Qnanza Review: Coupons + member driven advertising
Over the last few years the online coupon marketplace has grown significantly. Starting off with sites that just published the same coupons you’d find on the back of your receipts or in those booklets dropped in your mailbox, the niche has grown so much that it’s now a fully fledged industry of its own.
With Groupon worth billions of dollars and the likes of Facebook and Google entering the market with their various coupon offerings, it’s long overdue that someone came up with the idea to pair it with a MLM offering.
Today we’re going to look at one business opportunity that does just that, Qnanza.
The Qnanza business model
Whilst Groupon, Facebook Deals and Google Offers provide users with a no cost option to take advantage of local coupons in their area, Qnanza has taken a different approach.
After joining Qnanza, members are then invited to ‘buy’ the offers sent to them, but only if they wish to take advantage of the deal.
Let’s say for example I login to Qnanza and click on today’s deal. If I like what I see I have to purchase the deal at which point a copy is made available and I have the option of sending the deal to myself via email and/or SMS.
Each deal has a unique verifier number and once used, the deal is void and cannot be used again.
Qnanza claim that by limiting the number of uses this has less of an impact on businesses offering the deals, but I believe the restriction is more likely due to Qnanza just having started out and their relatively small membership base.
That and it could be due to the relationship between Qnanza and the business promoting themselves on it. With Qnanza taking payment from consumers it’s unclear what the exact nature of this relationship is.
Note that should a member not be able to redeem a deal from a business however, Qnanza themselves are offering a refund indicating some liability on their part.
The Qnanza product line
Qnanza’s product is advertising. Whereas the established coupon players have their own sales and marketing teams to go out there and procure businesses to offer coupon through their networks, Qnanza are going to rely on their members to bring local businesses on board.
As a Qnanza sales representative or Campaign Director, you are able to market the coupon side of Qnanza directly to businesses. In doing so you’re not only rewarded with an upfront sales commission, but also with a residual ongoing commission so long as that business runs a Qnanza advertising campaign.
The Qnanza compensation plan features what is known as Business Volume. These are fixed point amounts that Qnanza members are rewarded for various business activities, such as signing up new businesses wishing to advertise and bringing new members to Qnanza.
The business volume (BV) values for Qnanza membership and membership renewal are;
- Campaign Director Package – 200 BV
- New advertiser client enrolment – 120BV
- Monthly advertiser client campaign renewal – 120 BV
- Coupon Purchases – 0.12 x coupon voucher amount (this is obviously a variable figure depending on the voucher amount being purchased.
The Qnanza membership ranks
Qnanza offers it’s members five different membership ranks depending on the amount of money they bring into the company during a rolling 12 week period (with the exception of Campaign Director, which has no time requirement).
Because of the rolling nature of the twelve week period, members are able to be downgraded in rank as well as upgraded. Money coming into Qnanza needs to be maintained if members which to maintain their respective rank.
The BV requirements for Qnanza’s membership ranks are as follows;
- Associate Campaign Director – No minimum BV requirement.
- Campaign Director – $1800 in sales generated by your directly enrolled team.
- Area Director – $6000 in sales generated by your directly enrolled team or $3000 in personal sales.
- Regional Director – $30,000 in sales generated by your directly enrolled team or $15,000 in personal sales.
- Senior Director – $60,000 in sales generated by your directly enrolled team or $30,000 in personal sales.
- National Director – $120,000 in sales generated by your directly enrolled team.
- International Marketing Director – $240,000 in sales generated by your directly enrolled team.
Note: Area Director does not appear in the compensation plan, nor does it seem to be associated or tied into any commissions available to Qnanza members. At this stage I’m not entirely sure why, other than Qnanza members being able to call themselves an ‘Area Director’, it’s on the rank list.
The Qnanza compensation plan
There are five commissions offered via the Qnanza compensation plan to its members, they are as follows;
1. Personal Sales Bonus
As a Qnanza Campaign Director, you will receive a once off payment of $100 everytime you sign up a new business to advertise a coupon deal on the Qnanza network.
2. Renewal Sales Bonus
For each month a business you bring onboard to advertise on the Qnanza network, you will personally be paid a monthly commission of $50.
3. Binary Team Commissions
Qnanza utilised a binary compensation plan which means that underneath you, your organisation branches off into two arms. From these two arms, two arms follow on from underneath them and so on and so forth.
After some time, a growing binary organisation will start to look something like this;
Qnanza will pay you $25* for every 200BV pair you accumulate on either side of your binary organisation. Each pair is referred to as a cycle and BV is earned as outline above in the ‘Business Volume’ section of this article.
These cycles are tallied up weekly and the binary commission is then paid out accordingly.
