You may remember Holton Buggs being featured as a Rising Star in the Mar/Apr 2005 issue of Networking Times. Almost a decade later, we felt it was time to share part two of his extraordinary journey that led him to become a legend in the network marketing profession.
Growing up in the projects of Tampa, Florida, Holton watched his single mother work multiple jobs to take care of him. At night she would tell him inspiring stories instilling in him the hunger and determination to soar like an eagle.
Taking her message to heart, at age fourteen Holton started cutting hair to make money, then saw the limitation of doing all the work himself and discovered leverage by buying candy in bulk and recruiting others to sell it for him. One of the people he recruited was Earlene, who is now his wife and best friend.
Holton went to college to get an engineering degree, but quickly realized that working for a salary would not afford him the lifestyle and financial freedom he desired. At age twenty-one, he and Earlene started their first of many businesses. Although they were successful and made money quickly, they were time poor, because no one else could do what Holton needed done.
Realizing he had to do something different, Holton remembered being introduced to network marketing in college, and how the business model had inspired him. He joined a company and had a difficult start, but kept studying with his mentors and applying himself to master the success principles of the business.
Twenty years later, Holton is leading an international organization of well over a half a million people. When his company founder offered him the position of executive VP of sales, Holton took on the challenge as he saw it as an opportunity to earn a voice at the corporate level to protect the field.
No matter his title, Holton remains a distributor at heart. “I am a business man who simply uses network marketing as a platform to distribute products,” he says. “I love the new experiences and the ability I have to create and innovate. Having the best of both worlds, I feel I’m one of the most fortunate distributors in our profession.”—J.G.
How did you get started in network marketing?
When I was in college, one of my dorm mates invited me to a meeting. I had never heard of multilevel marketing and didn’t know what it meant. I was focused on becoming the best engineer I could become. But I had the entrepreneurial spirit in me so I didn’t give him any hassles whatsoever. I was open so I went, and as I walked in, I saw a couple hundred people all dressed up professionally. I was already sold because I had never seen that many people, specifically from my community, dressed up in business attire. The presenter, a retired pharmacist, was absolutely hilarious while driving home his point. I liked him and immediately decided this was going to be my profession. I continued with my studies as I built my business. I started in 1990 and until 1997, I never made more than $500 a month. But I studied amongst the best and learned the culture. I never missed an event I qualified to attend and I fell in love with the business. I just didn’t understand how to make it work for me at the time.
What happened after seven years?
When I graduated from college, I became an inactive member in my network marketing company and started a furniture business which became pretty successful. I made the most money I had ever made and we bought our first home. Things were going well—and then the bottom fell out of that industry for me. Suddenly I found myself a quarter million dollars in debt, forty-five days away from foreclosure, and I just had my car repossessed. I started looking for another way and a gentleman introduced another program to me. He just wanted me to be a customer and I was the one who asked him, “Is there money to be made with this?” I went to a meeting and that was my reintroduction to network marketing. I did well in that company but it ran into some challenges. I realized at that point that the problem wasn’t the company, it was me. Young entrepreneurs typically are attracted to fast money and easy work. Just as we make poor choices as kids growing up, most of us have a maturation process in network marketing. I didn’t choose companies that had a strong customer base or even had a product that was really consumable. Sometimes we think that just because you make a lot of money in a company, it’s a good company. Not necessarily, it may be a bad concept that happens to pay a lot of money.
Once I understood that, I made a better choice with my next company and stayed with them for six and a half years. That’s where I found my foothold in the business and became a network marketing professional.
That company ended up going through some ownership changes and I started to look for what else was possible, knowing I hadn’t reached my potential.
One day I was on the beach in the Florida Keys with a friend who was a company CEO. He pointed to a gorgeous home that was owned by a top-earning network marketer. I asked him who it was and he told me it was Jeff Roberti. I had heard the name before but didn’t know him, so I asked, “How many people does Jeff have in his organization?”
He said, “Jeff probably doesn’t even know, but he has hundreds of thousands of customers on auto-ship throughout the entire world, and that’s why he’s doing so well.”
