My Talk With Terrel Transtrum

Shortly after my article regarding Terrel Transtrum and his history with LuLaRoe was published, Mr. Transtrum reached out to me. Unfortunately, due to schedule conflicts and travel, we were unable to get an approval for the publishing of my notes on our conversation until just recently. In my original article, I referenced Terrel's history in MLM, and that the man has some links to Herbalife. This is factual. There was a bit of information that I had incorrect, and I want to make sure that I address it early on in this document to avoid confusion later. I included a document published by the FTC. This document was Terrel's company, ServiceQuest's application to participate in ensuring Herbalife's compliance with the government ruling in the lawsuits against them. The document was confusing, in that it never stipulated that Terrel's company was not retained to perform the job. Having that perspective, and looking back at the application, I can appreciate even more, Terrel's statement that it could have been a conflict of interest for him as he had been involved with Herbalife in the past- but felt he could remain objective. Having spoken to Terrel in depth, and getting a real vibe for what his makeup is- I feel confident in expressing that his disclosure of prior involvement and potential conflict of interest was done with full disclosure at heart. In the simplest terms, the man is thorough and views situations from a multitude of perspectives, and it is my opinion that he was offering any additional information that could have had weight in the FTC's decision to hire or decline his firm. That is commendable. For further clarification, Terrel is not involved with LuLaRoe currently and has not been since July of 2016. The corporate information cited in my article is simply out of date and needs to be addressed by LuLaRoe. (What else is new? At least they keep to their theme.) I can say the two-plus hour long discussion we shared was, to use the simplest term- enlightening. We didn't spend much time on LuLaRoe, as it were. Terrel was more interested in putting that chapter of his career away after he clarified there had been no involvement for almost a year. We did discuss a few things that I will dive into with you all later on in this article. Terrel strikes me as a lot of things. Impassioned, professional, deeply caring. He's a man that speaks with specific words chosen beforehand. Every sentence he shared with me was entirely thoughtful, and at times, he remained pensive before answering a question. I found his responses to be balanced and controlled. With that being said, he didn't elaborate much on his relationship with LuLaRoe- or why it ended other than there were ideas and directions he believed the company was taking and then there were directions that were actually taken- those paths didn't line up and they parted ways. I asked Terrel about his expertise in MLM, and the fundamentals he tries to implement with any company he touches. Specifically, I referenced Herbalife- stating that having been with them BEFORE the issues started, being able to watch that fiasco happen, and having the knowledge and the strong example of what can happen if this type of program is built or implemented incorrectly- is really a tool. A teaching by example type of lesson plan. Hey, LuLaRoe, listen: We see what happened to Herbalife because they didn't do x, y, and z. These are the cardinal rules of MLM, let's make sure we don't break them. This type of expertise and insight, coupled with this immense example of how wrong it can go seems to be a priceless asset to a company such as this, and I quietly chuckle to myself at the irony of how quickly the issues began to arise once the man departed. I often compare LuLaRoe to Herbalife in structure- from the inventory loading to the oversaturation. There are parallels that scream in the ear of anyone truly listening, and this path they seem to be on is riddled with the bones of the fallen MLMs before them. Instead of changing course, they pridefully push the remains away with their Manolo Blahniks and Jimmy Choos, and traipse blindly forward. It's maddening to think that I could be the only one seeing the final destination. Luckily for me, I know I'm not alone in my skybox seat to the MLM sideshow of the century. I digress, Terrel is an asset. Affirmative. He left. Confirmed. Life, for him- it goes on. LuLaRoe sure as hell wasn't going to stop to mourn his departure. Maybe they should have. We discussed the fundamentals that he teaches and implements when he takes on a role with a blossoming company. If there was one message only that I could take from my conversation with him- having to scrap all other knowledge shared is: Terrel believes that customer service is the most important part of a business. This, as he puts it- is where you find out your challenges. Where else will you be able to find out all of the feedback from your customer? It's the mop and bucket to a company. This is where the mess comes, and where your team cleans up. He has a firm belief in training customer service individuals to all be on the same page, with the same goal, and the same message. The feedback gathered in this department is huge, and can determine the next direction a company can or should take. Do you invest millions of dollars into rapid growth right now? Or do you take that money and address the issues being conveyed through this department? Essentially- the information that comes through customer service will tell you about the health of your company. This feedback is free- yet priceless. So this portion of our conversation could be used to summarize the man at the other end of the phone. Analytical. Predictable. Thoughtful. Calculating. Caring. Reliable. Think about it. To be able to draw all that information from the "complaint department", it really is a blessing to a business. Looking at this data with an open mind as a genuine opportunity to address issues and