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May 19, 2004
Deconstructing the Postma Memo
By QBlog in Amway
The "Postma Memo" (pdf) is a brief and rather dry Amway document examining the Bill Britt and Dexter Yager motivational businesses. It was written in 1983 by Ed Postma, formerly Amway's business conduct manager, and provides a glimpse into the hidden conflict between the Amway corporation and the rapidly growing "tool business."
Relationships are sacred
The first thing we learn from the memo is that relationships within the Britt/Yager systems are sacred.
...It is also customary for this line of sponsorship to consistently teach that the relationships in a line of sponsorship are sacred...
...So, while friendships are being developed, a dependency is also being created. It is this aspect of their methodology, that has allowed for charges of "mind control."
The "dependency" that Postma mentions ultimately suppresses individuality and creativity. The downline is taught that the upline should be the only source of information and guidance. Postma goes on to say that creativity in the Britt/Yager system provides a "chance of failure" and failure is not allowed if their business is to be credible.
Don't trust anyone... except your upline
Another characteristic of the Britt/Yager systems is the culture of mistrust and suspicion towards anyone outside of their specific Line of Sponsorship (LoS), including the Amway corporation itself. Only the upline organization is to be trusted. Postma describes a culture teaching that the Amway corporation is out of touch with the realities of the Amway business and as a result can't provide the type of support, information and advice needed to succeed as a Distributor. However, Postma clearly disagrees with such ideas and even suggests that the corporation could provide superior motivation to the Distributors.
It has been my judgment on observations, that they do not do a better meeting than we do, nor can they provide the same type of motivation as we do. However, in attempting to convince the corporation to stay out of the motivation business, it allows them to do two things: first, it further isolates the business, second, it allows them to operate a motivation business with little or no competition.
Motivation is where the big money is made
Postma makes it clear that the primary source of revenue for Britt/Yager Diamonds is the tool business and not the distribution of Amway products.
If there are any discussions of any length with the Diamonds utilizing this system, it becomes clear that although they realize that they are Amway distributors, they consider their personal business to be the motivation (tool) business. I think there is little question that is where the big money is made.
Postma then outlines five categories that constitute the motivation business.
- Tapes and Books - "At that level (Direct), the tool business subsidizes the Amway business"
- Rallies - "It is not uncommon for the profits on these functions to exceed $25,000 to $50,000 for a weekend or $250,000 for a Free Enterprise night."
- Accessories - "...accessories (jewelry, clothing, and automobiles) are made available to distributors so that they may appear successful. It is considered extremely important for Diamonds to show material success in the business."
- Counseling - "Counseling goes on continually with the upline also causing dependency."
- Moving Up - "It is important to demonstrate success as the system (not the Amway business) allows."
"This business will crumble under its own weight"
Obviously Postma miscalculated the resilience of the Britt/Yager motivation businesses. In his summary, Postma predicts that "...anything that is done by the corporation that will cause conflict or competition with this business could cause a major split. This business will crumble under its own weight..." He then lists three reasons that the motivation business will crumble:
- Rights of the Directs - "The biggest fear that Diamonds have in this system is that the Directs will take Rich's speeches seriously, become "little Napolean," and cut off their ability to move the motivation business downline..."
- Greed - "Ego could destroy the traditional system. The system has encouraged "sponsoring" up so much that in many cases, the downline leader is smarter, more ambitious, and more ego bound than the upline."
- The Tool business (motivation) is illegal - "Unlike the Koscot method of marketing, the MLM system moves a product to an ultimate consumer outside of the business structure; i.e., a customer. Although the Amway business is legal (no question), the tool business is not (my conclusion)."
The memo concludes with what appears to be a plan of action. Postma states that "with proper prodding, this business (tool business) will fail." Did that prodding ever occur? Was there ever any plan to initiate the suggested prodding? If so, it was obviously unsuccessful because the Britt/Yager motivation business is alive and well today, nearly 21 years after the Postma Memo was written.
Comments
Jason,
Thanks for your lengthy comment. Let me address some issues. Your quotes will be denoted with this (>>) mark.
>> I have found very little that cannot be explained by a bad upline, that is, sponsers who handle things badly for the IBOs under them.
Please explain two things.
1.) What does the Postma Memo have to do with a bad upline? it addresses the systemic and possibly illegal abuses of virtually ALL downlines and uplines within the entire organization. Britt/Yager represent almost the entire Amway business and still make up the bulk of Quixtar today.
2.) How does an MLM/Quixtar newbie go about shopping around for a "good" upline? Please provide a public list of the various Lines of Sponsorship, their strengths and weaknesses and how to contact and interview them to determine the best one for a prospective IBO.
