Javita August incentive focus on recruitment drive
When I first reviewed the Javita MLM business opportunity, I reflected that despite having a compensation plan that incorporated product sales on a retail level (business volume), the door was wide open for members to simply place new recruits on auto-ship and hope that one of them eventually made it.
In doing so the recruiting member can rely on Javita’s FastStart bonus and the residual income provided from new member’s autoship requirements.
This naturally isn’t a longterm strategy for success with Javita, but is possible (there’s no compensation plan disincentive to not do it) regardless. That said, it was entirely up to Javita on how they were going to market themselves.
They could either play the recruitment numbers game or focus on establishing themselves as a long-term MLM market player with a solid product that sells itself.
Shortly after reviewing Javita I was then disappointed to see that Javita’s marketing arm, Javanomics was marketing Javita on the premise of earning ‘$16,000 per month to your income by finding one person per month by sharing coffee?‘
The basic concept being marketed was that if you enrolled one person a month into Javita, and in turn got them to enroll one person a month (exponentially), at the end of 12 months you’d be making over $16,000 alone on autoship commission payouts.
The downside?
Through your efforts you’d have recruited (directly and indirectly) 4096 members to Javita who would all be out there over the next twelve months trying to replicate your results.
It’s pretty much a no brainer to see how that’s unsustainable over the long term (not to mention completely removes any significance of Javita’s product line from the business model of the company).
At the time, I concluded that
whenever an autoship component is involved it’s always a fine line between relying on it and utilising it to derive an income.
In the case of Javanomics latest marketing material, clearly they and by proxy Javita have no problems with their members solely relying on recruitment to build their businesses.
Launched back in June 2011, this was the first marketing effort from Javanomics (Javita’s marketing and training arm) and I hoped at the time wasn’t a reflection of the direction Javita’s marketing and training incentives were going to take.
If the latest marketing effort by Javanomics is any indication though, it looks like recruitment is going to take centrestage over a product driven marketing approach.
For the month of August, through Javanomics, Javita has launched two new incentives to encourage recruitment amongst their existing memberbase.
The first incentive comes in the form of a $2000 cash incentive each week, awarded to the top 3 enrollers in the company but based on business volume.
Given that most new members probably aren’t bringing a clientbase with them, this translates into the business volume generated by their autoship. So in other words, whoever recruits the most people each week in August.
The second recruitment incentive is the giveaway of a new Ipod Nano each week to Javita members who recruits new members. Entries are limited to one and Javita members can gain an entry by recruiting just one member.
Forget business volume, this second incentive just flat out rewards members for recruiting.
With both of Javita’s August incentives strongly tied into the recruitment of others, it’s disappointing to see Javita move away from marketing their product and instead relying on marketing the business opportunity.
With a consumable like coffee, one would think it’d be easy to market the product. If the first two promotions by the company are anything to go by though, apparently not.
Autoship is a two-edged sword.
On one hand, without monthly autoship you have no persistent sales and thus stream of constant revenue. You don’t really want to go back to the guy and resell him coffee every month if you can help it.
On the other hand, autoship, as you pointed out, basically ascertained “recruiting = sales”, and that is a serious problem when it comes to legality and morality.
While I see exactly where you’re coming from, a company that’s now just about a month out of prelaunch not only has to move product, but has fixed costs to spread out.
Recruiting and autoship is probably a much faster way than building retail sales to ship as much product as possible.
@Jon
Most definitely but let’s be realistic here. Javita announced their prelaunch five months ago and to their credit the ‘reserve your cup’ campaign went quite viral and was a success (at least during prelaunch).
Where did all those people go?
Shouldn’t they be trying to get their product out there rather than relying on recruitment at this stage? Otherwise Javita run the very real risk of creating a recruitment driven culture amongst their distributor base. If new members are signed onto the opportunity rather than off a genuinine interest and love of the product, how do you think they themselves are going to market the product.
Recruitment focus during prelaunch is fine but at some point you’ve got to rely on what you’re actually selling to make it in the long term in MLM.
If they don’t have enough capital for it to burn through 6-12 months’s operating losses, it should not be in business. No new business is immediately profitable (except pyramid schemes).
The problem with autoship, as pointed out earlier, is basically they are selling to members, not outside customers. Sales figures would then be bogus. Assuming they follow Amway rules with proper product return etiquette you can’t trust any of the sales figures UNLESS they report actual sales (or consumption) by individual members/associates/whatever, and I doubt they do that.
With the age of Internet and smartphones, orders can be placed almost anywhere, and autoship is NOT necessary to maintain stock level. Thus, autoship appears to be a way to artificially prop up sales numbers, and basically teaches all members “recruiting = sales”.