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Hello. My name is Alan Paterson and I built up a Kleeneze business between 1993 and 2000. My total turnover rose to £70,000+ per month and was rising. My income was aprox £3000 per month. Why did I resign? Read on..........
This report is intended as an account of my personal experiences with Kleeneze.
I started with the company in 1993. An instant advantage. In my opinion it is almost impossible to fail to make money with a MLM during a growth phase (providing you are recruiting). I recruited 5 people and began helping them to do the same (the text book MLM strategy). Within 8 months I was earning enough money from my business to quit my job. My income was £1200 BEFORE I put out any catalogues.
Why am I complaining you may ask yourself. I began to analyze the Kleeneze business and over the years began to see fundamental flaws with the programme. These flaws - in my opinion - would eventually cause the business to flounder.
What are these flaws? Read on:
> Kleeneze was expanding at a geometric rate. The population of the UK could not sustain such a growth. To put it simply - the "growth phase" of an MLM company is the time that it is relatively easy to get to "the top" of the network. Little skill is required. Just keep introducing people and ride the growth wave of the company. This is why people get up to the £10,000+ per month cheques. No skill just the mindset to introduce more and more people into your organization at the right time. I spoke once with the (then) owner of Kleeneze at one of the company functions. Although he was quite drunk, he admitted that the growth phase could not be sustained and the business would level out. I estimated that Kleeneze would continue to grow up to aprox £100,000 and then "level out". When this leveling out occurs it would then begin to become very, very difficult to recruit people and retain them. I predicted that many areas in the country would be "saturated" with Kleeneze catalogues - some streets receiving two or three catalogues per week! I saw that this would have a heavy impact on recruitment, retention and above all public opinion. If you are a new agent that has recently joined the business and cannot recruit - don't worry! You are not doing anything wrong. As the business continues to expand it becomes more and more difficult to recruit people. If you had joined back in 1991 (the optimum time) you would have a whopping cheque too! Finally I predicted that after the growth phase, turnover would level out and eventually (after a time) start to decline. Why would it start to decline? Read next point.
> The next fundamental flaw is the attrition or "drop out rate". Back when I started the drop out rate was not high. However towards the end of the late 90s the drop out rate of agents became higher and higher. As more and more catalogue distributors hit the street some areas started to become heavily hit with Kleeneze catalogues. Agents were getting sick and tired of "overlapping" other agents with their catalogues. The customers did not take kindly to this either. The attrition rate of distributors quitting the business became phenomenal. I will not go into the drop out rates here but they are well documented on forums and review centers on the internet. Almost everyone in the country will know somebody (even if they don't realize it) who was in Kleeneze and quit. This creates a very bad public opinion of the business opportunity.
> Next flaw. Very simple quick flaw. The UK population does not react well to business opportunities in general. Brits are naturally skeptical and cynical folk. Very difficult to present a catalogue business that generates incomes in excess of £10,000+ per month! True but very unbelievable to the majority. I would like to point out in Kleeneze`s defence that it is in no way Pyramid selling. Many people have published this accusation on many web sites and forums. This is simply untrue. The people who post these accusations are ignorant to what Pyramid Selling IS and MLM (Multi Level Marketing or Network Marketing) ISN`T. Without going into the details let me assure any readers that Kleeneze / MLM or Network Marketing for that matter is NOT Pyramid Selling. Pyramid Selling is illegal in the UK and most countries throughout the world and people should get their facts right before publishing posts on the internet. I was involved with the company for 7 years and I did not or do not break the law.
