Business Life

Up to the Challenge

Frank VanderSlootFor Frank, the road towards financial success started off rough. He milked cows, worked as a ranch hand, sold beef jerky, served as the resident janitor in a laundromat, loaded freight, fought forest fires, and worked on the railroad. Don’t laugh–Frank’s willingness to work hard got him through college debt-free. Many turn to student loans rather than a job, but not Frank VanderSloot.

After earning his business degree, that same plow-ahead determination gained him a job in the corporate world, where he soon achieved executive status. In the end, he was drawing more pay than most people will ever earn and enjoying the power and prestige that comes with helping direct the efforts of a Fortune 500 company. A lot of folks would have settled for that–but not Frank. He left a telecommunications mainstay, Cox Enterprises, for the uncertain world of entrepreneurship.

And once Melaleuca was firmly established, to the point of being recognized in the Inc. 500 Hall of Fame, many folks would have chosen early retirement and a beach house in Florida… but not Frank. Rather, he kept on working, along the way building one of the most successful cattle ranching operations in the country, the top group of radio stations in East Idaho, The Fort Ranch, and more.

(A little-known fact about Frank VanderSloot is that he once purchased a cheese factory–not because he wanted to become a cheesemaker, though, but because the operation was going under and threatened to take more than a few local dairy ranchers with it. Frank bought the business to protect the dairymen, not to add to his own bottom line.)

When he got the call from an old friend, wanting him to come home to Idaho and lead a faltering start-up company, Frank says he mainly accepted the offer because his wife was homesick and the job came with the potential of a generous bonus plan–yet, he had noticed something along the way, something that had been evident from his childhood: Those who work for someone else will never be able to call their own shots. Their wages, their actions, and their positions will forever be determined by someone else.

Building the business made to last a lifetime…

It wasn’t all tea and crumpets in Idaho. The company he had come to lead was set up on a multi-level marketing business model, a concept that didn’t set well with Frank. He saw the potential for people to get hurt in that business, so he shut it down, bought back the kits from anyone who didn’t want them, and went to work to design the framework of a company that would work. Frank had a vision of creating something where nobody would get hurt, a business fueled by real people who were buying real products because they really wanted to. Rather than trying to see how much he could get out of his customers, Frank decided to try a novel approach–to see how much he could give them. As a result, the concept of Consumer Direct Marketing took form, and the company he founded next, Melaleuca, has shown a revenue increase every year since the doors opened in 1985. As I write this, at the end of 2010, Melaleuca is approaching annual sales of over one billion dollars.

Here is how Frank wrote, in the August, 2007 issue of Leadership in Action magazine, about the word-of-mouth marketing concept he championed:

When we first started out, we had no idea how powerful our word-of-mouth business model would be. We knew we were up against the mass marketers, and that the mass market is an extremely competitive and expensive playing field.

For decades before we started Melaleuca, companies like Procter & Gamble successfully marketed products by showing television commercials during television shows. In fact, the “soap” opera was so named because the shows were originally used to market soap to the housewives who commonly watched them. For the most part, America bought into it. We became familiar with brand names like Tide®, Crest®, and Gilette® through mass media advertisements on national TV. Commercials became increasingly expensive as advertisers fought for the best TV spots, and the consumer paid for the expense of these advertisements—which really don’t benefit the consumer at all—through rising product costs.

In the middle of all of this, we started Melaleuca, not knowing how it would fare against the industry giants who ruled the airwaves. Instead of competing with them on their playing field, we decided to market our products differently by sharing our profits with our customers in exchange for word-of-mouth advertising. We trusted in the superiority of our products and had faith that they would generate enough excitement for people to talk about. Instead of trying to get the most out of our customers in exchange for the least we could give, we devoted our profits to improving and researching new higher quality products that benefit our customers. We simply formulated exceptional products we knew consumers would love to share with others, and we offered an unequaled financial opportunity to those who chose to do so.

Then a very fortunate thing happened: technology changed everything. With the invention of the remote control, commercials started losing their effectiveness. Instead of watching every commercial, the average television viewer started changing the channel during the commercial. Advertisements are rapidly losing their stranglehold on North America’s consumers. After the remote control came TiVo® and the DVR, and now the average viewer doesn’t even need to change the channel—the commercials are left completely out of the picture with the touch of a button!

