On the June 23 episode of Martino TV, the paid-programming/news-magazine-style hybrid that debuted last month on KDVR/Fox 31 and KWGN/Channel 2, Tom Martino was hyping Efusjon, an energy drink made with the acai berry and other vitamins that also comes with "a business opportunity," he told his audience.
Martino's guest was Efusjon rep Loren Middag, who was hosting a party the next night where people could learn how they could become part of the Efusjon Energy Club. And on his KHOW radio show that afternoon, Martino devoted nearly forty minutes to Middag and Efusjon, calling the company an example of a legitimate multi-level marketing business that, unlike such outfits as Herbalife, doesn't need ploys or games to get people to show up for a presentation.
"You shouldn't have to trick people into listening to a presentation," said Martino, who built his reputation in the '80s and '90s as television's "Troubleshooter," a crusader who turned his camera on shady businessmen, scammers and delinquent landlords.These days, though, while Martino still positions himself as a consumer advocate, he's also paid by the companies he endorses. But he's up front about such deals, he insists.
"So I'm telling you straight up — and by the way, this is not a commercial," Martino told listeners who heard him praise Efusjon that day. "I'm telling you this because I've gotten over 350 people [who] are just crazy about this. Why? Because it's a great drink."
The website where listeners could RSVP for the party, www.efusjonmilehigh.com, features the heading "Personally endorsed by Tom Martino" and suggests that visitors "take advantage of the Tom Martino community — JOIN NOW!" And for several weeks before the June 24 event, a Twitter feed called "efusjon denver" had been excitedly describing the partnership between Martino and the drink. The author of the feed is Kelly O'Connor, an advisor with American Guaranty Financial, whose owner, Matt Klaess, is bankrolling the Efusjon events in Denver and plans to devote his entire office and staff to the effort for the next four months, O'Connor says.
Efusjon launched just ten months ago in Bend, Oregon, joining an already crowded field of multi-level marketing companies pushing juice/energy drinks with funky names like Zrii, Xango and Noni. Each relies on drinks with seemingly exotic ingredients and a similar "get healthy and get paid" sales pitch to enlist independent distributors. Denver has its own multi-level marketing company, XELR8, that's selling the wonder drink Bazi through a distributor-recruitment model. As reported in "Magic Potion" (May 20), that model relies on a sales pitch that essentially urges potential distributors to sign up four friends, who sign up four friends, who sign up four friends, until we're all rich and healthy.
That's because distributors earn compensation off the products purchased by people in their "downline." The more people who sign up, the bigger the checks collected by those early distributors.
As with Bazi and most of these other elixirs, Efusjon's promoters hope it proves as much a liquid asset as MonaVie, an acai-based juice that costs roughly $40 per bottle and recently logged more than one million distributors. But according to MonaVie's 2008 income disclosure statement, the majority of the roughly $1 billion it paid in compensation last year went to less than 1 percent of its distributors. Of the rest of the distributors, half ended up working for an average of 25 cents an hour.
Efusjon hasn't been around long enough for the company to have filed reports that would indicate how many distributors in the company actually end up making money. And while it's widely believed that MonaVie has hit a "plateau" of growth - making big-money earnings next to impossible for those entering late in the game - Efusjon distributors are being sold on the notion that getting in early could potentially translate to hundreds of thousands of dollars in commissions every month.
Efusjon also hopes to differentiate itself from other ventures by using social-networking technology to grow its rank of distributors, many of whom assert on web pages and YouTube videos that the company has teamed up with Mark Zuckerberg of Facebook to create an exclusive application for Efusjon that will soon stimulate "explosive growth." This buzz alone has inspired distributors to set up shop in new regions, in hopes of being at the top of their own Efusjon network. In a conference call to distributors on July 4, Middag claimed that 22,000 new distributors had signed up for Efusjon in a 24-hour period.
Klaess signed on for Colorado. The Efusjon spots on Martino TV were paid slots previously reserved for American Guaranty Financial. A longtime sponsor of the Troubleshooter's shows, Klaess has frequently been featured as an expert in real estate and finance. His various real estate and mortgage companies have long been a mainstay of Martino's pay-to-play endorsement website, www.referralist.com.