>> IBOs upline does not benefit financially from sale of these products
Then who does profit from the sale? I think you've missed the whole point of the Postma Memo.
>> Is there any particular obligation here?
Not contractually, no. But in response I ask that you define the words coercion and intimidation.
>> I see a lot of loaded words in your articles.
Well, let's SEE them then. How bout some quotes and links. I actually love loaded baked potatoes. Maybe you got confused.
>> there are many bad people in MLM. There are many bad people everywhere. Thus it follows that the bigger any MLM gets, the more bad people are in it. But saying this makes the MLM bad itself is also tantamount to the infuriating argument that a bad-churchgoer indicates a non-benevolent or else impotent (or absent) deity. Whether you're a believer or not, logic recognizes the invalidity of this particular brand of argument.
I never said MLM was "bad." Show me the quote where I said that. That's what I thought. Let me ask you this since we're getting all "logical," aren't there some really good people who were involved in Ponzi Schemes? In fact, I'd bet that the majority of people in Ponzi Schemes were good and only a few of them were bad people. Does this mean Ponzi Schemes are a good way to do business?
>> this comes with two (also logical) rules of human behavior.
Where do you find these "rules?" Give us some bibliographies. I've never heard of those rules. To counter I'd say no, when I see my "upline" be successful I think, "How can I improve upon what he's done? How can I be even more successful? What can I bring to this equation that my 'upline' hasn't thought of before." But that's just me, not a "rule."
If my success depends on my "downline" I'm going to be damn sure my downline is extremely qualified. I'm going to require resumes, education, experience, references, interviews, etc. I won't "hire" some Joe I bumped into at the Mall.
>> Also, you've commented on the rarity of positive BLOGS concerning or by Quixtar IBOs. But wouldn't it follow logically that any Quixtar IBO would channel any and all energy about the positives of Quixtar into a potential downline
You obviously don't understand blogs. I won't take the time to explain them to you here. Just know that blogs are NOT simply about persuading people to believe something that they don't want to believe. They're an extremely powerful communication tool and the fact that you don't understand this says a lot to me.
>> And I'm going to want as few people of the general public to know about the potential successes of Quixtar as possible, because if everyone was doing it, it wouldn't be profitable
Exactly. ;o) I don't think you realize what you just said but that's the point I've been making for over a year. Thanks Jason.
>> There are three things I want to know outright that I haven't found on your Blog are:
1. Yes
2. No
3. Delivering pizzas
Id like to say Qblog your site has been an I opener for me. There so much more to the Quixtar then anyone in the buisness would want you to know. Id like to comment on the statment about the system of the tapes and all that being optional. Yes I to was told that it was optional but then i was immediatly told so was Succsess. The problem with it is that if you dont participate in the system and buy the tapes most of the time your upline wont participate with you. Most of the people in the buisness are forced into it through peer pressure. Your made to think you will be a fallure without it. So its not just simple to say the system is optional and leave it at that. People are forced into it. Keep up the good work Qblog.
Just to throw a little something else in the mix...
DCI has a contract that you sign that puts you on Standing Order Tapes (SOT's). So, that's two tapes a week EVERY week, delivered to your home. Even when you formally stop the SOT's (which is a pain), you still have another 3-4 weeks of SOT's that come to you. You are strongly encouraged to get on the SOT program and participate in the "inspirational tapes" which is an additional tape per week. 3 tapes a week at $6 per tape (not including shipping) ends up costing over $900 per year.
Then you get the added bonus of getting tapes from the last function you just attended. Which always made me question, "why did I go to this function and spend $90 for the ticket, $200 plus for the hotel room, and pay for my meals and transportation, when I could have had all the info sent to me the very next month for much less?" So why are the functions necessary? Why are the tapes necessary if you go to the functions? Quixtar may or may not be a pyramid (depends on if you have retail paying customers or focus solely on recruitment), but the business support tools are a pyramid. If you doubt that, try finding a purchaser for those tools who isn't in Quixtar.
QBlog, I will put your quotations in quotation marks as I respond to you here.
"You obviously don't understand blogs. I won't take the time to explain them to you here. Just know that blogs are NOT simply about persuading people to believe something that they don't want to believe. They're an extremely powerful communication tool and the fact that you don't understand this says a lot to me."
Why do you feel the need to insult me for posting a number of objective comments and questions? I said nothing against Blogs nor yours in particular. I don't see how what I said is indicative that I lack intelligence or perspective or knowledge. What have Blogs got to do with persuading people? I am speaking of time, energy, and motive. I was making a point about the motives of IBOs vs. the motives of...you.
Does accusing me of "not understanding" blogs allow you and your readers to summarily dismiss any questions I raise? If not, then what was the point of this comment?