That’s when I decided I wanted that story myself. Most networkers around the world, including me at the time, stand up in front of audiences and talk about freedom—being able to go to sleep when we are tired of staying up and waking up when we are tired of sleeping. We talk about financial independence, but I would venture to say that very few, less than 5 percent of the top earners, have that freedom we talk about. In reality, most of us have high-paying, nighttime jobs, because our income has never been based upon true customers.
I didn’t want to be the eternal recruiting machine that had to continuously re-invent itself so we could recruit in different ways because we had already run our course. That’s what I’d seen most companies do. I wanted a program that wasn’t so recruiting-intensive but product-intensive.
How did you find your home?
I was evaluating twenty-three different companies at the time. I did not fly out to see any of the owners. I simply did my own due diligence and my current company was not on the list. One day I got a phone call about a coffee company and I remembered I had a box of that coffee in my pantry that had been sent to me four months prior. I went into my pantry to sample the coffee and I made that the twenty-fourth company. It tasted great to me, but I wasn’t a coffee drinker, so I gave some to my wife, and she told me she thought the coffee was better than Starbucks. I gave it to ten of my neighbors, and all ten of them thought it was incredible. I had seven people who wanted to buy more and three who asked me about the opportunity, even though I’d only gave them a sample.
I had not yet signed up into the company at that point. Then I sent some product to my mother, my mother-in-law, and my father. My mother-in-law made four customers within the first 24 hours even though I hadn’t told her it was network marketing. She just gave the product away and people wanted more.
Here I was, building a customer base without being a distributor. I had never done that in my eighteen years. I had always been focused on compensation plans and leaderships systems and designing the culture of a business. I had never gone out and enrolled customers on a large scale, and here I was, not even a distributor, and I had more customer interest than distributor interest.
Based on this story, how would you summarize your criteria for selecting a company?
First, I wanted to make sure from a cultural standpoint that the leadership had not been cemented into a company. There’s nothing worse than going into a company where the CEO has already made his or her picks of who’s the leader, and nobody can surpass that person. What happens in this case is, there’s this inevitable lid placed on the organization that prevents anyone from being better than the person who’s already at the top. This stifles the company’s growth and I did not want to be a part of that. When I joined my current company, it had no network marketing leaders; it was simply a group of people who loved the product and enrolled consumers.
Second, I wanted to make sure it was affordable for people to stay in the business, which I consider has nothing to do with the cost of the product. Affordability comes down to how much more you are paying now that you’re a member of this company than you used to pay prior to becoming a member of this company. For example, if your auto-ship is $20 a month, is that affordable? Most people would say yes. I’d say it depends.
Let’s imagine your product was napkin holders. Did you buy $20 worth of napkins holders last month? Probably not. What about the month before? No. Well, $20 is too much because it’s a foreign product, you’ve never had it before. Somebody just convinced you that you needed it and now you’re spending $20 more than what you’ve budgeted.
On the other hand, what if your product had a $300 a month auto-ship minimum? Most would say that’s too expensive. But what if the product were groceries? Would you spend $300 a month on groceries?” Yes. Did you spend $300 on groceries last month? Yes. It’s not too expensive because it’s not more than your normal buying pattern so there was no behavior modification necessary.
Third, I want to make sure that after building a business for two years the income that one would earn as a result of people consuming the product is greater than the income that one would earn from those who were just benefiting from the compensation plan. In other words, the residual income generated from non-participating customers would be greater than from the internal product promotion of distributor recruiting. That’s exactly what I found with my company.
Once you found everything you were looking for, how did you launch your business?
We built faster than I had built ever before. All the things I had done in my previous companies in terms of creating systems and training modules, I realized I no longer needed them. Many of those things made me look good and sound educated, and while I impressed many people, most of it did not duplicate. I now call all those trainings the 51 ways to confuse distributors. I’m not saying we shouldn’t educate people. There are certain trainings people do need, such as what to do with the money they earn and other aspects of financial literacy, but we kept it very simple. We put together the four simple questions for prospecting and four steps to getting started, and that’s all we did for the first six months. I got started in 2008 and one year later we did our first event, which consisted mainly of recognizing all the people who had achieved success from using those four steps.
