is there a better way survey results

Is There A Better Way? 2 0 1 3 R E S U L T S

Is There A Better Way?

In April 2013 we issued a survey entitled ‘Is There a Better Way?’ We asked four different questions that

we hoped would reveal ‘a better way’ to find good quality distributors to represent our new energy saving

product line. The number of responses we received was overwhelming. But perhaps even more unexpected

was the willingness of respondents to spend their valuable time contributing detailed, constructive and

insightful comments on how we might improve our offering. We want to thank all who responded for your

valuable feedback. We’ve done our best to listen and respond to your suggestions by significantly revising

our distributor opportunity, which you can read about in detail in our new Prospectus: http://enigindocs.com/

files/7qqfcw. We believe our new approach will be better for Enigin, better for you and most importantly better

for our customers.

The results of the survey are presented below, along with a brief summary of how we have responded to this

feedback. We have also included a small selection of comments from respondents:

1. Do you think requiring a License Fee is the best strategy for finding good quality distributors?

We received the following feedback:

Is There A Better Way? > Knowledge Base

No

Yes84%

16%

Enigin Response:

We will no longer charge a license fee to become a distributor of our products.

It is interesting to note that most respondents agreed that a form of commitment is appropriate, but believed

it should be based on products not fees. What’s more, it seems many view fees with suspicion, which sadly

detracts from our core goal to make great products that save energy for our customers. For more details on

our new approach, download our Prospectus here: http://enigindocs.com/files/7qqfcw

http://enigindocs.com/files/7qqfcw



Nizam: First of all let me congratulate you for the good move and decision you made to review

your strategy. I really believe that the high licence fee was a big barrier to real success. I think

you have done what was right for your company at the time you started the business. Now

things has changed. You should have different options tailor-made according to the business

plan of the new applicant.

Bile: Many energy professionals are qualified to promote and sell Enigin products but

distributors fee has been a hindrance.

Pascal: I think requiring a License Fee is good for the simple reason that Enigin Plc. has to cover

its high investments.

Peter: I have found when selling franchise licences, in the past, the person looks for everything

done for them will little effort on their part and constant complaint. Would not a probation

period be more suitable then perhaps implement a licence fee for the successful Traders to

carry on.

Tony: A quality distributor is not always the one with the most money in his pocket. You cannot

always buy your way.

Trini: Upfront fees are a bit of a turn off. I was so impressed with your products and the solution

as a whole, but when it came to paying cash in order for us to continue with the relationship I

had my second thoughts.

Timothy: Requiring an upfront fee under the pretext of eliminating “unsuitable” candidates is

both illogical and self-defeating. Candidates should not be viewed as a customer but rather as

a partner.


Dennis: I would rather spend 100,000 dollars to develop my clients than a franchise fee upfront.

Jose: I fully agree with the requirement of a License Fee. It is fair enough to charge a down

payment but I suggest you to review its initial value (to a lower amount) and link subsequent

payments to the development of sound and effective relationship and evidence of progress of

the Distributor.

Eric: I was interested in the Enigin product but the Licensing Fee was prohibitive in many

respects. I believe the key for Enigin is to find partners/distributors who believe in the product

and provide the necessary means by which these “champions” can profit from bringing it to

market

We invited you to make your own comments. Here is a selection:

2. If there was no License Fee, what do you think would be a fair minimum requirement for product purchases in the first year of a distribution agreement?


Roberto: My opinion is that you could have 2 or 3 partner programs with different discounts

based on the amount/quantity purchased by the partner.

Cole: Implementing a minimum purchase amount will weed out “tire kickers”. If someone

is willing to risk capital to purchase product, they believe in their abilities to thrive and be

successful and are committed to the business. However, an arbitrary “privilege fee” smacks of

“scam”.

Wayne: Any upfront license fee puts additional cash flow pressure on a new distributor. It would

be better to set a minimum stock purchase for year 1, 2 and 3 and suggest the minimum cash-

on-hand required to support a new business. New businesses often fail because entrepreneurs

underestimate the cash flow requirements to support a new growing business.