How are the industry giants reacting? What have they done to close their grips on the market? The same thing they’ve always done: they’ve poured more of their budgets into television marketing, even though no one’s watching! It’s not uncommon for companies to spend 75 percent or more of their budget on advertising. Why? Because they don’t know what else to do! They’re scrambling because they know huge losses are on the horizon unless they find a new way to get the word out about their products.

Clearly, word of mouth is the most powerful form of advertising, and some of the larger companies are starting to realize that. Companies like Procter & Gamble are experimenting with their own “word-of-mouth” programs, offering incentives like free product in exchange for customers talking about their products. They’ve started product clubs, basically brand fan clubs, targeting the powerful demographics of adult women and teenagers. But none of that is working. They just find themselves giving away a lot of free products. There are lots of “takers” but very few “talkers.”

That’s because the major companies will never be willing to do what they should do: share their profits with those customers. The shareholders would never allow it!

Melaleuca is in the ideal position: it’s the only opportunity I know that relies on real consumers telling other consumers about real products, and then rewards them by sharing the profits. It’s a far cry from the MLMs who sell large, high-priced inventories to business recruits who never really end up using much of the product. We already have more customers who are strictly customers than any other direct-selling company.

Our methodology is outperforming the big guys, and it will take a long time for them to figure it out! Even if they do, I don’t think any company would be brave enough or wise enough to share their profits with their customers.

In fact, their shareholders would never allow it! Your word-of-mouth sharing of our exciting story is the most powerful kind of advertising we could ever have. It’s much more effective than national television yet allows us to spend money on quality products rather than advertising…

 

Business Ventures

 

Melaleuca:
Melaleuca LogoFrank’s desire to find a way for common folk to find uncommon success, “The Wellness Company”, is the flagship of his enterprises. Frank is the Chief Executive Officer of Melaleuca and takes an active role in its activities. Under Frank’s guidance, the company has five times been listed on the Inc. 500 list of the fastest growing companies in America and is approaching one billion dollars in annual sales. Not only does the company have manufacturing and distributing facilities in Idaho and Tennessee, but is experiencing tremendous growth abroad. For more information about Melaleuca, see the Corporate Website and the Melaleuca Blog.

 

Tea Trees and Cattle Ranches

Melaleuca may be the flagship of Frank VanderSloot’s endeavors, but his strong desire to make a difference, coupled with an unyielding dedication to family and community, have led him to launch other ventures as well…

 

Riverbend Ranch:
He carried a big chunk of the chores on the family home place, so he’s no stranger to working on the ranch. Nowadays, it’s one of the things he loves best.

The Riverbend Ranch properties are not only one of the top 20 commercial cattle operations in the United States, but are also among the top 20 purebred cattle operations in the country. Riverbend is the only ranch that can claim both of those distinctions.

Ranking as the fifth largest purebred cattle operation in the U.S.A., in 2010, Riverbend Ranch is committed to providing affordable access to the highest quality genetics in the cattle business… genetics that will profit every link in the chain, from ranch to the kitchen table.

The fourteen Riverbend Ranch outfits are located in Idaho, Utah, Montana, and Texas. Two annual sales, held at the Idaho Falls headquarters in March and October, provide about 700 Genetic Edge animals to breeders, both domestic and foreign.

For more information, see the Riverbend Ranch Website

 

Fort Ranch Quarter Horses
Located at Promontory, Utah, on the north shore of the Great Salt Lake, Fort Ranch is situated on some of the most rugged terrain in the West. The working horses and cutting stock reared there don’t get much laying around in the high grass time; Fort Ranch horses are brought up to be world-class athletes. That’s why Meradas Little Sue, one of the greatest cutting horses of all time, is a Fort Ranch broodmare.

The 2010 production sale at Fort Ranch saw about 80 foals, all from some of the finest genetics in the industry, enter the world of working ranches and cutting horse competitions. The Fort Ranch combination of exceptional bloodlines and high mountain pastures gives the horses a head start on physical strength and stamina.

For more information, go the Fort Ranch website.

 

 

Riverbend Communications:
With the largest audience pull in Eastern Idaho, the five stations broadcasting under the Riverbend Communications banner are market leaders. Formats range from Rock to Talk to Country. From talk radio’s Laura Ingraham to classical music or breaking news, the broadcast stations in the Riverbend Communications group server to keep Eastern Idaho informed, engaged, and connected. The main Riverside Communications Web Site links to each of the stations.

 

Videos pertaining to Frank’s business interests include:
Business Expanding
and an Introduction to Melaleuca.