Additionally Qnanza also offer what is called a Binary Team Override. This means that for each person you’ve directly sponsored, you gain matching residual 120 BV each month, as long as that business chooses to use the Qnanza advertising network. This binary team override BV counts towards your matching pairs.
The binary commission payout is capped at $35,000 for any given week per Qnanza Campaign Director.
*Qnanza state that they aim to pay out roughly $25 per cycle but they don’t guarantee it. Each week a proportion of the company wide membership and signup fees are put aside to fund the binary commissions. Thus, depending on the amount of cycles being claimed by members in any given week the $25 per cycle payout might slightly vary.
4. Matching Bonus
The fourth component of the Qnanza compensation plan is a matching bonus that pays out a percentage of the binary commissions earnt by Qnanza members you personally enrol, and those they personally enrol.
The payout levels are dependent on your Qnanza membership rank and pay out as follows;
- Regional Director – Regional Director pays out 20% on your first generation’s (those you directly enrol) binary commission payouts.
- Senior Director – Senior Director pays out 20% on your first generation and 10% on your second (those people who are enrolled by those you directly enrol).
- National Director – National Director pays out 20% on your first generation and 10% on your second and third generation.
- International Marketing Director – International Marketing Director pays out 20% on your first generation, 10% on your second and third generations and 5% on your fourth and fifth generations.
5. Enrollment Team Account Bonuses
In order to reward members that bring in advertisers, Qnanza have set up various cash and incentive bonuses. These are as follows;
- 5,000 advertiser accounts = $25,000 cash bonus
- 10,000 advertiser accounts = $100,000 cash bonus + a car lease
- 20,000 advertiser accounts = $250,000 cash bonus + an exotic car lease
- 40,000 advertiser accounts = $1,000,000 cash bonus + 25 hours flying time in a private jet
Given the advertiser numbers involved I’d be inclined to say that the advertiser numbers are counted across your team rather than personal advertiser signups, but the material I’ve looked at is unclear.
Naturally though we can assume that the numbers only include currently active accounts.
Those wishing to join Qnanza have two options;
Campaign Director – Joining Qnanza as a Campaign Director costs $171.95 ($150 joining fee + 1 month $21.95 subscription) and entitles members to all components of the compensation plan.
Sales Representative – Joining Qnanza as a Sales Representative costs only $21.95 a month but limits you to only earning commissions from enrolling businesses to advertise on the Qnanza network (compensation plan commissions 1 and 2 as per above).
The concept of having your members outsource businesses is something I haven’t personally heard of and will definitely be need to be tested in the marketplace to gauge its effectiveness.
As someone looking to participate in the Qnanza business opportunity, know that primarily you’re not going to hvae success without being able to convince businesses to participate in the Qnanza program.
The residual compensation plan is tied into BV and the only source of ongoing BV is from advertising client’s renewing every month.
If you are aren’t comfortable or know that you’re no good at selling than the Qnanza buisiness opportunity isn’t for you.
You could try game the system by just relying on the BV generated by signing people up as Campaign Directors and hoping a few of them are succesfull inturn at signing up businesses themselves, but this is a gamble and initially you’re setting yourself up for a lot of work as you’ll have no regular source of monthly income.
From an advertiser standpoint, I also see some drawbacks using the Qnanza system.
As an advertiser, especially a local smaller business, whilst the initial flood of customers coming through the door might be useful, I can’t help but question the motive of wanting to continually provide month to month discounts to Qnanza members.
A supermarket has weekly specials because they have tens of thousands of products, as a local business this is going to be unlikely and I’m not really seeing the value of committing financially month to month to Qnanza to offer a regular discount to its members.
I’d have thought the last thing you’d want to do as a local business is set a precedent and expectation of offering your products at a perpetual discounted price.
Worst still, being local you also run the risk of word of mouth getting around and people rocking up demanding the discounted price, whether they bought it through Qnanza or not.
Of course as a business advertising on Qnanza you do have control over the amount of coupons being offered by Qnanza to its members and therefore you’re total spend. This seems to be like a coupon version of AdWords where businesses will be able to set a maximum campaign spend and let Qnanza do the rest.
At the end of the day however, as opposed to Adwords where only the advertising spend is lost per sale, with coupons the business is also looking at absorbing the discount offered via the coupon.
This might work for a short term duration and to get your name out there, but as I mentioned earlier I don’t really see the value of a long term campaign via Qnanza. At least not in a business sense.
As a Qnanza Campaign Director or Sales Representative you need to take this into consideration. Not only does the health of the advertiser inventory directly have an impact on your commissions through renewal BV, but it also dictates the success of the coupon side of Qnanza as well.
No deals and Qnanza membership will tank, taking along with it the major selling point you’ve got in your attempts to bring new advertisers on board.
Due to the nature of coupons, apart from the big multinationals (who Qnanza don’t seem to be targeting), you’re looking at a multitude of local offerings. This in turn severly limits the potential value each member obtains from being a member of Qnanza.
