The ‘free dinners’ making Wenatex shareholder a motza

freshlyworded

Have you recently received an ‘Exclusive Dinner Invitation’ from a company called Wenatex in the letter box?

The letter says:

In order to satisfy the ever-increasing demand, we would like to invite you and your partner as our personal guests to one of our entertaining information evenings, which includes a wonderful dinner. While dining…we will inform you about current trends and new scientific research into the subject of healthy sleep…attending guests will receive a fantastic gift as an additional thank you.

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The Wenatex $50 mystery gift voucher

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Wenatex free dinner voucher

While reading this letter, my thoughts drifted to a hot day in Koh Samui in April 2010 and how my wife and I had been duped into giving up our afternoon in the hope we’d make some money for our back packing holiday. This is what I wrote in my journal:

Tuesday 6th April 2010: Chaweng Beach, Koh Samui:

“While walking back to our hotel room for an afternoon siesta, stopped by tanned English couple on motorbike. Gave us scratchy cards.  Surprise! We’d won a great prize – cash, laptop, camera or dream holiday Next thing, we found ourselves in a cab on our way to 90 minute timeshare presentation…

That afternoon, after the sales presentation (so boring, the memory of it is completely erased from my consciousness, but it must have happened as it’s in my travel journal) we were shown around expensive holiday resorts, given free cocktails and then subjected to the “hard sell” for timesharing that would have cost tens of thousands of dollars.

When the salespeople finally gave up, we received our prize: a voucher for a holiday at a resort in Thailand, not valid for immediate use. My guess is everyone gets that voucher. (A year ago I found it in an envelope among some travel mementos. It had long-expired.)

It struck me that the psychology behind the Wenatex dinner invitation is almost exactly the same as that used in Thailand. You think you’re getting something for free (a fancy meal + gift or expensive prize) but what you really get is a cheap meal and a long (4 hours according to one account) lecture on the science of sleep all designed to make you part with thousands of dollars.

Wenatex Australia has been offering their free dinners all over Australia and New Zealand since coming here in 2002 from their home base in Saltzburg, Austria.

Their high pressure selling techniques were reported on NZ current affairs show, Fair Go, which snuck cameras and two reporters into a Wenatex dinner and information evening. The video showed a lady giving the sales presentation and suggesting, outrageously, that a Wenatex sleep system had cured a man previously confined to a wheel chair.

For more of the flavour of these evenings, you can read comments on consumer forums here and here (My suspicion is that some of the more favourable reviews are written by Wenatex staff.)

You can also read this blogger’s account of attending a Wenatex free dinner in Canberra in 2013.

So just how successful is Wenatex at signing up customers at these free dinners?

The answer, emphatically, is: Very!

I obtained a copy of Wenatex Australia’s most recently filed annual accounts.

They show that for the 2007/2008 financial year the company earned a whopping $30.8 million (up 25% on the $24 million earned the previous year).

wenatex3Assuming an average spend of $10,000 for a Wenatex sleep system, that’s more than 3,000 customers who have been convinced to part ways with a big chunk of money on a supposed free night out.

Profit for the year was a shade over $2 million with the biggest expense – not surprisingly – being sales and marketing (those free dinners) which totalled nearly $9 million.

wenatex4Of the $2 million worth of after tax profit, nearly ($1.8 million) was paid to shareholders, which comprises a company called “Iways Pty Ltd”

There are four equal shareholders in Iways. They are Claude Wernicke, the CEO of Wenatex Australia, and presumably his sons –  Stephen, Michael and Justin Wernicke.

Split four ways, the Wernickes each took home $450,000 in 2007/2008, that on top of any salaries earned. And that was five years ago. Given their rate of growth, they could conceivably be earning $1 million each by now.