David: There’s a cost to everything! So YES, I believe that Enigin should place a value on the

products/services offered to new entrants...and yes entrants must be in a position (financially) to

meet these demands. What you may consider is to tier your entrance packages.

Chia: I think it is important to have some form of commitment and security to be a licensee for

Enigin, However, I would also like to emphasize that it is important for there to be an amicable

negotiations on the quantum required for the security and commitment.

Bob: My answer would be to ask over two years in which case it would be most likely 80K year

one due to training and learning the “trade”. Then probably a minimum of 150K year 2 and over

250K beyond.



GBP £15,000

GBP £20,000

GBP £40,000

GBP £80,000

GBP £150,000

GBP £250,000

59%19%

13%

6%2%

1%

Enigin Response:

We will now offer three Distributor entry levels.

Many respondents made the point that ‘one-size doesn’t fit all’ so our three options will carry a different

initial commitment to product and a different discount structure. The initial commitment to product will start

at £12,000 and discounts will range from 30-80% off MRSP. Many individuals stressed the need for flexibility

because of the variances across different territories so a Distributor will be able to choose their mix of

products and negotiate ongoing targets based on their location and circumstances. For more details on the

three levels, download our Prospectus here:



Pete: Distributor fee’s help keep the business name you have built stable, recognizable and in

your control so asking for these fee’s in the manor you have done is not a bad strategy - but

remember Americans usually want something for nothing which leads to 90 percent of your

prospective individual distributors worthless. I am unsure of your margin base but I would

thing a minimum of 80k GBP would have to be a base line for it to be of value to you and the

distributor.

Vaughan: There needs to be some agreed target that needs to be hit to keep a territory etc. I

believe the carrot is better than the whip... but the shadow of the whip does also make for a very

strong carrot!

Asraf: Let them try for a year. If they don’t get the minimum sales offer them training or

terminate their contract

Jose: People like myself who make this their career and who have left other opportunities

because of our strong belief in the energy saving industry are the people who in my opinion are

worth more than an initial License Fee. I know spending $40,000 in Enigin is worth it, but maybe

it should be allocated more towards product, training, and support so that the new distributor

can also have money left to spend on marketing, hiring staff, training of staff etc.


3. Is it appropriate to ask for evidence of a potential distributor’s financial status, aptitude, resources and proven business experience before entering into a long-term agreement?



Paul: When entering into a professional relationship, some due diligence is necessary, at least

for reputational risk purposes, so asking for evidence of a distributors ability to sell and service

clients is appropriate, however one size does not necessarily fit all, especially in new markets.

Roger: It would be wise if Enigin PLC will give a 6 month probation period during which it can

assess if the Distributor can deliver desired results before giving the License which can be

renewed after every two years of satisfactory performance.

Josip: It is appropriate to know who you are dealing with.

Vaughn: I believe that your filtering system should be able to weed out those that have no

aptitude for the business. Obviously there is no guarantee, but your filtering out process should

not be so burdensome that it puts off those that would likely be fantastic distributors.

Vlatko: Way should I tell You My financial status did I know Your financial status?


Yes

No68%

32%

Enigin Response:

We will be introducing a more stringent application process, but there will still be opportunities for start-ups.

Many respondents rightly suggested that successful Distributors provide a good template of what to look

for in a suitable candidate. Clean-tech and business-to-business experience features prominently among our

successful partners, so this will be placed higher on our criteria. However, there was an opinion split regarding

high-risk candidates. Perhaps, we should have used the phrase ‘higher-risk’ candidates. We agree with many of

you that ‘high-risk’ candidates should not be considered. However, as many others of you pointed out, we all

need to start somewhere. If a candidate can demonstrate a strong mix of skills, desire and professionalism we

agree they should be considered even if this will be their first business. For more details on our new approach

download our Prospectus here: http://enigindocs.com/files/7qqfcw


Jerry: It is appropriate to ask evidence of business track records, but it should not be a

requirement. Some people are starters and others have made mistakes in their previous

business conducts. Now they return with aim to success and to have learned from the previous

mistakes.