Still, all coupon type sites have to start somewhere and if the Qnanza model proves to be succesful I imagine initial success in areas of a large concentration will eventually trickle out to more regional areas.
As I mentioned earlier, relying on your members to bring on advertisers rather than a team of professional marketers is definitely something different in the coupon niche. This is one business where quality in your field of members is definitely going to make or break the company.
I guess we’ll have to wait and see if it pays off for Qnanza and its members.
The deal seem to be structured to attract MLMers (who’s “taught” that monthly subscription = long term profit, and one-time payment = pyramid scheme). However, it looks like a buying club instead of a MLM, esp. as you pointed out, there is no real product.
The review above is clearly wrong in at least one major point. The $50 payout for renewal is only for ad sales renewal.
When a campaign director or qualified associates sells a coupon ad to an advertiser they get paid $100. The advertiser must make a 3 month commitment. For each month after the first month the advertiser renews the affiliate person who sold the ad get $50. So when an affiliate sells and ad they get 100 the first month and at least $50 month 2 and 3. If the advertiser continues their coupon campaign in month 4 and beyond each month the affiliate will get that $50 renewal fee.
The binary on monthly renew is a point system and all your direct sign ups will pay you 120 points for each renewal. When you have 200 points on your left and 200 points on your right that is a cycle and you are paid $25 for each cycle.
Please correct your artical it is wrong and you can make money selling advertising. If you would like to discuss this in person feel free to email me your phone contact information and I will call you to discuss.
Mark E. Morgan.
Seems Qnanza’s got some work to do explaining their compensation plan properly. If I could get confused anyone can.
I’m revising this article and I’ll update this message when done. Cheers for the heads up.
After doing some further research I’ve revised the article and updated it accordingly.
Please let me know if there’s anything I’ve misinterpreted. As an aside, if you’re in contact with the Qnanza team you might want to pass along that compensation plan material they’re currently distributing is a bit misleading.
Most people I imagine are going to read it the way I originally did unless Qnanza explicitly clarify the terms used.
Disclaimer : I am a member of AdzZoo and Qnanza.
I have never met a MLM compensation plan that wasn’t complicated 🙂
AdzZoo is not Network Marketing and Qnanza is a bit of a hybrid.
First, both AdzZoo and Qnanza sell products to true third parties. So yes the business is about selling.
However you can also recruit members, ie build your own sales team where you get overrides. Just like a normal busines that sell products or services through a sales department.
Qnanza is a bit of a hydrid in that they have direct upfront commissions but they also have a binary plan.
But in the end you are selling products to a true third party and you have the option of building your own team.
That is exactly what attracted me to AdzZoo and Qnanza.
Unfortunately many MLM businesses have realised that they need to go to great lengths to mask the true nature of their business (mass recruitment). The end result has been ever complicated compensation plans most people (myself at times included) can’t get their heads around.
I’m not neccessarily referring to Qnanza here as they’re plan wasn’t that complicated, rather I felt the way it is explained needed work.
Agreed. The real test as far as I can see with Qnanza is whether or not a field of MLM marketers can compete with Google, Groupon and Facebook’s ‘big guns’.
And for a truly cynical view at Qnanza… I present… Linkvaark
He nailed it on the head when it wrote: “Yes, folks, all this [luxury car, mansion, high life] can be yours just for convincing struggling small businesses to slit their throats putting out loss leaders to bring in a bunch of cheapskates.”
Heh, that’s ridiculous. Seriously, “convincing struggling small businesses to slit their throats” If they are a struggling business then obviously they need to make some changes.
Businesses can profit from Qnanza only if they get off their butts and become salesman and stop being order takers. If I had a business and Qnanza or Groupon flooded me with customers, I’d try to up sale a product.
If I had a resturant and received 40 customers and up sold 20 drinks, I’m now making money and with customer service getting repeat business. The struggling business person already has bad business and advertising practices.
And what? You’ve never used a coupon before? Cheapskate? Listen, businesses already put out big discounts anyways. Might as well put it into a system that would expose them more to consumers out there.
Coupons are always limited in quantity or value so the maximum loss of such a campaign is limited. Coupons require the original coupons (no copies), limited to first X customers, require additional purchase, and so on and so forth.
Groupon and Qnanza are the exact OPPOSITE: the more successful the coupon, the MORE the business will lose. In other words, you are guaranteed to lose AT LEAST X dollars, and possibly a lot more.
Let’s just use a scenario to illustrate: traditional coupon vs. Groupon.
Traditional coupon: business hands out 1000 coupons to customers, buy one get one free. Assume each item is $10, maximum possible loss is $10000 ($10 x 1000)
Groupon coupon: business offers 50% discount to Groupon to get at least 500 customers. Instead, 1500 showed up. Their loss is now $15000, and technically there is NO UPPER LIMIT TO THEIR LOSS.