Carpet salesmen-origins

The Wenatex sales strategy and the Thailand scratchy card/time-share ploy are essentially sophisticated, dressed-up versions of what you’ll experience if you venture into a carpet shop or trinket store in Morocco, Egypt or India – where you will be offered free tea, and a tour of the factory “just to look” before the big sales pitch and relentless bargaining begins and previously very friendly shop owner turns less so. (In Essaouira, Morocco in 2010, my wife and I found ourselves having our photos taken dressed up in full traditional Bedouin costumes before having carpet after carpet thrown at our feet despite out protests.)

Of course – just as we did from that carpet shop, you can go along to the Wenatex dinner, stuff your belly, listen to their spiel and walk away – or buy (as some do)  a very expensive mattress.

I am not suggesting the Wenatex mattresses are not comfortable (they may even be superb), but unless you genuinely want to spend thousands of dollars for a mattress and accessories I’d suggest the following:

Tear up the Wenatex invitation, splash out a $100 of your own money and enjoy a guilt-free, relaxing, bona fide dining experience at a restaurant of your choice.

(And if you  DO need a new mattress, head to the shops and try out as many as you like.)

15 thoughts on “The ‘free dinners’ making Wenatex shareholder a motza”

  1. I remember the very first question of our Eco’s final exam at WBS was to explain what “There is no such thing as a free lunch” meant in economic terms…never understood the value of that question until I encountered the timeshare salesperson…

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  3. Just because you were conned in Thailand don’t assume other people are as stupid as you . If someone is not sleeping then let them make up there own mind what bed they want to buy. I paid $8000 in Harvey Norman for mine six years ago and it’s not half the quality the Wenatex is, I wish I knew about them then . $10,000 may be a lot for you but it doesn’t mean it is for others. After all how long do you spend in bed.

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    1. Thanks for the comment. If it’s such a good bed then why be so secretive about it. The whole business model is designed to pressurise you to by a bed. The point is it’s not a free dinner if you forced to spend $15k on a bed. Do u work for Wenatex?

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  4. I don’t get what you mean by “secretive.” It is a product, just like any product and there are not many products for sale that are as described and written about as the Wenatex mattress is on its website. I think you are reading too much into the sales method. What is wrong with it? It is a way to display, very openly, a product that is for sale and it allows people to get as much information about it as they wish. And, before you ask, no, I do not work for Wenatex. I do have a mattress, though, and it is just great. That is not a testimonial, just something I thought you should know.

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  5. Why did you take my [ not unkindly worded] comment off? Is there any opportunity to respond to a free lance journalist’s opinion with a different opinion, such as one might do with,say, Andrew Bolt’s column?