> Products. Some of the Kleeneze products (in my opinion) were not of high quality. Some were overpriced. Kleeneze used to sell an "All In One Body Stocking" for £9.99. The same product could be purchased in a Glasgow cash `n` carry for 39p! The exact same product from the exact same foreign manufacturer. Not good for moral! In order to experience another growth phase Kleeneze would need to expand into other European countries. I did not think that the culture of some of these countries would tolerate high priced often substandard products. There were many many other products that were simply embarrassing to sell. The "felt protector kit" for example was intended to protect polished surfaces from being scratched by ornaments. I can remember how much this product was but it was at least £5. What did you get for your money? A few round pieces of felt about the size of a one pence piece. I used to cringe when one of our customers would order one. One Christmas we got an "exciting" new product to sell - a musical Santa and Frosty the Snowman. Santa and Frosty were two Christmas dolls that would sing in unison. Cute product for Christmas. We were told at one of the Kleeneze national conferences that Kleeneze were the exclusive distributors of Santa and Frosty in the UK. Alas - two weeks later an identical product pops up in Argos at half the price! After Christmas we got told off by the Director for not selling enough! Some distributors I know were buying Santa and Frosty at Argos and passing them onto the customer. Even at our discounted price - Argos was still significantly cheaper. Another dreadful product was the Kleeneze bath cleaner. One of our customers cleaned her bath with it and it seriously stained her bath. Kleeneze had to be threatened with court action (by her) before they finally paid for a new bath almost a year later. Now don't get me wrong there were good, innovative products too. The defrost tray for example would defrost mean with no electrical power, an ingenious idea (I still don't know how it worked) but there were (in my opinion) extremely overpriced. There were other strategies to squeeze more profit from the catalogue at customer's expense. Many of the cleaning products were sold with the trigger spray sold separately. This meant that many customers would receive their cleaner in a bottle with no way of spraying it on their work surface. Often the trigger that attached to the top of the bottle was nearly as expensive as the bottle itself!.
> Many European countries do not allow unsolicited mail through a residential letterbox. As this is Kleeneze`s main method of selling to the public, European expansion looked grim. There was also talk back in the late 90s of a change in law in this country making unsolicited catalogues illegal.
> Politics. The politics I experienced in the Kleeneze business were extraordinary. I held open recruitment seminars at my meetings in Glasgow. This is the way I thought it should be. However, other groups did not follow suit. I was training distributors up here in Glasgow who were not in my business. However, my distributors down in London (for example) could not attend the training and recruitment seminars down there. As it turned out I was training a certain persons distributors in Glasgow, however, the favour was not being reciprocated for my distributors in London. Distributors high up the marketing plan distribute verbal propaganda to convince the distributors in their organization that their group was the "best". This inevitably led to intense rivalry and even hatred between certain Kleeneze groups. The company also seemed to back up this practice by awarding these distributors with holidays, cups and sports cars. On numerous occasions I had distributors in my organization poached into rival Kleeneze businesses with lies and propaganda. Some of my Gold distributors (I had 7 in total at various levels) were actively poached away from my downline while they attended the company achievement holidays! They would suddenly disappear from my downline only to appear in another line of sponsorship. I reported this activity to the company who ignored it. More politics. Read on. I produced tens of thousands of opportunity brochures and manuals for my downline distributors. As a gesture of good will and hoping to put an end to the rivalry between different Kleeneze lines of sponsorship, I made these sales and recruitment aids available to EVERY Kleeneze distributor in the country. I was actually threatened from high up distributors from other lines of sponsorship not to distribute this material or there would be consequences! All because their photograph did not appear on the front cover! This was the "nail in the coffin" for me and I made a concious decision to quit dispite my sizeable income.
> Groups achieve cult status. My uplines actively discouraged me and members of my business from associating with people who decided to leave. Even friends and family! Propaganda was spread. People who left the Kleeneze business were "negative" or "pond life" apparently. When I eventually left all of my friends in my Kleeneze business were actively discouraged from talking to me! Ever again! This includes family as well as my friends! Rumors were spread about me, I was misquoted and my name blackened so as to discourage people from associating with me. Disgusting attitude. I left the business with 7 active downline Gold Distributors and a healthy PSG. I was regularly earning £3000 per month. I left out of principle. I do not think highly of the principles of some of my upline!
