Need Inspiration? Try Dovgans Tapes

Vladimir Dovgan, the flamboyantly buoyant entrepreneur, is lurching into a new project: selling inspirational and self-improvement audio recordings via an army of fanaticized recruits.

Dovgan made his fame by putting his own face on bottles of everything from ketchup to glue, supposedly as a mark of quality. Eventually he was squeezed out of his own company or bought out, depending on who is telling the story and lost the rights to his own beaming, tuxedoed image, which even today stares down from thousands of vodka bottles across Russia.

Since then, Dovgan has dabbled in a bit of everything, including politics. Now he is in the business of recording the advice of doctors and psychologists and, of course, of Dovgan on themes such as "How to Get a Better Figure" or "How to Quit Smoking."

Those inspiring messages will be sold via a system known as network marketing, or multilevel marketing. MLM companies build loyal armies of salespeople, or "distributors," who buy goods from the parent company, then sell them usually to other salespeople they have recruited. Those new sales people in turn recruit and sell to even more sales -people, and so on indefinitely.

The worlds largest MLM concern is the U.S. company Amway, with millions of salespeople. In Russia, a better-known MLM company is another American import, Herbalife.

Amway sells everything from water purifiers to cosmetics, while Herbalife is more narrowly focused on dietary supplements and weight-loss products.

MLM companies have been criticized as too aggressive in their chain-letter sales tactics. They have also been called pyramid schemes that make victims of their enormous staffs of buyer-sellers or even as cults who manipulate and brainwash those people.

But for Dovgan, the aggressive sale is a thing of beauty. His Vladimir Dovgan Service employs 3,000 people today, and Dovgan hopes to triple that to 10,000 by the end of the year. Many of his salespeople have come from Herbalifes Russia operation.

"These are radiant, charismatic people. They work 12 to 13 hours a day. They are amazingly fanatical," Dovgan said of the Herbalife salespeople he has taken on. In this, he said, they differ from 90 percent of the population, who are "pen-pushers by nature."

Herbalife and other MLMers have "opened up a new world" for Dovgan. In the spring he launched a blitzkrieg television advertising campaign Dovgan said it cost $500,000 to attract recruits to two new MLM companies, the Vladimir Dovgan Service and the Vladimir Dovgan School.

The service will promote herbal medicines from a biological factory in Kursk, while the school will push "personality development methods" on audiotape and CD.

Dovgan has recorded 16 such tapes. The first half of each consists of a consultation with a specialist, while the second plays soothing music with a voice-over by Dovgan and an actress.

The "How to Conceive the Child You Want" audio, for example, comes on two CDs. On the first, Dovgan chats with Professor Vera Sidelnikova, a top doctor with the Russian Academy of Sciences Center for Obstetrics, Gynecology and Prenatal Care.

The second is simply two voices, one male and one female, repeating at 20-second intervals the words "tenderness, love, desire."

The doctors themselves dont earn much for their pains. Marina Bezrukikh, director of the Institute of Physiology at the Russian Education Academy, said that she was paid a "joke of a fee" for recording two CDs with Dovgan, "Your Child the Young Pupil." Bezrukikh said she had decided to participate in the project because it seemed interesting and important.

The self-help recordings were originally to retail for $5. But Dovgan said he quickly realized that his products would not be taken seriously at such a bargain, and prices were hiked to $25 and then to $40.

Dovgan also organizes MLM training for would-be sales people, and also for those who are simply curious. Entry to such training is 100 rubles ($3.60) for the potential recruit and $50 for everyone else. Training videos for would-be sales people, due to appear at the start of next year, will cost around $100, Dovgan said.

Dovgan says he could have asked for $300 or $400 for training, but he decided that it was "still early for this."

As of October, turnover at the Vladimir Dovgan Service was $400,000 and at the school $100,000, Dovgan said. He added that sales are soaring increasing at a rate of 30 percent to 45 percent per month.

Television advertising for the training classes first began to air last week. One session features Dovgans friend Anatoly Klimin the founder of the Tom Klaim clothing line and another recent convert to MLM. Klimin plans to build an army of MLM recruits to push his new collection of Tom Klaim tights.