Letter from Zeek CEO Paul Burks
Greetings!
It’s early Saturday morning and I wanted to get this letter out to you this weekend so that you could have a chance to digest the things I’m about to tell you before Monday evening. As a ZeekRewards affiliate you have probably heard that there are some enhancements, updates and other changes coming and some of our affiliates may be a bit confused, even concerned, about them
Any time a company makes changes in the way it’s affiliates get paid there are always questions that need answering. Why is the company doing this? Does this mean the company is having trouble? Do I need to be worried?
Hopefully this letter will put some of those questions to rest. I want this to be a “straight from the horse’s mouth” resource that you can refer to and refer your fellow affiliates to. I’m going to try to address all of the concerns (at least all of the ones I’ve heard about) in this one place.
Q.- First, why are we changing anything to begin with? Wasn’t the ZeekRewards system working perfectly well?
A. - Absolutely! ZeekRewards and Zeekler.com are among the most successful and fastest growing companies on the Internet. Since January we have seen unprecedented growth and the company is solid, stable, debt-free and healthy. Our affiliates have enjoyed tremendous success. So why change a good thing?
Here’s the reason, and if anyone tells you otherwise they simply don’t know what they’re talking about. Since we designed our pay system there have been some legal decisions that involved other companies’ pay plans but, because of similarities that those other pay plans had to ours we felt it was wise to get competent advise to avoid potential problems down the road.
If you have ever been involved with a company that got in legal trouble you know that it is not a pleasant thing. Even if the company eventually wins in court the damage is usually already done and survival is rare. We do NOT want that to happen to Zeek Rewards!
So we hired the top MLM consultant in the industry, Dr. Keith Laggos, PHD, and we hired the top MLM Law Firm, Gerald Nehra and Richard Waak, to analyze everything we are doing in light of recent litigation and advise us where we might be vulnerable to regulatory attack.
Q. – Okay, so what did the consultants and lawyers have to say?
A. - First, they spent several days studying exactly what we do and how we are presenting what we do. Then they spent many hours on the phone with Dawn and with me digging even deeper into how it all works. They wanted to fully understand all of the intricacies. We laid it all out for them.
Once they digested everything they came back to us with a few key points that they felt were the most likely to eventually attract negative attention. Their advise was simple: Fix these things or, sooner or later, the program will likely be attacked.
Q. – So what were the things that needed fixing?
A. - Here are the main ones:
A 2X21 Matrix, by itself, can possibly be seen as violating Interstate lottery laws. Especially with no qualifiers in place where someone who is lucky enough to have an active upline can get enough spillover to earn thousands of dollars a month for doing nothing. Additionally, basing the commission rate entirely on the affiliates paid subscription level could be an issue.
Paying Daily Profit Shares based on the amount of an affiliate’s purchases creates the potential for an SEC challenge for offering a “passive investment”. This was especially true when a specific earning percentage (125%) was being mentioned. Even with the complete Legal Disclaimers that we were using they still felt we could have problems later.
In the MLM industry there have been numerous court decisions addressing what is called “garage qualifying” or “front-loading”. That means permitting affiliates to purchase large amounts of inventory that they never use or sell simply to qualify for the pay plan. It is generally understood, industry wide, that affiliates must use or sell at least 70% of their purchases before they can purchase more. Our automatic daily repurchase system, with no requirement that the bids be used or sold, was a potential problem. Some affiliates were accumulating thousands of unused bids.
Q. - What is the company doing to address these issues?
A. - Each of these three main areas of concern have been fixed.
The matrix is now a 2X5 with matching bonuses instead of a 2X21. Simple qualifiers have been put into place that allow you to earn even more than before (because of our infinity bonuses). Qualifying for the matrix commissions is easy. The requirements are on the website so I won’t go into the full details here. MANY of our affiliates are already fully qualified.
Our product in ZeekRewards is VIP bids for the Zeekler Penny Auctions. That’s what we sell. Think about this: If you were representing a cosmetic company and you wanted to acquire retail customers how would you do it? It’s very likely that you would purchase a case or two of lipstick, eye shadow and liquid makeup. Then you would give those items away to prospective customers as “samples”. If the product was a good one then it is likely that some of those prospects would come back later and buy more from you!