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      1. I have only just come across this sick rubbish you have written with your dumb and uneducated and naive and uninformed opinion. You are a sick spoiled, lazy, negative, waste of a human and you have never in your life worked as hard or as long or for as little as Claude WErnicke. This sales method has no relationship to your scratchy ticket stupid scam that any intelligent person would recognize and which most intelligent people would already know they would be wasting their time and stimulating life going to wherever you went and felt you were bored…duh how dumb are you…blame blame your stupidity on others. How dare you blend what Wenatex achieves and their sales model to your crummy little holiday scam…the Wernickes never had the time or luxury to fluff around as ?backpackers. You lazy consumerist opinionated piece of fluff. You know nothing about this company…the Wernickes work hard and built this company from one rented office and 2 office staff…Claude built this company from scratch working up to j18 hours a day 7 days a week. As it got going, his sons joined, they all came from penniless after a previous dot.com company they built as young boys straight out of Uni went under overnight with the dot com crash in 2000. Claude has worked since the age of 13 full time, starting in Germany, then Canada where he migrated with only german language at 18 years of age, starting in the labour camps for railways, working in blizzards and living on very littel and worked his way through various jobs to become the top real estate salesman in North America. He migrated to Australia after 20 years in canada and bought a series of farms, first working as a sales rep for Elders driving all over nsw and qld. He had a dairy farm…do you know the work that is involved for one person on a dairy farm..no i dont suppose you would, you have clearly had a fluffy life that only achieved a poisoned pen and a big mouth to blame and destroy the reputations of others. AFter losing his much loved cattle property in drought, debt and divorce, and raising 4 university educated children who have all been highly productive and valuable tax paying australians….not fluffy useless bludging backpackers such as your self enjoying holidays and travel and with the time and stupidity to think they might win some money instead of earning it….can i tell you another sure fire way to attract money to yourself withing 2 weeks…..get a job . Now the wenatex sales model evolved after a few trials of other methods…finally they modelled it on the way pharmaceutical companies launch new drugs (my idea, as a veterinarian and havine attended these informative events that provided a good meal and opportunity to socialize and also learn about a product). since you bludge around the countryside using other peoples beds and sleeping bags, i dare say you have not interest in a decent bed. if you did you would know its a minefield to come into a shop or several shops and get a pimple faced junior sales assistant to tell you anything about the spring and foam and poor selection of beds available in australia (at that time). much worse if youu come from a farm and have the same mattress for 30 years and your only chance to come to the city and buy a new one…takes your whole day and you dont get what you want and pay as much most of the time as the wenatex beds. I have had a wenatex mattress since they started…i wouldnt buy anything else….15 years i can was the cover and i can move it without a furniture van. My kids, mother and rellies all have them because they enable good sleep and i havent enjoyed a mattress anywhere as much as these. About your miserable comments about the NZ tv show and the actors tricking a poor old retired couple trying to earn a living…Wenatex gave them an income they couldnt get anywhere else because of age and they were prepared to work and earn rather than backpack and bludge. The old couple selling that night were not English first language..they were german and doing their best to convey the script to demonstrate the mattress. her words were translated from german in her head and this pair of actors did their best to fluster and get the words they wanted to create their poisonous attack on wenatex and also cost this old couple their job and income and cost the company thousands to defend it. Claude attende the interview of that show and felt it had all gone well, only to discover their malicious editing to damage his reputation and that of the company. You might think back to the times all this was happening and when they were finally making a profit…just before the GFC…there were many other companies and real estate and everything else was flying and $$$$ were easier to spend and earn. What happened then in 2008…everything came crashing down, the company had gone form one one little office to most towns and cities round to Perth, to NZ and to Canada…as you correctily said, Claude built a $30M company from scratch in the space of a few years, starting out penniless after losing his farm, Bonnie Doone that all but killed him to lose. After the GFC and the rubbish in NZ …and investing heavily in canada where they couldnt get a finance company to to the contracts due to the GFC already hittin Canada..this company owners have worked day an night …the company was only ever as good as the last nights figures. Claude 6-7 days a week for 15 years worked minimum 12-16 hours a day and often whole weekends. His sons did the same. Any profits went into going into NZ and Canada and they employed 150 people many of those coming with the seat out of their pants and being able to turn their lives around and pay off their debts and buy a car or house or first holiday. He gave jobs to old people, any nationality, anyone who really wanted to work. He has many grateful employees from this company. they always welcomed bums on seats at the dinner presentations…uni students took advantage of the dinners, people in small country towns could invite any of their friends….no obligation to buy. i really dont know how dumb you are but hard sell? pressuring people to buy a mattress,,,well that would be about one of the hardest sells i should think. Maybe people like to sleep well and when they need a good mattress they isnt it helpful to have someone explain a bit about a product instead of going to a shop with 2-4 different sorts and some sales assistant without any real knowledge of a product. you know what, you would have to be one of the dumbest and most negative people i have seen blogging and thinking you are half clever in your stupid mentally lazy, unemployed, on the drip life, spoiled opinions. You know nothing about business, nothing a bout the people you denigrate, nothing about intelligent people that want to buy a product, nothing about anything except cuttin down tall poppies.

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      2. Say, Freshly, why didn’t you reply to Barbara’s post? Or are you just going to wimp out and only reply to the ones who agree with you? Put up or shut up, as the saying goes.

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