"1.) What does the Postma Memo have to do with a bad upline?"
"I think you've missed the whole point of the Postma Memo."
As I said from the first, I was responding to a number of your articles--not this one in particular. I only replied on the most recent one to ensure my comment would get a response, because I, in my ignorant stupor of blogs know that not all of them inform you of comments on archived articles unless you go actively searching for them.
"Where do you find these "rules?" Give us some bibliographies. I've never heard of those rules. To counter I'd say no, when I see my "upline" be successful I think, "How can I improve upon what he's done? How can I be even more successful? What can I bring to this equation that my 'upline' hasn't thought of before." But that's just me, not a "rule.""
To improve upon a method, you have to know the method in the first place. Your own response corroborates my "rule," and if I use the term with poetic liscense, so do many anthropologists, psychologists, theologians and philosophers. It was my own observation that people pattern their lives after others they admire. You're free to disagree, of course.
As far as requiring resumes for a downline, it's not an entirely bad idea, except for several factors.
1. One advantage the Quixtar model advocates is more profit with less time investment. Whether its a good idea or not, most IBOs aren't going to go looking for additional ways to spend time on their business--I.E., on resumes and interviews.
2. Quixtar IBOs presumably are looking for people who want something DIFFERENT than their regular jobs. If the first thing a potential recruit experiences is a request for a resume and an interview, I don't think he is going to be convinced that Quixtar is any different from the corporate business world--again, regardless of whether this is good or bad.
3. Anyone I'd consider for MY downline would have to be someone I know and trust intimately. First, there are things that resumes can't measure--like trustworthiness, organization skills, loyalties, etc. Second, anyone I'D consider for a downline, I already know well enough that nothing on their resume would surprise or impress me.
As a footnote to that, I'll add that I would never sponsor "Joe from the mall." If you've met IBOs who would, that might explain their lack of success, or if they are successful, the lack of morality in their successes--whichever one is your complaint, I'm inclined to agree for any such case.
"Well, let's SEE them then. How bout some quotes and links. I actually love loaded baked potatoes. Maybe you got confused."
Obviously, someone with my lack of intelligence would be hopelessly confused by your quintessentially rhetorical vocabulary. You already pointed out that I must not understand blogs. But in that dim and clouded fog I call my mind, here is what my doubtless vague recollections managed to percieve as loaded words and phrases, as you requested.
"hyenas"
"derailed careers"
"ruined finances"
"sucked" (every other sentence)
"my poor tummy"
"goofy Quixtar rallies"
"Diamond Worship"
"Scamway"
"my cousin was only able to sell product by 'guilting' family members"
"It is kind of a religion"
"slick"
Again, maybe my lack of perception or my low IQ is inhibiting me from understanding the true, enlightened meaning behind these words.
Your loaded response to my attempt at objective and open-minded questioning tells me a lot about your perspectives.
Jason,
You seem to be well-spoken and have intimate knowledge of the business but if I read your first comment correctly, you are not an IBO. Just out of curiosity, what is your history with the business?
In the interest of fair disclosure--I have been an IBO (and previous to Quixtar a "distributor") for almost 20 years.
I have this habit of trying to understand people's perspective while on this blog or the forum. Yours seems unusual so I was just hoping to get a little more detail if possible.
Jason (your comments in quotes),
I like your style. You have an obvious understanding of how to effectively use self-deprecation and I respect those who understand its potency. I do have a simple observation about your initial response. You seem to be looking for insults where there are none to be found. Carefully re-read my comment about blogs and you'll see that there is nothing insulting in what I said.
If you are insulted by having ignorance pointed out, then I'm sorry. When my auto-mechanic tells me that I know nothing about cars, I know he's right. I'm not insulted. Likewise, if you had said that Cascading Style Sheets were stupid way to separate content from presentation I would have said you don't know Web design. It's a fact, not an insult.
I did not and have not discounted anything that you've said based on your character and I challenge you to find an instance where I've called your character into question. If you do "understand blogs" then prove it by making some knowledgeable observations about them instead of what you stated in your original comment.
"As I said from the first, I was responding to a number of your articles--not this one in particular. I only replied on the most recent one to ensure my comment would get a response, because I, in my ignorant stupor of blogs know that not all of them inform you of comments on archived articles unless you go actively searching for them."
Actually, every single comment gets emailed to my inbox, along with your IP address. Commenting here or on the very first post makes no difference to me, I see them all. However, I don't necessarily respond to them all.
Now, if I point out that virtually all blog commenting systems utilize a similar email method would that be considered an insult? I'm not trying to insult you, just point out that you don't know much about blogs. Can you prove otherwise?