Because we made the simplicity of our business appeal to everyone, we started to attract people who were not networkers. The reason our company has succeeded the way it has is because we’ve got one unified message. Most start-up companies go after networkers from other companies and try to bring them over. They start off with ten or twelve great leaders, but the problem is, when it’s time to launch the company, they now have twelve different philosophies and twelve different systems people have actually used to promote the business, and this creates a lot of confusion.
We stayed away from networkers because we knew they would come with their successful ideas of what they had done before, and that’s not what we wanted. We had found a very simple way that we knew worked, so we went after mom-and-pop dreamers who didn’t know the business but who loved our product.
Another advantage of working with customers and distributors who don’t have a lot of experience is that they don’t have the bad habits of going from company to company. They don’t even know how to evaluate or think about this comp plan versus that one. John Maxwell said, “Spend more time on the farm team than you do on free agents,” and that’s how we’ve built our business.
Five years into it, how has your organization grown?
We currently are in thirty-three countries and we have one single culture. Everybody embraces one system—the four questions and the four steps. It’s the first time I’ve seen this in network marketing. It’s not that we have the most talented people; there are more talented networkers around the world in many different companies. It’s not that we had the biggest budgets; we didn’t. This company was started on a shoestring. But because we have a seamless message and mission, you can send people to any of our open markets, and the presentation is going to be the same in different languages, which creates predictability.
It’s almost like a franchise, minus the investment.
Exactly, we call it the franchise mentality and our customers love it. Because we didn’t work with experienced networkers, our business didn’t explode as quickly, but it has much stronger loyalty—which makes all the difference. When you’re working with people who are looking for the highest bidder or for who’s going to make a deal with them, you’re building a house of cards. We wanted to build something that was going to be solid.
I have zero regrets about how I started, except for the fact that my first month I sponsored forty-two people and I probably would have sponsored only twenty-five, because we didn’t have the system in full effect at that point. I couldn’t work with all forty-two and therefore some people were left by the wayside.
We started with a bilateral focus on customers: our first goal is to build a large repeat-consumer base; the second goal is to enroll entrepreneurs who are going to help us build that customer base. The focus and the end goal have always been customers.
How and why did you transition into becoming the VP of sales?
I worked with two amazing leaders I deeply admire. The first was Shane Morand, who was my sponsor and the company’s global mass distributor. He was 100 percent open to my ideas because of the eighteen years of experience I brought. He always asked questions and encouraged me to share my expertise with the entire company. The second person was Bernie Chua, who came to me wanting my ideas to be officially shared with the entire company, so he made me the executive vice president of sales at our convention in 2010. At that point, I was excited because I felt I could spread my wings without any trepidation or hesitation from the owner or from our global mass distributor. They just trusted me and said, “The field is your experience, why don’t you lead the sales team?”
Our sales went from $9 million in 2009 to quadrupling in 2010, so it was a transition made out of necessity. I didn’t believe somebody else who didn’t know the team or the culture could come in and tell us exactly what we needed to do. Instead, I stepped up to the plate and took on that responsibility.
Having a corporate officer also be a leading distributor is something that’s often frowned upon in our business, because people feel there might be a conflict of interest. I looked at it differently. I told Bernie, “I’ll take this position on one condition: I get to keep my distributorship. Here is why: when people in the field see that I transition from the field to corporate and my income now comes from a corporate job, they’re going to feel a sense of threat, as if I’d gone to the other side. The trust I had built with them will be gone, or won’t be as strong.
“If, on the contrary, I feed my family the same way they feed theirs, they’re going to know that the decisions I make or support will be in the best interest of the field because they know it will affect me just as much as it affects them.”
Bernie agreed with me, and because of that, we don’t have an issue of corporate against the field. Many companies fail because they lose touch and don’t understand how distributors feel. If the company’s executives don’t understand what it takes to make $1 profit, to make a sale, to sponsor a person, they’ll quickly lose the trust of the field, and when that happens loyalty can’t exist.
Despite having a simple system and a great product, distributors still experience challenges. What are they, and how do you overcome them?