always improve upon yourself, these complaints are really a gift. What if generally speaking, all you ever heard about was holes? "Oh I just love your patterns, your fit, everything. But every once in a while, these suckers spring holes." Maybe the statistics don't even indicate a big problem for you. But this is the problem you're hearing the most. Do you take that constructive information and try and find out why this is happening? I sure would. It made absolute sense. Crystal clear sense. But then, on my own, I chuckled again. Knowing this perspective, and applying it to the noted responses from LuLaRoe with regard to criticism, I began to realize just how much defense this company plays. They seem to always be on the defensive. And so I repeat the same thing I have been from day one. Why the hell aren't you guys listening to this stuff? Too much pride, maybe. So Terrel continues on, and he talks to me about the importance of territory restriction. Limiting onboarding. Consistency in order processing. He was speaking from the place of this is gospel on repeat for him. This is his sermon. The same one for every Sunday in every company he stands in. I would assume that this is the same sermon preached to LuLaRoe. Yet here we stand. I asked him about the tax issue and the nexus. Terrel explained to me that the taxes were to be collected by LuLaRoe on behalf of the consultants because it made the idea of a nexus more appealing to the various tax jurisdictions. Statistically, retailers in DS may not know how to file their taxes, or even know that state tax filings were required. The states could have lost over 70% of due taxes if it were left to the consultants to be responsible for. The states liked knowing they were going to be paid- so the nexus was becoming a reality. He said that the issues with the collection of the taxes on Old Bless were a matter of programming issue. Simply put, it just wasn't getting done properly or quick enough. What we see now is a byproduct of leaving the mess too long before trying to clean it up. I asked him his philosophy on upline bonus payments; incentives for team growth... Terrel states that in order to be compliant with the FTC, bonuses need to be sales based. Wholesale ordering or inventory loading should never be incentivized with a bonus paid to an upline. He states that when implemented correctly, a sales based bonus plan from the start sets the tone for those that are joining and building teams to really educate themselves and take a personal investment in who they recruit for their downline. The company itself also should be looking at who makes up prospective representatives. I tend to agree. I feel (from my own sales management experience) that every individual represents your brand. A certain level of competence is required to truly grasp the concept of sales. There's also integrity, honesty, and resilience. Sales can be a difficult job. You have to be able to bounce back without landing on the person that offended you. From the perspective of a sales trainer, not everyone can sell. It really is a talent, and even with the best training, there are people made to sell, and there are some that should never interact with another human in a sales capacity even if their lives depended on it! I feel like maybe LuLaRoe didn't use this filter while funneling prospective candidates. (Especially with some of the uplines. Nudge, nudge... you know who you are, you cocky mentor lady.) I can tell you all that having this knowledge shared with me reaffirms my original feeling on LuLaRoe- even though Terrel and I didn't discuss it much. If this is this man's true practice- what he takes into the fight every time- I can see where the draw to LuLaRoe was. I can see the direction it had been going, and as I stated in previous blogs, I can see almost exactly the date things began to change. I often can be quoted as saying that this company lacks a viable long-term strategy. Or rather- the company lacks a long-term strategy that will keep THEM viable. At some point on the path that they are on, if we are just addressing onboarding- the business model that they are operating will eventually collapse. If everyone becomes a consultant, there can be no customers to sell the product to. Hearing Terrel talk about the importance of territories to me in this conversation silently affirmed my belief that there has to be some limit to onboarding to protect not only the interest of the consultants but regulate supply and demand. So there it was. The wisdom of having helped hundreds of DS and MLM companies sprout wings and fly, hundreds of mops and buckets, and the wisdom and strategy bundled up in the body of a tax attorney. With all of that knowledge and experience, the value of one individual's contribution to a brand can be seen and felt- especially in their absence. Circling back to the past article, and pointing out all the pain and damage Herbalife suffered from making very similar mistakes that we see here and now with LuLaRoe, it really does leave me waiting for the other shoe to drop. We KNOW how Herbalife's method worked out for them. History that is not learned from has a habit of repeating itself. My final takeaway from my talk with Terrel was that he takes ownership of his projects. There seems to be a very true and real attachment and desire for the things he touches to take root and grow. He often referred to "caring about" this or that aspect, and "wanting to help others plant seeds to do much good." I believe that was what he and I had in common when we caught the LuLaRoe's sales pitch. We wanted to be a part of something with so much potential to be something so different, unique, and positive for these women who sold it- as well as the women who wore it. I can see why it is important for him to want to close this chapter and move on. How disappointing this must be for him as it is for the rest of us standing on the side of this road and waiting for what seems to be an inevitable crash.