"To improve upon a method, you have to know the method in the first place. Your own response corroborates my 'rule,'"
You're right. You must KNOW the method before improving upon it but that doesn't corroborate your "rule." Once one observes, learns and understands the method, then that person CAN improve upon it... or at least try to. What you're proposing is that at no point can the learning process be mutual. That those upline can't learn from those downline. That the process works in only one direction. I say that's bunk. Look at the Web that you're communicating on. It was built by people who mutually learn. There was no artificial hierarchy where the newbie was locked into a position of always learning. On the Web, even newbies can teach the veterans. So to in business and in life.
And as for the "loaded" words, you failed on delivering. Those words aren't loaded. I know you think they are but they aren't. Words are ONLY loaded within a given context. The word "pro-choice" can be loaded when used in a specific context. So too the word "loaded." You failed to provide that context.
Mr. Peters, you may disagree with me and that's fine. Most people do. However, I fiercely reject your mischaracterization of my response to your comment. Believe whatever you wish to believe. I'm not trying to change your mind. Just share my perceptions.
I AM LOOKING FOR ANYONE FROM MINNESOTA WHO HAS BEEN HURT BY THIS PROGRAM. I AM A REPORTER, BUT WILLING TO GO OFF THE RECORD. PLEASE E-MAIL ME IF YOU HAVE ANYTHING.
THANK YOU.
In your above article you disouraged me by saying that you will not necessarily reply every comment they comes on you blog. :S
I am intrigued by your examination of the Quixtar business model.
However, in reviewing multiple articles you have written, I have found very little that cannot be explained by a bad upline, that is, sponsers who handle things badly for the IBOs under them.
For instance, many of the negatives you list involve the perchase of promotional materials, seminars, etc. According to my understanding, these are optional. Also according to my understanding, an IBOs upline does not benefit financially from sale of these products, so any individual IBO selling to his or her downline "pushing" these products would have to be doing so out of at least some sincere belief in the materials themselves.
If what you say is true, and a certain sales have to be made, why would someone waste his time pushing sales in a product that did not directly contribute to his own IBOs profitability? That would be a waste of time.
Additionally, audio CDs come out every month which are either $6 or $12 apiece. I can see that this would be considered additional expense by any particular IBO, but I have not yet seen nor heard of anyone being forced or even encouraged to sign a contract to buy some specified volume of these products. Is there any particular obligation here?
Additionally, I see a lot of loaded words in your articles. Although I am not an IBO, I would find your site even more credible if you used more neutral terms in your observations. It seems like you have picked a number of things you are determined to dislike and labelled them.
Sure, there are many bad people in MLM. There are many bad people everywhere. Thus it follows that the bigger any MLM gets, the more bad people are in it. But saying this makes the MLM bad itself is also tantamount to the infuriating argument that a bad-churchgoer indicates a non-benevolent or else impotent (or absent) deity. Whether you're a believer or not, logic recognizes the invalidity of this particular brand of argument.
The whole point of MLM, in fact, is that you are given the opportunity, to a degree, to seperate your business from those who came before you. You have options. Of course, this comes with two (also logical) rules of human behavior.
1. If your upline has been successful, you're going to WANT to try to model their success.
2. If your own success depends on your downline, you're going to want them to model what you view as successful.
These two easily explain any ethical inter-sponsership-line loyalties, and also provide incentives enough for those who would abuse them.
Also, you've commented on the rarity of positive BLOGS concerning or by Quixtar IBOs. But wouldn't it follow logically that any Quixtar IBO would channel any and all energy about the positives of Quixtar into a potential downline, instead of devoting it to trying to persuade a community already already viewing Quixtar in a negative light? Suppose I'm an IBO and I have a free hour, and I'm in the mood to make positive comments about my IBO and what Quixtar has done for me. I'm going to take it to a potential downline, not a BLOG. And I'm going to want as few people of the general public to know about the potential successes of Quixtar as possible, because if everyone was doing it, it wouldn't be profitable, it would be the standard. There wouldn't be any market for clients or members, not to mention IBOs. Additionally, the % bonuses for downline IBOs don't apply if you have 500 IBOs each doing minimal PV. For your downline to help you, you have to make each member of your downline successful, another idea which turns the modern corporate business model on its head.
There are three things I want to know outright that I haven't found on your Blog are:
1. For those who have accurately applied the model of success, have they been cheated out of money in some fashion?
2. In traditional business, the less money an employee makes, the more money I get to keep. Doesn't the Quixtar model turn this particular numerical system on its head?
3. What would you recommend INSTEAD of Quixtar as a way to make money that offers as much or more potential for income for as much or less capitol?
Posted by: Jason R. Peters | May 19, 2004 6:42 PM