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5. The Compensation Plan: I’ve previously dealt with the % of revenue paid out…so I won’t go there yet again. See point 3 in Network Marketing Success - Choosing a Network Marketing Company (Part A) There are as many diverse compensation plans out there as there are network marketing companies. That’s ok…as long as the compensation plan works with the “numbers”. The numbers are these: (Acknowledge that you cannot change these facts, you in fact have no alternative but to work with them) * If you inquire of any successful network marketer concerning their accomplishments, they'll inevitably advise you that the vast bulk of their earnings comes from a very small number of people in their team. * Statistics in the network marketing industry tell you that the "typical" distributor sponsors 2.7 people into a home based business in their whole career. To make it a round number, let’s suggest the “average” distributor will be able to sponsor 3 people into their business. That says to me that for the typical distributor to have any practical probability of making considerable money & achieving any authentic network marketing success, any compensation plan that insists you have got to build your 1st line more than 3 wide before you make money is destined for failure for most people. That is NOT to say that you shouldn’t be able to build wider if you wish…just that if you MUST build wider…no go. The compensation plan MUST allow you to make very considerable money with no more than 3 down-line teams. If you need to go wider to 6 or 10 to accomplish the dizzying heights of silly money, that’s okay. The only people who can build wide are the 5% of people who are heavy sellers…and this cannot be duplicated. On top of that 85% of people do not like being “sold”, and they don’t appreciate aggressive salespeople. * Any compensation plan that severely restricts your ability to place new recruits anywhere in your down-line you choose &/or does not reward you for building deep. * Any compensation plan that insists that I need to personally retail a certain volume of product or obtain a certain number of customers every month in order to be eligible to receive bonuses or payments of any kind. Again…this plan necessitates that I can never give up work…so to me it is not legitimate residual income…at least in my description. So…in my view the greatest compensation plan for network marketing success will have these key features: 1. It works "with" the statistics as explained in brief above…& 2. Average people (including part-timers) can build & have acceptable success. (The great majority in your team will be “typical” people). 3. It won’t be a condition to acquire new customers frequently or to personally achieve a specific product volume regularly once these tasks have successfully been fulfilled. It is ok to be required to retain a certain level of customer points…but that is where my point above in “The Products” segment of Part A of this blog concerning customer loss becomes significant. 6. The Company Policies and Procedures: Don’t worry…I’m not going to go into this in a heap of detail…much too dull. I just want to emphasize a few points. * Make sure the policies & procedures of the company (these are lawfully binding) that you are considering signing up to DOES NOT assign the company the right to end your distributorship (except you be in breach of other agreed to operating conditions etc. that are spelt out in the P&P’s…this will be in every agreement) for any grounds the company may consider fit (but not specifically described). This has happened before & most likely will yet again. There are stories out there of high earning distributors having their annual renewal voided for no understood reason. Possibilities are endless…possibly the company was having trouble paying their overheads & need to reduce commission payouts in order to boost available revenue for themselves (bear in mind my point above about comp. plans with high % of revenue payouts!!) * As a particularly general rule of thumb a policy & procedures manual should have no cause to be greater than 20 or so pages max. If it is 50, 60, 70 or more pages…be afraid…be very afraid. Myself, I would just pass it back and run….& have a look for an alternative company. Achieving network marketing success is difficult enough without it stripped out from beneath me by an unprincipled company. 7. Timing: I have already dealt with start-up companies in point 1 so no going there again How can you gauge “timing”? Here are some tips: 1. You'll waste a lot of time, money & energy getting in too prematurely, since a large percentage of these companies crash in their first couple of years. 2. You'll waste a lot of time, money & energy getting in too late. If the company is by now a household name its momentum growth phase occurred ages ago. You'll be fighting an uphill battle to get a decent start & make decent money in these companies. 3. Ideally you want to join AFTER a company has proven it has staying power but BEFORE its momentum growth period If you can locate a company like this, and which also has the other parts of the criteria in place, you will give yourself a genuine fighting chance to ride a momentum wave to network marketing success and genuine wealth. 8. Duplicatable Success System: Each person you sponsor into your team and each one they sponsor is going to require a simple doable step by step success method that will facilitate them to get off to a quick start. Whether that is online or offline or both, whether it is one on one, cold market or warm market, customer acquisition, recruiting or becoming a guide to their personally sponsored people. Each person doesn’t of necessity need to do it all, but they do need to have all those techniques and skills accessible to them. It is almost certainly pretty reasonable for me to say that you will by no means find a company that wholly ticks every box when it comes to providing you with a realistic, useable, affordable system to do all of these things adequately. Most companies have in their distributor ranks individual teams and/or leaders who are entrepreneurial reps. and who have evolved duplicatable systems. These are the people you want to come across and work with…provided they are in a company that passes the standards I have described here in this and the earlier blog post. This second article post concludes my two part series Network Marketing Success - Choosing A Network Marketing Company. I would really desire to help you achieve your personal network marketing success along with your dreams that motivate you. You can click the links below to go to my website here for a duplicatable free turnkey training and attraction marketing system for your network marketing success.
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