MIRROR, MIRROR ON THE WALL...
THE AmeriPlan® STORY: HOW TWO BOYS FROM RURAL TEXAS CREATED A NETWORK MARKETING GIANT
John David Mann For Network Marketing Lifestyles Magazine (July 2001 issue)
Duplication ... it's the Holy Grail of network marketers-and it had Dennis and Daniel Bloom stumped. The two men knew, beyond the shadow of any conceivable doubt, that they had a great product. What's more, they had a great product at a great value, with a huge potential market. But they were facing that duplication hurdle.
"We had just two brokers representing our business - ourselves," explains Dennis. "Daniel and I were great at marketing our dental benefits service here in the Dallas/Fort Worth area, and we knew we had the makings of a national, multi-million dollar company. We just didn't know how to take it there." "What we realized," Daniel chimes in, "is that we couldn't duplicate ourselves."
Ironic he should put it that way. The truth is, he and Dennis, co-founders of AmeriPlan®, the Dallas-based network marketers of a comprehensive health program, have been duplicating each other extraordinarily well - ever since birth. They are identical twins.
No, strike that - they look identical, but they're not. They're not non-identical either.
"Most people think there are only two types of twins: identical and non-identical, or fraternal," Dennis explains. "But there is a third type, called identical mirror twins. That's what Daniel and I are."
Daniel continues: "The way you can tell is, one is predominately left-handed, the other is right-handed; Dennis is a lefty, I'm a righty. When you look in the mirror, what happens when you raise your right hand? The person in the mirror looks exactly like you - only he raises his left hand. For me, that's Dennis in that mirror."
The Bloom brothers let loose with a patter of mirror-twin lore.
"When I was a baby," Says Daniel, "my finger got caught in a door; it cut off the tip of my ring finger on my right hand. Also as a baby, Dennis got the tip of his ring finger cut off in an old-fashioned ice box - the ring finger on his left hand."
"That's not all," Dennis picks it up without missing a beat. "I have a tooth missing on the left side; Daniel has the same tooth missing on his right side." Daniel picks it back up again, and now it gets a little spooky.
"... A few months ago, we both went in and had MRI's done. Turns out, I have a little blister on my right kidney - and Dennis has a little blister in the same spot on his left kidney." He pauses for effect, and then delivers the punch line. "It's real comforting to know you have spare parts walking around. For that matter, if one of us ever committed a crime and they tried to prove it with DNA, we'd have a walking, talking, foolproof alibi."
The Two Hands of Leadership
Does the mirror-twin dynamic extend to how they conduct business? Absolutely - in fact, according to Dale Brooks, AmeriPlan's National Sales Trainer and one of their first brokers, it is key to the company's success.
"Of course, they are alike," says Dale, "but psychologically, they are totally different people. Daniel is business-oriented; he's the get-in-there, run-the-administration type. Dennis is just the opposite. His language is not so much business and numbers; it is working with people, motivating, speaking. When they have a goal, Dennis is the one who creates the vision; he can communicate to people what it looks like before it's even there. Daniel is the one who puts numbers to it and makes it real."
It's not just that they compliment one another, says Dale: they also serve as a perfect set of mutual checks and balances.
"A business started by one person alone takes on the personality of that person - and his foibles too. Dennis and Daniel balance each other. Sometimes they argue, and it's a beautiful thing to watch: they always come up with the best solution, one where both the corporation and the field benefit - because they've got both those perspectives on every single decision."
The brothers agree.
"Dennis is our CEO and Chairman of the Board; he handles all marketing for the company," explains Daniel. "I am president and COO; I handle all operations and administration. We've given ourselves these roles based upon our talents, which are like mirror images of each other, and with this division of labor, we use both our strengths best."
We learned that early on," agrees Dennis," and we've always worked together like this, in everything we've done." Which, as we soon learn, is a good deal.
The two 58-year-olds have come a long way from their childhood, growing up in an impossibly tiny town in the middle of Nowhere, Texas (actually it was called Brownwood). "Dennis and I were raised primarily by our grandparents," recalls Daniel. "In those days, your word was your bond; a handshake really meant something. That's the way we were raised, and that's the way we've lived all our lives. In all our businesses, we have always had that reputation: if we tell 'em it's gonna rain, they can put out their bucket."