The challenges people experience in network marketing don’t come as a result of the business. Being in this profession now for twenty-three years, I found that they come in four different categories.
The first is financial: people have money problems, not necessarily due to their lack of results in network marketing, but due to their own conventional ways of earning money. It takes a strong person to build a network marketing business full time through a financial challenge.
Second, we have relationship challenges. Sometimes when a person is involved in network marketing, because it’s a people-based business and it kind of crosses over into your personal life, they will blame their business for causing their relationship to go bad. That’s usually not true. The same issues you already had are coming to the surface now that you’re involved in network marketing, but the roots of those challenges were already there. We counsel people quite often on how to handle their personal and business relationships and how to work with others.
Third, people have health issues. Some of them are unexplainable; some of them are challenges that can’t be fixed. Some of them are things that none of us can do anything about whatsoever, but those can be big challenges whether they’re temporary or permanent.
Fourth and finally, people have spiritual challenges. We’re not preachers or pastors or priests or anything of that nature, but I consider that in a healthy organization people must have a belief in something bigger than themselves. Whatever that belief is, they’re entitled to it.
Meanwhile, I don’t think network marketing is the place where leaders should display their spiritual preferences. My family and I are very spiritual, but we don’t profess our faith from the stage or on conference calls. Often leaders will promote their spiritual preference or even political preference, and this can cause conflict, especially internationally. People who are confused will start to follow you just because you’re their business leader and they feel you must also be right about your spirituality. Some countries we go to are completely Muslim, some are completely Buddhist. Some countries we go to don’t have a strong spiritual presence and it’s not our job to go and teach them about that whatsoever. We just hope that people do have some higher calling they believe in, as it will help them on their journey to success.
Whether in network marketing, traditional business, or a job, these are the universal challenges people face. That’s just life and network marketing is nothing but life. It’s just a non-structured way of generating income while life continues to happen. You still have to find a way of dealing with all these issues yourself and helping others to get through them—not solving their problems for them or giving them the answer, but being there for them. This community aspect is an important part of our culture, which I call a friendship culture. In our business Diamond is the first top rank, so I tell people, if you build a friendship, you’ll build a “diamond-ship.”
You’ve reached this extraordinary level of success, with such an incredible curriculum behind you. What is there to look forward to?
We just celebrated our fifth anniversary at our convention in Las Vegas. We actually had two sold out arenas at the Mandalay Bay. The first five years is what we consider to be Wave One or laying the foundation. Wave One was building with that non-networker, that ordinary American or person in any different country. We didn’t care whether they had experience or a big circle of influence, yet we built a successful and profitable company with some of the top-ranked distributors around the world. Our number one distributor, Jose Ardon, is a guy with a fourth-grade education, just thirty years old, and I believe he is the highest earning Latino distributor in the history of network marketing. We’ve got the top earning networkers of multiple different cultures, from Canada to Greece and Italy, including the top earner of African descent.
As we enter Wave Two, our opportunity has also become appealing to the person who has a longer reach. They’re not necessarily networkers but maybe that corporate professional who has been making half a million dollars for the last fifteen years but can’t get to a million. Maybe they’ve been earning a six-figure income but they want to get to $200,000, or whatever it may be. We’ve got so many non-professionals from housekeepers to house cleaners, from bus drivers to pizza delivery people, who are now six- and seven-figure income earners, showing that if they can do it, anyone can.
Our company recently launched a customer retention program we spent hundreds of thousands of dollars in technology to build. Our philosophy is that it’s the distributor’s job to go out and get the customer, but it’s the company’s job to keep those customers happy and involved. We’ve hired a completely new division to service customers because we know that while distributors are really good at acquiring customers, they’re horrible at keeping them. They don’t follow up or deliver on the promises they made in the beginning, because they’re on to the next recruit. We’re changing that by building a strong relationship between the company and those customers so that we can build that loyalty, that trust factor within the customer base. That way when we introduce new products, our customers already have a trusted friend in the company and will easily accept those products.
Wave Two is attracting people whose influence is much broader. Because of the success of Wave One with non-networkers, Wave Two will work beautifully and it’s pretty exciting as we continue to grow and expand.