Zeek Rewards is no different. We have always attracted retail customers (bidders) by giving away sample bids. What we are about to do now that is different is that we are expanding that bid giveaway by inviting our affiliates to participate. We will be enabling YOU to give bids to your retail customers as samples. By tying your VIP Profit Pool Points to the bids you give away instead of to the bids you purchase, we solve a number of problems.
First, ZeekRewards can no longer be viewed as a “passive investment” since our profit sharing model is truly based on customer acquisition. Second, the “front-loading” or “garage-qualifying” element is eliminated because you will be giving away bids that you purchased as samples to attract customers, not just sitting on them and letting them accumulate. And Third, but VERY IMPORTANT, using your bids as samples to attract customers creates a potential tax deductible advertising expense. I’m not a tax lawyer, so consult with your own advisor about that issue, but that could be HUGE!
This is a bit “out of order”, but some of these points overlap. Eliminating the 125% cap on profit sharing also accomplishes a couple of important results. First, it prevents anyone from accusing the company of paying a fixed “return on investment”. That is NOT what we do, but it is important that we remove any appearance that we are doing that! Second it gives you a raise! Based on the current rate of daily rewards you should earn substantially more in daily rewards over the 90 days, based on 100% repurchase, than you have earned using the 125% cap.
Q. - Okay, that sounds simple enough, but how is all of this being implemented and how will it change what affiliates have to do to earn in Zeek Rewards?
A. - Good question! I’m glad I asked it (smile).
Actually, in spite of the rumors and worries that a few affiliates have shared with me, there will actually be very little change in the way you earn money. Let me regress just a moment to clarify something that needs to be clear.
Some affiliates, it seems, do not understand the difference in “bids” and “points”. Let’s get that perfectly understood and the rest will be easy. Purchasing a bid is no different from purchasing anything else. If you purchase a burger at McDonalds you give the guy at the counter some money and he gives you a burger. Then, you own the burger and the store owns the money. You didn’t “invest” in a burger expecting to get a return. You just bought a burger. You get to eat it or give it to someone else to eat.
When you purchase bids it’s no different. You own the bids and the company owns the money you spent. You did not make an “investment”. You just bought a bid that you can spend in the auction or give to someone else to spend in the auction.
In the past, up until now, affiliates purchased VIP bids for US $1.00 each. Because you purchased that bid the company gave you a POINT in the VIP Profit Sharing pool. Each bid you purchased gave you another point in the pool. 100 bids purchased gave you 100 points in the pool. If you spent the bids in the auctions your points were not affected. Each point you had entitled you to $1.25 in daily rewards. once the points had been paid $1.25 each they would retire and stop earning more rewards.
Here’s how it will be different doing forward:
Instead of getting a VIP Profit Pool Point every time you purchase a bid, you will now get a VIP Profit Pool Point every time you purchase a bid and GIVE IT AWAY to a prospective retail customer. That’s one very simple additional step. I’ll show you just HOW simple it is in a minute.
Instead of seeing the points “retire” when you have been paid $1.25 in daily awards, you will see the point remain valid and earn awards for a full 90 days as long as you place your ad every day just as you are already doing. This will result, as I said earlier, in a substantial earning increase for most of our affiliates!
Q. – How do these enhancements affect bids that I have already purchased and points that I already have in my VIP Profit Pool? How will these enhancements affect my bonus points?
A. - The changes have very little impact on what you already have. The main immediate effect will be that the points you have in your pool that have been paid 125% but have not yet been removed, will be dropping off so that we can switch the remaining points to the new system. If your VIP Bid Repurchase Preference is set to anything less than 100% repurchase you will not see any immediate difference at all. Affiliates who have kept their setting at 100% will see all retired points drop off. Don’t be shocked when this happens. It is simply clearing away some “dead wood” that was creating an artificially inflated number. We permitted the points to remain in place beyond their retirement to give you a little faster way to grow your balance. Under the new system that will not be done, so you will always have an accurate picture of what your balance really is.
Points that you already have are “grandfathered” and you do not have to give the bids that created them away if you don’t want to do so because those have already received their points. You may choose to give some or all of them away as samples, however, to help grow your business. See your tax advisor about the possibilities there as well!
