Herbalife Preferred Customer

Preferred customer is an e-material that helps new members make their first order and tells them about all the great benefits of membership. Preferred customers can also access ongoing personalised nutrition tips and expertise to help them reach their goals. They can even get a member pack, which includes a curated collection of Herbalife best-selling products.

It’s a bit of an odd distinction, given that Herbalife’s distributors and associates can buy products at the preferred-customer price—and then sell them to other people who become Herbalife members to earn a commission off their sales. But the company’s priority is generating revenue from products sold to non-members, and the preferred-customer program is one way to do it.

The idea behind the preferred-customer option is that it allows Herbalife to focus on recruiting customers rather than recruiting distributors who want to sell product and earn commissions. If it works, the company can separate its business model from the multilevel marketing scheme that landed BurnLounge in trouble with the federal government earlier this year.

But a preferred-customer option isn’t a magic bullet. It could work for a few years, and Herbalife can always revert to the standard compensation plan if it doesn’t generate enough revenue. But in the long run, it’s not a sustainable model. If the vast majority of Herbalife’s members are buying for themselves, they won’t generate much revenue for Herbalife unless they recruit a lot of other people—and that will be difficult in the current market climate.

During Herbalife’s Q3 earnings call, CEO Des Walsh made it sound as if the preferred-customer conversion would last for “a couple weeks.” That makes it easy to assume that these new customers were pre-existing Herbalife members who converted into preferred-customers because they wanted the product discounts and benefits.

To be a Herbalife preferred customer, you need to have a minimum product discount of 25%. You can earn this by purchasing Herbalife products and earning Points through your purchases and your referrals’ product purchases. Points can be redeemed for product purchases or towards the cost of your next Herbalife membership.

Herbalife’s preferred-customer offer is available in the US and India. But the company is focusing on India because it has 125 million English speakers—and that’s a much larger population than the US. But it’s possible that Herbalife will eventually expand the preferred-customer offering to other countries with large English-speaking populations.