Click the image to see original article
MonaVie is experiencing a slight erosion in its distributors. It happens. Companies get mature, the original excitement wanes, the once sexy and cutting edge ingredient becomes a commodity and various leaders start looking for the next best thing. It’s certainly not the end of MonaVie…they’re one of the largest companies in the industry. They’re simply facing some struggles that’s not unique to their business or this industry.
Rod Cook, MLM Consultant and editor of the MLM Watchdog site, referenced some of MoanVie’s struggles in a video and cited a few reasons for the decline: expensive monthly autoship requirements, lawsuits against distributors after publicizing their “Open Door Campaign” and changes in their compensation plan.
Experience is the best teacher
There’s a lot to be learned by watching companies work their way through struggles. There’s a saying that says: “The best teacher is experience and the best experience is someone else’s.” In 2007, Amway went through a bad regulatory experience in England and made subsequent changes that literally saved their business. There’s a lot to be learned from their adjustments in England and in the United States.
So how is MonaVie responding? They’re dropping their prices, increasing their PV and rolling out a free shipping program for distributors on AutoShip. In short, the story of the acai berry no longer supports the hefty margins from the early days. They’re also doing something a little more subtle: they’re locking down intellectual property rights to give their product a clear point of difference from other comparable items in the marketplace. I’m calling this a “Push for Proprietary.”
The “Acai berry” is an amazing product with incredible health benefits; however, it’s no longer a strong selling point to say “we have the acai berry” because the berry is EVERYWHERE. It’s in shampoo, countless juices, ice creams, smoothies, coffees and energy drinks. It’s even in vodka, which is just weird!
In the past, I’ve written about the importance for companies to commit to innovation to keep their distributors armed with relevant products. It’s a challenge for companies because the speed of innovation across the world has accelerated. Companies can either innovate fast or lock down the proprietary rights to their products via patents.
Since the Acai berry is not proprietary and MonaVie is not able to lock it down, they’ve recently patented a “brand” of acai (dubbed “AcaVie”), which I’m guessing includes a unique extraction method. The “AcaVie” logo will now appear on the MonaVie bottles in their effort to build up the value of the mark “AcaVie,” which they own. So when a prospect says “Why would I pay $X for a bottle of monavie when I can get the same thing for $Y at Walgreens?”, distributors now have a stronger point of difference by saying “We have the exclusive rights to AcaVie, which offers the most health benefits associated with the acai berry.” It gives distributors another point of difference to justify the price of the product.
Understand, this is not MonaVie’s first patent but it’s an example of leveraging “Proprietary” to protect a product from price erosion. “Proprietary” is an important word in the direct sales industry. If a product is proprietary, it serves as an assurance for the distributors that they’re not building up the brand awareness of a product that will eventually devolve into a commodity once it gets duplicated. “Proprietary” insures the sales force that their sales efforts will stick. Right now, brands hanging their hat on the Maqui berry or any other hot ingredient should learn from MonaVie and think of ways to at least patent the process by which the ingredient is extracted or used.
What do you think about this? Is MonaVie making good changes to protect their margins? What can other companies learn?