Let me first address how Bonus Points will convert to the new system. Bonus points will earn for a period of 60 days. Any bonus points that have only partially reached their earning cap of 125%, any earnings to date will automatically transfer on August 15th to your VIP Points Balance and any remaining bonus points that have not yet reached their cap will move to a 60 day earning calendar on Monday and begin earning for the full 60 days. After the full 60 days, whatever you have earned on the days you have advertised, the points you earned will then transfer over to your VIP Points Balance. Let me give you this example: If you were awarded a bonus of 100 bonus points at the time you registered and in the past few weeks you earned 30 points on that 100 bonus point award, on Monday the 30 points you earned for advertising will transfer to your VIP Points balance and the 70 bonus points left will move to the 60 day earning calendar. At the end of the 60 days (from August 15th) whatever additional VIP points you have earned from the left over 70 bonus points, will move to your VIP Points balance.
Now, switching the VIP points you already have to the 90 day calendar will work very similiarly except they will earn for a full 90 days instead of 60 days like the Bonus points do. The 90 day calendar will begin on Monday, August 15th. Any unexpired points that have not yet earned their 125% cap will be converted to this system. If you bought 1000 bids that created 1000 points on Jun 30th, for example, and 300 of those points reached their earning cap and retired. The 700 points that have not yet earned anything, would begin their 90 days on August 15th and would earn daily awards every day that you advertise and submit your ad into your back office. Any bids purchased today, that generate points under the existing system, will earn daily awards for 90 days from Monday August 15th and from their date of the points being posted to your VIP Points balance from that point forward. So, if you buy bids on August 23rd and you give them to a new customer on August 25th, your points will be awarded to your VIP Points balance on August 25th and you will earn awards for 90 days from August 25th. It should be MUCH simpler to track the points that are still active and when they will retire and be removed. Going forward, the points you will be receiving when you give away VIP bids will have a 90 day life based on when you received the points. Truly simple and much more understandable.
Q. – How else may I earn points in the Retail Profit Pool (RPP)?
A. - This is exciting! Starting on August 22nd, in addition to earning points for giving away bids you have purchased, you also earn points for the full dollar value of all retail bids purchased by your personally sponsored Zeekler.com customers. For example, you introduce someone to Zeekler.com to whom you give a sample of 50 free bids. They love the auctions and decide to buy a 100 bid pack for $65. You will immediately receive $13 (20%) commission PLUS you will receive a FULL 65 Points to you VIP Points balance. You can see from this, the more customers you introduce to Zeekler, the faster your balance can grow!
Q. – So, who will affiliates be giving bids to? Where will these customers come from and what if an affiliate doesn’t HAVE any customers yet?
A. – Most of our affiliates are extremely excited about the bid-give program and see it as the most exciting part of the new pay plan. They see how this is going to explode their business and some of them are already seeing people scrambling to get in line for free bids. Penny Auctions are one of the hottest business models in the world right now and giving away free bids in large quantities is going to make Zeekler grow like crazy.
There are a few affiliates, however, who are a bit like Chicken Little. They are running around yelling “the sky is falling, the sky is falling” because we are talking about giving away bids. Instead of seeing the opportunity that this creates for them to literally explode their income, they see the extra step as a huge, impossible mountain!
Two things to consider. First, I believe that ANYONE can call Aunt Sally or co-worker Bob or the waiter at the local diner and say, “Hey! I get paid to give away bids to the Zeekler Penny Auction. They want people to try the auction out and see how much fun it is to win great stuff for really low prices. Will you let me sign you up so I can give you some free bids?” Almost EVERYONE will say yes to that and you have your customers to give bids to.
For those affiliates who, for whatever reason, simply can’t find any customers at all, we have already put a customer acquisition co-op in place that will let you “buy” customers. In other words, we’re advertising and promoting Zeekler and sharing the customers with our affiliates for a small fee to cover some of the cost of advertising. Of course, every affiliate should certainly be sharing Zeekler with everyone they know and not depending on the company to do ALL of the work for you. This is called “network” marketing and some work is expected. It’s not that hard. It’s really fun work.
Let’s all pull together to get the word out that ZeekRewards is on fire and is now poised for the most exciting future imaginable!
We are making the changes that will assure long term survival and viability. I am totally committed to each of you and to keeping everything 100% compliant and VERY profitable for you.
I’m sure there are other questions that I have not addressed in this letter, but these are the main points I wanted to be sure you understood. I’ll send out another letter next week with more details.
Mainly, I just want you to understand that the sky is NOT falling, Rex Venture Group is in great shape, this past week broke all company records, and the future is VERY bright. Grab your shades and let’s go there together!
To you MASSIVE success,
Paul Burks, Owner and CEO
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