"Our grandfather was in the moving business; this was in the days before Allied or United or Bekins - and before there were any modern conveniences, either..." Here Dennis picks up the story's thread.
"He had a freight wagon powered by a team of horses. One day he drove that horse-and-freight wagon from Brownwood to San Angelo and traded it for a model T truck. There was no road between the two towns - so he taught himself how to drive on a cow trail all the way back to Brownwood."
This occurs to us as an apt metaphor: the Bloom boys have been taking new vehicles over uncharted trails ever since.
"Daniel and I have always been entrepreneurs; we've always tried to find a market niche that is being under-served. When we were 16, we noticed there was a Conoco station that'd closed down. We wanted to run that gas station - two 16-year-old boys. We pitched the owner, and he let us do it." He grins. "We did pretty good, too - only problem was, it became the local hangout for all the teenagers in town, and they ran off all our regular customers."
In the early 70's, the brothers explain, when Jimmy Carter deregulated the professions, doctors, lawyers, and CPA's were suddenly allowed to advertise. Could this be an opportunity niche? They formed a company that served as marketing department for hundreds of independent CPA's in the Dallas/FW area.
The Seeds of AmeriPlan®
As their CPA customer base grew, the Blooms wanted to be able to provide them with one-stop shopping, offering hospitalization, life insurance, mutual funds - whatever they needed.
"If they'd wanted us to wash their car, we'd have done that too," points out Dennis. Soon they started getting requests for a good dental program that independents could afford.
Recalls Dennis, "We learned there were three sorts of programs: dental insurance, DHMO's, and a third, called a discounted fee-for-service provider access organization (PAO). This third type got our interest. It's not considered insurance - which made things a lot easier for us. Even better, it offered our clients far and away the best value for the dollar."
The two men flew to San Antonio to visit the largest discounted fee-for-service PAO company they could find. The firm said they would give the brothers ten percent of whatever they sold for one year.
We thanked them graciously, flew back to Dallas, and said, 'Hey, this is not brain surgery! Let's put our own PAO program together.' We hired some dentists as technical advisors, and they put together a perfectly balanced fee-for-services schedule: discounted enough to be a tremendous value to members, but not so discounted that our dentists couldn't make any money on it. We contracted with 30 dentists in the Dallas/Fort Worth area, and Voila! We were in the dental benefits business."
Their CPA customers loved the program ... and so did their customers - The CPA's were bringing them referrals! Dennis and Daniel soon realized they were making more money from their little $15-per-month dental program than from everything else they were doing.
Now they knew they had found their niche. They sold their CPA services company and in November 1992 formally incorporated AmeriPlan® to market their own dental program.
That's when they ran headlong into the challenge of duplication.
The Duplication Conundrum
"Our plan was to take it national," recounts Dennis, "but we needed a marketing strategy. We had only two salesmen - us - and there was no limit to how far we could go."
The two tried everything: direct sales, telemarketing, newspaper advertising, couponing, everything they could think of. Nothing worked. They couldn't develop any major volume.
"Well," continues Dennis in his laconic drawl, "desperate men do desperate things. We had heard of multilevel marketing, of course - it was probably the one thing we hadn't tried. We didn't want anything to do with it. One day I said to Daniel, 'We ought to put aside our ignorance and bias for just a moment and do some real due diligence. Let's find out what multilevel marketing is all about.' "
"We started attending opportunity meetings. In Dallas, you could go to a different opportunity meeting every hour, 24 hours a day, seven days a week - and never run out. We must have attended 200 or 300 meetings. We came to two main conclusions. First: network marketing is the most dynamic marketing system ever devised by man. Second: network marketing is the most abused marketing system ever devised by man."
They set about to create a fair, solid program that would deliver on the promise of long-term, consistent residual income. By April they were ready to roll.
"That first year," says Daniel, "we did approximately $150,000 in sales. We started with two brokers: us. I sat down and made my list of 40 people, Dennis sat down and made his list of 40. We did it just the way we teach other people to do it."