FACT: Study shows that 1/3 of businesses who used Groupon found it to be unprofitable.
Study also found that people who use Groupon never come back, tips lousy, and avoids upsell.
So, Darnell Keith, it’s not as ridiculous as you think.
Linkvaark Strikes again… roasts “The Customer Advantage”, a very similar outfit to QNanza (and Groupon) but far less legitimate. Apparently their corporate address is a rent-a-mailbox.
So businesses need to change how they operate to accomodate Qnanza et al, just so that you can make a commission?
Isn’t this a number one pet peeve of the coupon crowd? Rocking up somewhere to collect a freebie or discounted item only to be try and sold something else?
Well, that’s the coupon site marketing theory at least. The reality I’d imagine is that most people are sitting at home waiting for tommorow’s great deal and have already forgotten about whatever yesterday’s coupon deal was.
Groupon’s “50% off” philosophy means you will bring in a lot of customers, which just means you will lose AT LEAST that much, usually a lot more.
Take the offer here in San Francisco today, July 2, 2011.
$20 worth of stuff for $10, minimum buy-in is 50.
If 50 people bought it, maximum loss is $500.
Last I checked, buy-in is already over 200. So loss is already $2000 and climbing rapidly.
And look at the fine print: 1 coupon per person per day per table. THAT at least would limit the losses somewhat, assuming they are not besieged by a lot of lone diners.
Groupon’s model turns the idea of coupons on its head… And that’s NOT necessarily a good thing for business. Sure you’ll get a lot of names and a lot of ONE-TIME visitors. How to convert those one-timers to long-term customers is still up to the business.
Groupon and clones creates buzz, not profit or steady customers. A struggling business may or may not need buzz. Claiming that Groupon-esque deals are good for business demonstrates fundamental misunderstanding of the model.
Just a thought here…if Groupon and other internet coupon businesses are so detrimental, why are they so successful and why are there so many businesses that want to be on a coupon?
Just looking at the facts Jack.
Dan in Van
Groupon is so succesful due to the irresistible size of it’s memberbase and what that potentially means for businesses.
For the large players the loss in revenue by providing loss leading coupons might be absorable, but for smaller companies it’s a potential revenue disaster.
With just 22% of customers coming back after using their coupon (remember, this is an average), the impact on local businesses can be devastating.
Why the focus on local smaller businesses? As an independent MLM distributor trying to bring businesses to Qnanza or some other coupon MLM opportunity, do you really think you’re going to be able to entice the large coproarations able to absorb the lossses?
By all means reach for the stars but let’s be realistic. Qnanza and the like are trying to increase coupon marketshare by targeting smaller mum and dad businesses.
Want to see how that potentially pans out? Have a read of Groupon in retrospect.
Personally I think hedging the success of a MLM coupon company against Groupon (who have the manpower to approach larger corporations that an independent MLM member never will) is about as ridiculous as all these MLM social networks declaring their inevitable future success using Facebook as an example.
Because they are basically trading “loss in revenue” for “advertising budget”. It looks better on their cashflow.
Think of it this way: instead of money coming in, then going back out to advertising, they are just spending money that never came in (discounted).
Is it a “win-win”? Not all the time. It depends on how much loss in revenue, vs. how much buzz the campaign generated. As Groupon studies shown, (you can find these on Internet), restaurants got the worst… Most found Groupon to be not profitable deal, because profit is already thin, usually no more than 25% (maybe 33% in specialty or high-end ones) 50% discount and you’re running a loss.
It’s the super-high-margin business like spa and such that loves groupon. They’re a niche business, can “book” people to spread out loss of revenue, and the buzz generated is more suitable for upsell.
You are all spending so much time talking about Groupon being horrible to the business owner, that you completely moved away from the root of this message.
Qnanza took Groupons business model and made it BETTER for the business owner. By limiting the amount of coupons that are eligible to be sold, they are eliminating the drawback of Groupon that businesses are flooded with new customers they can’t handle.
Get with the shift in the market and expand your mind. Our country’s economy is plummeting and we need to adapt to changes and the way we do business.
Additionally, to touch upon the subject of “MLM” compensation plans look at our unemployment rate! Large corporations are not hiring and are continaully laying off their employees. The “MLM” business model gives these people opportunity that they are not able to find in the ever growing pool of qualified salespeople with no jobs.
What about the attrociously low repeat customer problem? I’d say that’s a bigger problem then over extending yourself with free coupons. If these business were getting the repeat business they wanted I don’t think they’d mind too much being swamped with coupon customers.
Qnanza still has this inherent problem to deal with. Instead of going back, they’re sitting there at the Qnanza website already thinking about tommorow’s deal.