OK, I'm officially not dreaming, because I saw it on Herbalife's own web site. This is the best news I've seen this whole month. FINALLY, Herbalife admits that the signs are making the company look bad and that government agencies are onto them. I'll be more than happy to see a major reduction in street spam around here.
Here is a post I made over on the HERBA board this afternoon. I made clear my pleasure at the first step and also my concern about the future...
03/20/02 06:44 pm ET Msg: 2993 of 2993
I am not surprised that my previous posting turned out to be factual and directly quoted from official HERBA sources.
HERBA's official announcement and new policy regarding the illegal posting of signs is very welcome news -- and I think stockholders will be better off because of it. As others have said, it also needs to be enforced. We'll see if that happens. I will glady assist HERBA in enforcement as long as they make clear reporting channels available to the general public.
For those who say that the sign issue does not belong on a stock board: HERBA's announcement clearly states the signs "are unfortunately producing a negative image of the company." If your corporate office admits this, why do shareholders and distributors argue otherwise? Those interested in the price of HERBA stock should be very happy with this part of HERBA's new policy.
In any event, kudos to HERBA for taking the FIRST big step in eliminating the illegal advertising signs. At the same time, if the signs are just replaced by other illegal advertising on public or private property, the battle is not over.
Maybe the new policy is why I'm now seeing pocket spam (with the same web addresses and phone numbers from the coroplast signs) posted on QWest property (usually phone booths), drink machines and other private property. These law-breakers uses extremely sticky tape that is impossible to remove completely -- and the law calls that defacing or destroying private property.
HERBA's announcement also includes the statement that that pull-tabs and flyers are "extremely effective sales tools" and that distributors "can continue to saturate" their areas. They quote the same mealy-mouthed caveat they used to use for signs: only in "a manner specifically allowed by any federal, state or local ordinance, law or regulation." And we all know how non-effective that caveat was for signs.
If these people didn't look up the law regulating illegal signs, what makes anyone associated with HERBA think these same distributors will do so for other types of advertising? Illegal advertising and trashing of our communities will not be tolerated, be it coroplast or cardboard signs, pocket spam, flyers or any other advertising that is posted contrary to the law.
You won't hear much more from me on this board -- until I see more illegally posted HERBA spam in my community. Remember, HERBA officially says that illegal advertising methods "are unfortunately producing a negative image of the company."
And that hurts shareholder value.
I wish HERBA much success as long as they and their distributors advertise legally and responsibly.
After a quick wander through various international versions of herbalife.com, I've found that only the US and Canada have new sign policies.
It's a great win for us, but I bet the rest of the world is going to still be digging themselves out from under coroplast for years.
By the way, if this really does turn out to be the end of Herbalife on our streets (fingers crossed) what's everyone going to do for their next hobby? I'm going to dedicate my spring and summer to large amounts of skydiving!
Realistically, though, how long do you think it would take for this new "rule" to trickle down to all the distributors?
First of all, there are known rogue groups of distributors who care more about money and less about policy. Take "newest way to wealth" for instance. It's a group of high-level distributors that are more interested in just getting a downline than anything else. There've been tons of complaints to Herbalife corporate regarding these thugs ignoring Herbalife's policies on favoritism and such. I wouldn't put it past them to continue ignoring this new policy, if they believe that using illegal signs helps their business in the least.
Secondly, the people who have actually bought into a distributorship by calling the numbers on those signs probably WONT be told not to use those signs when they're asked to continue the pyramid of advertising. It's already given that these particular newcomers think the signs are effective and acceptable.
One of the reasons herbalife doesn't actually employ their distributors is so they can disclaim any responsibility for their actions. These independent distributors hide behind voicemail boxes and obscure boilerplate web addresses knowing well that they're doing it to avoid harrassment by people who object to their activities. I really don't think they'll let this change their routine if they've purposely taken this "shady" route to begin with.
