THE OFFICIAL ANSWERS TO "WHAT IS ACN?” AND "DOES ACN WORK?”
ACN is an MLM (multi-level marketing company) and relies on self-employed sales people (referred to as ‘Independent Business Owners’) to introduce its various products to the public. Very broadly, it sells telephone services, internet services, satellite and digital TV, home security, and, as a recent addition, gas and electricity services.
Essentially, ACN is a middleman that brokers services to people who need them. The deregulation of electricity, phone services, and other utilities has created a new market that puts more power in the hands of consumers and ACN is attempting to capitalize on that power by placing utility selection in the hands of a direct sales team.
HISTORY: HOW DID THEY GET HERE?
No matter what your opinion of the direct sales marketing arena, you must admit that the list of services available through ACN covers quite an impressive range of markets. This diversity, and the company’s apparent success makes worth the time investigate how ACN got to where it is today. The American Communications Network (now known just as ACN) was founded in 1993 by current chairman Robert Stevanovski along with Gregory Provenano and brothers, Mike and Tony Cupisz. At first, its activities were limited mostly to reselling long distance telephone services. Things really took off for ACN in 1996 with increased telephone deregulation.
This enabled ACN to start buying services from existing providers such as AT&T and Qwest before re-branding and reselling them. Gradually they branched out into reselling cell phone services for all the major providers in the US; providing DSL high speed internet services through the Qwest, Verizon and Covad networks; reselling satellite TV (working with both Dish Network and Direct TV) as well as reselling home security from ADT (ACN Inc., 2013). They are, at their core, a brokerage with no distinctive product line of their own.
THE MODEL: DOES THE ACN BUSINESS MODEL ACTUALLY WORK?
Repackaging and reselling services from incumbent providers in itself is pretty non-controversial. However, problems do seem to stem from the whole concept of network marketing. The most candid of theACN reviewsout there don’t shy away from this issue. It seems that it’s all too easy to drift from legitimate multi-level marketing into a pyramid scheme.
The headlines back in 2010 suggested an ACN scam when a Cease and Desist Order was issued in Montana concerning the operation of an alleged pyramid scheme (Abbott, L., 2010). It seemed that some independent agents were more concerned with enrolling other people into the sales scheme than with actually selling services. In the end up it turned out that these were isolated incidents involving a few rogue sales agents. The ACN training manual was toughened up and the company itself reportedly saw the outcome as ‘positive’.
Looking at theACN Compensation Plan(issued to would-be salespeople), the company does stress very clearly that payment is only made for selling to customers and not for recruiting other salespeople (Stephan, 2012). It seems to be a hard lesson well learned by ACN, in the US at least.
Despite these legal hiccups, it seems that the company has been able to weather the storms of controversy. An ACN stock dip is not on the horizon and revenue for 2013 is expected to exceed the $550 million achieved last year. The company operates in 23 different countries across North America, Europe, and the Far East and is reportedly the 19th largest direct seller globally (Direct Selling News, 2012).
IS THE PRODUCT POPULAR? WHO IS BUYING IN?
Deregulation of phone and energy supplies is a global phenomenon and there’ll always be a market for re-branded communications services in attractive packages. The company has had the occasional foray into developing its own equipment, the ACN phone being one notable example, but generally these products have not created a notable splash in the market. The verdict is still out on the IRIS X videophone but with the prevalence of Skype and similar apps, this is likely not going to be a huge market.
When it comes to the marketing model, it’s a case of noACN newsis good news and it’s inevitable that the odd ‘bad apple’ will crop up from time to time in the form of rogue agents. If ACN’s reputation can cope with that, the future looks pretty solid.
ACN BUSINESS BUILDING: IS THE TRAINING AND COMPENSATION ENOUGH?
ACN payment is based on the number of customer points that a representative has earned by getting customers to sign up for new services and on the number of representatives, they have beneath them doing the same. Since there are no products, there is no opportunity for cash profits made from retail sales like there are with most other direct sales businesses.
Commission is set on a base of 1/4 %, and increases to a maximum of 10% for high-ranking leaders. There are a total of seven levels of leadership that team members move through, from Representative to Senior Vice President. The compensation plan is aunilevel planthat places all of your personal recruits on your top-line.
CAB (customer acquisition bonuses) are also available and are paid to representatives when they sign a new customer up for services. These range from $10 to $50 depending on the level of leadership the representative has acquired and where the new customer is in their downline.
ACN trains new representatives to rely on "relationship marketing” or selling services to friends, family, and day-to-day contacts. This means that the marketing skills and techniques presented fromACN trainingare relatively limited and may do little to promote the growth of the kind of infrastructure or team dynamic needed to begin earning a full time income (Ward, 2013).
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