Compensation Plan Development is a Critical Step for any MLM, Direct Selling or Party Plan Company. The Compensation Plan establishes the motivation of your Sales Team. This is important... it can Motivate them to Recruit for a Recruiting Bonus... a no-no, it can Motivate to make False Representation of Potential Income... a no-no, it can Motivate to make False Representation of the Product... a no-no, it can Motivate Sales Reps to cultivate their own Customer Base, in order to earn are commission or benefit on those Customer Sales... yes.. this is a good thing! Surprisingly, I did have an MLM Attorney quote from my playbook, during a call once... in his words "Customers are Good for Business, I repeat, Customers are Good for Business." These words resonate with me, as they encompass the foundation of a Solid Compensation Plan... Customers are Good for Business!.
The Ying and Yang of a Compensation Plan, is found in the delicate balance of design... lending attractiveness to sales reps, regarding potential reward for selling, with the corporate need to be successful, profitable, and sustainable.
The Number 1 Mistake made by New and Existing companies... Letting the Tail wag the Dog. In other words, allowing your Sales Reps, or those claiming to be successful in another company, to dictate the details of your Compensation Plan. LISTEN CLOSELY... You are Wearing an Owners Hat... Every decision you make, including details expressed in your compensation plan can have positive or negative impacts on the marketability, sustainability, profitability, as well as have legal implications. Don't let the Tail wag the Dog. Don't fall for a former Distributor, that printed a label for their lapel that says 'Consultant.'