Herbalife released a Nielsen survey in May 2013, reporting approximately 7.9 million customers in the U.S. This announcement followed the company's unfulfilled promise to publicly identify wholesale customers among its 3.2 million distributors, a commitment made in February of the same year.
The February announcement stated Herbalife would "more clearly identify the wholesale customers among its 3.2 million distributors from April." For unknown reasons, these results never became public. The company missed its own April deadline without explanation.
On May 2, Herbalife CEO Michael Johnson then announced "significant changes to the nomenclature used by the company in the next 30 days." This was widely anticipated to be the introduction of a "wholesale customer" class into the Herbalife compensation plan. Yet, this change also did not materialize.
Instead of releasing figures on wholesale customer numbers, Herbalife commissioned Nielsen to conduct a survey. The study focused on the consumption of Herbalife products by the American public. This occurred around the same time the wholesale customer figures were expected.
Nielsen conducted the survey over April and May 2013. It sampled 10,525 adults across the U.S., balanced by age, gender, race, personal income, and geographic region. The survey reported a margin of error of +/- 0.96%.
The survey's headline finding was that 3.3% of the general population purchased Herbalife products within the past three months. This figure, projected to the total U.S. adult population, suggested Herbalife had about 7.9 million customers.
But a closer look at the data shows that 87 percent of the 349 respondents who purchased Herbalife products for personal use in the last three months reported they did not buy from the company as a distributor. Herbalife's U.S. distributor network totaled approximately 550,000 as of the first quarter of 2013.
Claiming Herbalife's legitimacy based on this Nielsen survey becomes problematic because the company's own distributor network is included in its overall customer count, blurring the distinction between those who buy for personal use and those who sell.