Vector Marketing
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| Vector Marketing | |
 |
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| Type | Private |
|---|---|
| Founded | 1981 |
| Headquarters | Olean, New York |
| Industry | Marketing |
| Revenue | $180 million |
| Website | www.vectormarketing.com |
Vector Marketing is the sales arm of Alcas Corporation, the Olean, New York-based company that makes Cutco knives.
Salespeople, most of them college students and recent high school graduates, sell the knives to customers via in-home demonstrations. Vector recruits students through newspapers, Craigslist, direct marketing and posted advertisements especially on university and college campuses in the United States and Canada. Their flyers advertising purportedly high-paying "student work" are a common sight on many college campuses in the United States and Canada.
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[edit] Recruitment
Vector's marketing and recruitment practices are controversial. Vector has been accused and charged of misrepresenting its base pay rate, typically about $10.00 - $20.00 per appointment, as an hourly wage. However, time is required outside of the appointment itself to book the appointment and to travel.
Vector counts its salespeople as independent contractors. Legal overtime and training pay requirements do not apply to independent contractors, nor does the company provide benefits or liability protection.
Proponents of Vector argue that the company gives students valuable real-world business experience and job opportunities that are otherwise scarce for college students. Vector has contacts with various universities in the United States, including a Campus Relations Advisory Board consisting of professors from Louisiana State University, Boston College, University of Texas, Purdue University, University of Calgary, and Illinois State University. Illinois State University, for example, has a class available in which students intern at Vector and receive a grade partially based on their experiences. Purdue University has a similar class.
During the summer months, when a larger number of college students are typically looking for work, a typical Vector office will run five or more group interviews per week and will launch as many as two dozen new representatives per week.
Vector frequently holds regional and district conferences, which reps pay to attend.
[edit] Business Model
Sales reps are paid on a split system. Reps receive either a base salary per appointment or commission, depending on which is higher. Weekly commissions start at 10%, increasing in increments of 5%, up to a maximum of 30%. Monthly bonuses which can boost that figure to 50% are available for reps who consistently achieve at a high level. Commission levels are dependent upon career sales. However, a 1992 study of 940 Vector recruits in Wisconsin found that almost half either earned nothing or lost money working for Vector [1].
Vector is a member of the Direct Selling Association and the Better Business Bureau.
A promote-from-within policy means that Vector managers all began at the bottom as sales reps. Most Vector offices are managed by recent college graduates, and assistant managers are generally college students.
Over the summer of 2006, Vector also expanded to Puerto Rico with a branch office, to surmise whether or not it was a viable location for a full-time office. Currently, a program for "Vector International" is still in development.
[edit] Criticism
Vector Marketing's employment and sales tactics have been subject to criticism, with critics accusing the company of a variety of deceptive practices, including:
- Recruiting sales reps by presenting a per-appointment rate as an hourly rate[1]. Further, a rep who only achieves the base per-appointment rate will eventually be terminated, since he is costing the manager - who pays the base rate out of pocket - money.
- Presenting the position as requiring no telemarketing, when, in fact, the sales representative books appointments almost exclusively by telephoning strangers provided by previous customers as leads.
- Concealing the fact that the majority of trainees prove unsuccessful shortly after exhausting their network of direct acquaintences[2], thus mirroring some aspects of a pyramid scheme.
- Using an advertisement in sales demonstrations purporting to be from a competitor, Henckels, when in fact it is a Vector-created pseudo-ad.
- Exploiting customers' personal relationships by encouraging sales reps to claim they will fail financially if the customer does not provide many leads. This places an emotional burden on the customer; while she may not want to provide phone numbers of acquaintances, she feels she must help the (typically) young collegiate sales rep from failing.
- Creating a profitable Catch-22 with struggling sales reps. Struggling reps are encouraged to attend costly Vector sales conferences. Yet, if a rep does not want to spend money on conferences, the manager will claim that the rep does not want to improve, and is not committed to the team. If the rep continues to struggle after the conference, more conferences are suggested.
- Failing to even mention the considerable shipping costs and taxes to customers until after a sale is confirmed.
Vector was sued by the Arizona Attorney General in 1990, the Australian Competition and Consumer Commission in 1999, and was ordered by the state of Wisconsin not to deceive recruits in 1994. Each time their legal trouble revolved around allegedly fraudulent recruiting tactics, and each time Vector settled and promised not to mislead their recruits anymore. One of Vector Marketing's most known infamous incidents include telling their new employees that training is paid even though its not[3].
A group called Students Against Vector Exploitation (SAVE) has been created to oppose what they see as exploitation by Vector Marketing. [4]
Critical articles and websites that have been set up to discuss employee experiences with the Vector Marketing company include:
- The Cutco Complaints blog at Blogspot [5]
- A 2005 campaign to ban Vector from illegal recruitment at the University of British Columbia [6]
- Beth Bonady's investigation report published in the Pioneer Log of Lewis and Clark College [7]
- Alisha Gore's investigation report published in The Seahawk of UNC Wilmington [8]
In 2004, the Salem, Oregon Statesman Journal reported [9] that Vector had settled wage claims in Oregon, and it also reported that the attorney general's office was reviewing complaints.