To say that the two brothers launched their company from humble roots would be an understatement. Dale Brooks remembers the first time he went to lunch with Daniel, his new mentor.
"He was driving a Hyundai; the window on his side didn't work, and he had the panel of the door off so he could manually jack up the window. Here I am, following this dream of making $100,000 a year, and my mentor's hoisting up his Hyundai window by hand!"
Fast Forward. Today, AmeriPlan® is operating in all fifty states (except Alaska), Puerto Rico, and the U.S. Virgin Islands. They have over 50,000 brokers nationally and gross annual revenues of just over $55 million. To the original offering, they have added three other services - prescriptions, vision care, and chiropractic - and are now introducing veterinary care as well. Their services are offered by 30,000 contracted dentists, 50,000 contracted pharmacies, 12,000 eye care providers, and more than 7,500 chiropractors. With their corporate headquarters in one location and printing, distribution, and Customer Service in another, they are now building a new twenty one million dollar building to house the entire operation.
Where do they go from here? Daniel Bloom has the answer to that: "We have a corporate goal, which we share with all of our brokers at every convention: AmeriPlan® is going to be a billion dollar company by 2010,"
"The Right Thing to Do"
Daniel and Dennis attribute their company's success to the conservatism and solidarity of their program's principles.
"Too many companies in this industry are driven by recruiting: they're fueled by distributor-users - become a distributor so you can buy wholesale. In that model, when you lose your distributor, you lose your customer. All too often, the checks go up, then they go down - and now you have to go out and recruit new distributors. To create stable growth and solid volume, what you need are real customers."
"In AmeriPlan®, a full 80 percent of revenues come from members - people who have joined the program purely for the benefits of the program, not to sell the program. They are end users - in other words, customers. Theoretically, if all 55,000 of our brokers quit tomorrow, our revenues would go down 20 percent - but our profits would go through the ceiling because we wouldn't be paying commissions. We are a membership-driven, direct sales company - not a distributor-user type company. Once you build an organization here, it stays built. Our retention is about 95 percent."
Mark Jarvis, AmeriPlan's top earner, agrees: "There's no front-end loading here; every dollar of volume in this company is designed to be permanent volume. It comes in small increments but it's real - and it's renewable."
A customer base ... end users. What a concept. That's the way network marketing is supposed to work and that's what AmeriPlan® is in the process of doing; proving when you do what you say you do, the model works.
"The whole strength of it," Daniel adds, "is that we're selling something people value. Once you get the service, you use it; we have 100 percent satisfaction guaranteed. It's easy to see that you easily save more than the cost for the service. Why would anyone want to get out of it?"
According to AmeriPlan® broker Roger Campbell, a big part of the company's success is Dennis and Daniel themselves. Says Campbell, "Dennis and Daniel have never asked us to do anything that they themselves have not done first. They went out and hit the pavement; they went into offices, businesses, and homes; they sold this program. In fact, they did this personally for the first year or two themselves before they even brought on brokers. They know what it means. They know what it takes."
Dale Brooks agrees, "If Daniel and Dennis asked me to run through a brick wall, I'd do it first and then ask why. That's how much I trust their judgment."
He continues, "To take a company like this from zero to multiple millions, you need people running the company who can analyze a situation and make a decision quickly. Daniel and Dennis do that. Whenever something is going wrong, they immediately look at it, talk to a few people, and boom! They change it. Sometimes those are tough calls, but they have always been willing to make those tough calls."
One of those "tough calls" came last year, and it dramatically highlights the Blooms' commitment to their brokers. When they added chiropractic benefits to the program, they had to change all the company's sales and marketing materials.
"Every form, every brochure, every video, everything we had - it all had to change." Recalls Dennis. "Traditionally, in network marketing, when you change your material, the distributor has to eat a lot of material and buy all new stuff. Instead, we offered a dollar-for-dollar, piece-for-piece exchange to every one of our brokers. Some of that material was ordered five or six years ago - but we put no restrictions on the offer."
How much did the swap end up costing the company? A little over $9 million. Says Daniel simply, "We felt it was the right thing to do."Note: The contents above are a reproduction of an article published in the Network Marketing Lifestyles July 2001 issue.