Rodrigo: Asking for financial or business experience evidence is not really truthful of what

someone is really capable of doing.

Joseph: Yes, it is absolutely appropriate to ask and know these evidences including one’s

attitude, reliability and availability to market the products.

Rui: Any business has risks, and with crisis in the Economy they are even higher. So, in my view

sharing the risk with the candidates is the key, and that means lowering the fees...and maybe,

research a little more about candidates, ask for credible and validatable referrals, place specific

goals and targets for them to do in a reasonable timeframe, and thus do your own evaluation of

the candidate over time. That’s what I’m doing with my clients and with good results.

Raja: I think that the selection criteria should focus on the capability and skills of intending

distributor. However financial soundness should also be ascertained. Volume incentives based

on a formulae linked to the minimum product annual sales should be given.

Raimundo: Are you involved in education? If no, just discard those in hi-risk. I would rather

develop a scoring system, based on the information you have about your current distributors,

identify those characteristics that are common to successful or “good” distributors, those that

are common to failure or “bad “distributors, and go for that information when you have a new

applicant. With this you are going to create a base of distributors that perform according to

what you define is “good”. This is a statistical modelling that maybe could work for you.


4. If the request for evidence reveals the applicant to be a high-risk candidate with a limited business track record, what would be an appropriate charge for the extensive additional training, support and infrastructure that would be required to help mitigate the high chance of failure?



Alex: If you think a candidate is high-risk or with limited business track record you should

discard this candidate right off the bat, it doesn’t make any sense to charge for extra training.

You will be polishing an old beat up VW beetle. It would be a much better investment of your

time to just wash a Ferrari.

Sanjeeve: Everyone has great potential. There is no high risk candidate. There is only failure of

adapting and understanding that candidate’s capacities and help him/her perform better. It’s

all in individualized training.

George: The answer to the last question will depend on how experienced the entrepreneur

is in this industry. Someone with little business experience (but with available capital and

willingness to learn) will need more training and support = higher fees. In my opinion, a £15K

licence fee + initial & ongoing training fees would be an ideal solution.

Caroline: Charge may have to vary and be targeted to the level of training needed.


GBP £3,000

GBP £5,000

GBP £10,000

GBP £20,000

66%19%

9%6%

Enigin Response:

Higher-risk candidates that meet our revised criteria will be required to enrol in our MINDSHARE start-up

training and support programme.

We agree with many of you that training and support should be provided free of charge, and it will be.

However, many respondents agreed that ‘extra’ training and support for what we will now refer to as

higher-risk candidates should be charged on the basis of how much support is required/given. Unlike existing

business owners, start-ups have zero momentum and typically require more fundamental business training

i.e. financial planning, setting up a website, marketing the business, refining a business model etc. We have

created a programme for that very purpose, MINDSHARE. While it will be optional for existing business

owners, for start-ups it will be mandatory (though minimum sales will be waived for six months). We believe

MINDSHARE will give that new business owner everything they need to get to profitable trading in the shortest

possible time. The basic MINDSHARE training and support package will cost £3750 and includes 10 critical

components. You can examine the programme in detail by downloading our Prospectus here:



Antonio: Great questions! High-risk candidate could be a huge challenge. It needs to be

addressed on case-by-case basis.

Daniel: If too high risk, don’t recruit. If they have gaps in their experience/skills, then agree up

front the specific additional support required and charge them the real cost of this. The amount

charged should vary depending on how much support is required. I imagine it could easily be at

the top end of the scale above.

John: High-risk candidates create high-risk problems and damage the brand. If there is a

perceived chance of failure, why go down that road and waste time that could be spent with

more productive clients.

Kenneth: If the applicant is a high-risk candidate, then the process should not proceed.

Gerard: The extent of the cost would really be directly related to the extent of training etc. that

would be required for the particular individual.