> Rising PSG (PERSONAL SALES GROUP). IF YOU ARE AN ACTIVE DISTRIBUTOR YOU MUST READ THIS. Your sponsor (upline) may tell you that you will get royalties from recruiting agents into your business. Not necessarily so. If a distributor gets to a level where he breaks away and becomes a Gold Distributor you are not automatically entitled to a Royalty Bonus. Oh no! You must retain what is called a PSG or Personal Sales Group. This figure is several thousand ponds per month. If you do not sustain your personal sales group - guess what - no royalty cheque, no wages! Doesn't stop there. Even if you do maintain your PSG (something that is becoming progressively more difficult year after year - see attrition rate point above) you will not be paid on your second level of Gold Distributors unless you have created another Gold Distributor group personal to you. It gets complicated but suffice to say that you have to jump through some very big hoops just to entitle you to your royalties! Look at the marketing plan in more detail. From my experience your uplines either don't know these facts or don't want you to know! Why not?! If you miss these royalty bonuses the company still pay out - TO YOUR UPLINE! Even at lower levels you are not paid on your agent's turnover - you are paid on the difference of the agent turnover and yours. If you are at the same level as your downline distributor (below gold distributor level) you are paid nothing (although your upline may qualify to receive this payment). Your upline will inherit your cheque. Now I'm not saying this is a bad marketing plan. All I'm saying is that many of your uplines don't want you to know the details of the marketing plan. I encourage distributors to read the company literature on the marketing plan.
> Cut out the middleman - the distributor. From my studies of MLM culture in America there is one thing you definitely want to avoid. You want to avoid the company cutting out the middleman or in other words - YOU! You are the middleman. It astounds me that people try to recruit in other MLM businesses by advertising that the company will deal directly with the customer for you! This is not an advantage! If the MLM company deal with the customer for you then when they get enough customers they don't need you any more. No royalty cheques! This has happened almost without exception in the USA. Why should the company pay our millions per month if they don't need you. You do not want the MLM company getting your customer details. This is one good thing about Kleeneze - the catalogue distributor knows his own customers - the company doesn't. However, it is of considerable concern when an MLM company attempts to launch a shopping channel to effectively vend their wares directly to the public and cutting out the catalogue distributor and upline.
> You may find it interesting that there are other sources of income generated by many top distributors. Not happy with their royalty bonuses (or lack thereof) some distributors generate additional income from other sources. These include voicemail, training seminars, opportunity meetings, sales aids, books, tapes, motivational materials etc etc etc. Not all uplines do this. However, a lot do. I would regularly have 150 people attending the Dean Park hotel in Renfrew. Each paid £3 per head. Thats £450 per week. Thats £1800 per month. What did I do with the money? I reinvested it into better opportunity meetings, free teas, coffees and biscuits for everyone, subsidized sales aids etc. I never kept a penny for myself. That is the ethical way to do it. Not all leaders in the business follow suit. Next time you are at a meeting count how many people there are in the room and multiply it by the fee at the door. A lot of people are making a lot of money from this. A structure that pays profit directly proportional to simply the amount of people is PYRAMID SELLING (which is off course illegal).
> Finally I have examples of upline paying key people in their business to quit. I will not go into this in detail. However scenarios arise (such as being unable to maintain PSG see above) where it is profitable for people in your organization or downline to quit. Some uplines give people a shove out their business by paying them a lump sum to quit. Not exactly what MLM is meant to be all about.
In defense of the company they will not be aware of many of these practices.
Anyway, I have gone on for long enough. I would consider myself a guru of MLM. I have studied the business concepts in great detail. I am not saying that you cannot make money from a business such as this. I know many people who do. I could have still been picking up a cheque every month but I could not ethically continue with the business. I have introduced people (after the growth phase) into the business who have spent their life savings on advertising for zero return. I could not continue to paint a "rosy" picture of MLM in the UK. It is not surprising that the company has had financial difficulties and has been purchased by another party. I think it has a shaky future. I am not being "big headed" but everything that I predicted would come to pass has come to pass for the reasons explained. I even got the "saturation" point exact. I am onto bigger and better things and I urge people to consider what I have revealed in this post.
OK, so there are bad things in doing MLM with Kleeneze but you don't have to do it like that if you don't want to. He has not offered both sides of the story so to speak.
executivedistributor 03.12.2006 20:11
I`m the author. Sorry about the posts on two sections. It was suggested to me that my review shouldnt be in the catalogue section but the "buyer beware" section. Thats why I copied it into the buyer beware section. I also elaborated on the products as requested by another author. Sorry, I`m new to Ciao, didnt mean to upset anyone. I have contacted Ciao so that this review stays on only one section. Sorry again.
sweetdaisy 03.12.2006 16:30
Useful review, however i had already read this under another section