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August 18, 2004
Platinum INDEX 2004
By QBlog in
A site visitor sent me a copy of a 2004 Platinum INDEX (INdicators Driving EXcellence). It's very similar to the 2002 Platinum Index I posted about in May of this year.
What Is The Platinum INDEX?
Well, I believe the Platinum INDEX is an annual report that compares portions of a Qualified Platinum's downline performance to the performance of a "Typical Platinum" in their specific Line of Sponsorship (or Affiliation). Both those numbers are compared to the median performance numbers of Q-12 Qualifiers throughout all of Quixtar, not just one specific group.
What Does This Mean?
Well, first of all it means that Quixtar hasn't updated their performance numbers since 2002... unless those numbers simply haven't changed in two years, which is possible I suppose.
Also, when you compare the 2002 INDEX to the 2004 version you see a couple of items have disappeared. "Percentage of IBOs who ordered or registered in the most recent 4 months" is missing from the 2004 INDEX. And, the "Percentage of IBOs who earned 100 or more personal PV at least one month" is gone. I wonder why those items are missing?
Median vs. Average
What startled me about the Platinum INDEX is that it uses median (Mid-point) numbers instead of averages. I've been critical of the Quixtar Average Income ($1,380 per year) in the past mainly because it's the average income and not the median income (average vs. median explained). See, averages can be easily influenced by extreme values and this fact is what many IBOs latch onto as an explanation of Quixtar's very low income figures. However, it's much more difficult to explain away median numbers because they represent the Mid-point of a group, not the average.
So, keep that in mind when you look at those blue numbers.
UPDATE: I've been alerted by someone with superior math skills that my understanding of Median vs. Average, specifically as it relates to the Platinum INDEX, is somewhat simplistic. Math is a weakness of mine and so I defer to Jennifer's explanation which is included in italics.
When people talk about average, what they really want is the "likely" result.
Example: If you meet a grown male, what's his likely height? If you start work as an engineer, what's your likely starting salary? The reason why "average," eg. mean, is a good indicator is if the distribution is a bell curve, most of the results will fall near the average. To visualize, draw a bell curve and draw a line through the middle and you'll see most of the area under the curve are near the average.
However, if the curve is just a horizontal line, average is a poor indicator. Likewise, if the curve is an inverted bell or has 3 humps, average is a poor indicator.
Now, the analogy for the Platinum INDEX:
Let's say you're considering moving to AmericanTown. This town has 100,000 household (1,000 neighborhoods, each with 100 houses). The citizens are randomly assigned a house (the town is trying to be egalitarian).
If you want know how much money each household is likely to make, you may ask for the "average household income." However, this may be misleading since you don't know what the income curve looks like. It may be a triple hump (large lower class, small middle class, and a tiny upper class).
If you want to know what each neighborhood income looks like, you can still make a reasonable guess even if you don't know the exact income curve. In fact, the neighborhood income curve will be bell shaped (this is the gut of the Mean Limit Theorem).
Think of each household as an IBO. If you want to know how much income an IBO is likely to make, you will have no idea unless you have a picture of the income curve.
Think of each neighborhood as a Q-12. Even without knowledge of the IBO income curve, you can still surmise that most Q-12 (80%) will have roughly 200 IBOs. You still can't tell if it's 160 IBOs making around 38 PV/month and 40 making more or less or 160 IBOs making 0 and 40 IBOs making 190 PV/month. If someone shows you the 6-3 plan (24 IBO total), you know that this is very unlikely. If someone shows you the 9-6-3 plan (~200 IBO), you know this is very likely.
Still doesn't say much about evaluating MLM, but hopefully the analogy will give you a better understanding of averages so you won't be taken for somebody trying to deceive with averages and statistics.
Thanks much Jennifer. My intent is never to deceive so thanks for clearing that up.
Comments
Wow, those numbers are bad!
Keep in mind, that 18.4% of IBO's register at least one person. Well, with groups like TOD (50,000 IBO's?) stacking everyone under everyone else that must help those numbers quite a bit.
YIKES!
That is just sad, sad, sad. Any normal company's senior management would be baying for someone's blood.
But I guess any normal company would be discussing the movement of products at a meeting, and not sitting in a sports arena watching videos of nice cars ;)
No comments from IBOs?
(chirp, chirp, chirp) - crickets
OK then. Let's get back to talking about what a great business opportuinity this is! This thing is AWESOME! Never mind the quality of the concentrated products.....
Quitters.
The silence is deafening.....
You can't argue facts, which is why so much of the "plan" is steeped in emotion.
Porkchopjim writes: Kills that whole hypothesis that Quixtar will saturate, doesn't it?
ASfar as I know, saturation of a market does not mean everyone joins/buys the product. It means that everyone who will, has already, whether thats 1% of the population or 80%.
I might consider my market saturation point reached if the cost of getting a new customer is more than the revenue they bring in, actually, even if they might buy the product.
I never heard of this company except yesterday (May 6, 2006). Thanks to the internet, this morning I started researching.
Thanks to this blog. It is great. I was not sold at all to begin with. The only thing that seemed different was the fact that you did not have the Internet when Amway and other MLM's started.
The question of price and quality is of extreme importance.
It appears the company loses nothing. The $300 sign up costs, more than makes up for the "training materials."
I am a member of CostCo (Price Club). I still have to see an advantage in this setup for the consumer.
Your "success" here depends on how many suckers can you sign up. The SALES are not really sales. People who are part of the system seem to buying most of the products.
Are there any numbers out there that could tell me how much of the products were actually bought by people OUTSIDE the Quixstar system?
Well,
I'll bite again. I was the only post on the last one.
Only 13.9% of the overall IBOs registered ONE person. The IBO that sent you this excelled and had 18.4% register someone. Kills that whole hypothesis that Quixtar will saturate, doesn't it? Or, maybe, marketing by creeping around malls is a sucky way of marketing? Either way, seeing as you need 1,000 people in your downline (TOD need not apply) to make Diamond, these folks best get out of the meetings and get out to recruiting!
Only 32.1% of the IBOs renewed (lots of losers out there, or maybe recruiting in fast food joints isn't the best method?...)
Median monthly PV for IBOs is 38.7 overall and 54.7 in this case. Don't you need a lot more than that to get a check? And these are the folks who 'see the dream?'
Percentage of IBOs with 'Ditto Delivery' - overall 21.5%. What was that whole 'frontloading' thing about?
IBOs - these numbers suck. Bad. If this was a legit business, it would have been gone a long time ago. If I brought these numbers to my boss in my J-O-B, I would be hung out to dry in front of all. If my personal business had numbers like this, consistently, I would be considered a crack-pot if not for some support system that keeps me wasting my money.
I like to see the use of medians, but I strongly feel that if it made a difference to anyone other than those of us who pay attention, it wouldn't matter....because both sets of numbers SUCK.
I'm willing to bet an average/median IBO's monthly check on that!
Posted by: Porkchopjim | August 19, 2004 2:12 AM