Barry: I personally would reject a high risk candidate with a limited business track record. If the

vision and experience is lacking at the outset, I believe that training, support etc is not likely to

bring about a successful outcome.

Victor: Honestly I disagree that the only distributor that can succeed is the one that has

business experience! Its good but what about new entrants to the business? There is always the

first time. They too should be given the opportunity to prove themselves.

George D: I think it is better to negotiate it case by case based on specifics.

Diana: I think entering into a high-risk candidate proposition is management discretion

depending also on the background of the potential candidate.


Other things we are changing thanks to your feedback:

Sample Packs

Enigin Response:

Interested parties will now be able to purchase a sample pack of products in advance of making an application

to become a distributor.


Enrique: Proving a product like yours is the key to successful selling. In such case, I would start

first with demo unit before ordering any requirements.

Lincoln: Your above questions put all the emphasis on the distributor and you do not seem to

be putting anything on yourself. One of my biggest concerns when I tried in the past to work

with you, was getting equipment form you to do my own field testing. I am not willing to risk

selling anything to my customers that I am not sure is going to perform as specified, as I run the

risk of destroying my present business and losing my customers. You refused to let me have at

any cost products that would allow me to do field testing. One then asks the following question;

if you have nothing to hide, then why don’t you allow me to do my own independent field

testing?

Shitalkumar: There should be NO license fee. In the initial stages, ask interested party to

purchase sample piece. Make the survey in the local market, see the live and practical results

of the product. Once party is satisfied, then definitely ask for License Fee. Total Distributor

agreement should be in some steps so that it should be win-win for both that is you and

interested party.

Imad: All we need is samples for your products plus the certificates of performance to set a

presentation and experiments to the government’s organizations to get approval for this issue

Felipe: We already did some installations of your products and we name it as a great

technology in doing energy saving business.

Hassett: Every effort should be made to encourage facilitate support a monitored pilot project

after which informed decisions could be made based on empirical data


Affiliate Opportunity

Enigin Response:

We will shortly be releasing a new affiliate program, which will provide interested parties with a very low cost

method of entering this rapidly expanding and highly rewarding sector.


Arman: You have a superb product but the requirements for a distributor is so high and risky

on the part of a potential distributor. The criteria that were imposed by the company were

also valid for security purposes. Therefore, I would recommend that the criteria would not be

changed. Instead, open a position for Sales Representative that would sell the product and

scout a potential Distributor in every country.

Nestor: To exponentially increase your market reach, thus increase sales, you would need to

tap into the talents of entrepreneurs who are starting up. Some will succeed others will fail.

For those that shows promise you can opt to increase support to boost performance. A reseller

network under a distributor umbrella could be helpful.

Patrick: There’s a lot to be said for people who have great contacts and possibilities, yet, little

financial freedom to invest in something that they believe in. As I realize the potential, and

have many contacts through my business dealings, any other form of opportunity to embark on

what seems to be a solid idea would be more than welcome.

Eric: I think ENIGIN should put in place mechanisms, which will ensure that all potential

distributors who do not have extensive business track record but who are willing to do business

the ENIGIN way are not left out.

Fredrick: you should also consider individual salesmen or agents who do not have the required

finances to start up business but are capable of reaching out to potential customers on a one

on one basis and persuade them to purchase your products.

Keith: How about using someone on a self employed commission only basis for an initial period,

say six months. If you covered the training costs then by paying a commission rate of say 10%

then I assume that you could easily recoup those costs from sales. After the trial period both

parties could consider whether to place things on a more permanent basis.

Frederick M: it is unfortunate that capital, experience determination and will power does not

always come in one package. I find myself with lots of some but little of the others.

Lou: I would advise that you give a thought to the NEW business starters, the SMEs , those young

intelligent people who are freshly embarking in the business world, who have brilliant ideas

but due to lack of funds or capital can’t proceed with their project.

Elizabeth: My hope is to sell on a commission basis until I can afford my own district

distribution.


Enigin PLC © copyright 2013.

EN329 | Issue no 2 | Effective date 04/07/2013

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