 million PER MONTH from their check fees" - not bad.
Yes, every company is entitled to a profit, but isn't that what the customers in ACN are for? What happens to all of the money that people don't qualify for? What happens to all the bonuses from the reps that join and those people never get their 5 customer points?
What happens to the residual income if a rep in the organization doesn't have enough customers to be qualified to get paid on certain levels of their downline?
Yes, I'll agree, ACN is the biggest and they have made darn sure that they stay that way. The question I have for you is, how on earth do you think all of the above is ethical?