Submit for Review of your MLM Software Compensation Plan"We are what we repeatedly do. Excellence, therefore, is not an act but a habit." -Aristotle The greatest reason for starting an MLM or Direct Selling Company is to sell MORE of your particular product or service, by leveraging an unlimited and growing base of sales representatives.
You first need a written down Compensation Plan, as it can greatly effect the cost of your MLM Software System. To write it down means, you need to make a lot of decisions about the compensation plan, bonuses, flow of funds and types of bonuses used.
Often times, we see people grab 2-3 compensation plan and bonus ideas from 5 or 6 different companies, combining them with the hopes of being unique and attractive. "The best of existing company compensation plans have been pulled together to present ours." In truth, while each of the bonuses and compensation points individually may have appeal and seem simple for programming, the purpose and culture of the members can be effected, commissions can overpay and the particular arrangement of bonuses from multiple company compensation plans often renders a complex and expensive programming requirement. Face it, you're trying to get to a place in 30 days, where another company has built over 10 years to get... including the evolution of their compensation plan.
Have you stopped to think that the compensation plan and bonuses used by that company when it started, drove the early sales, but evolved to what you see today? In other words, the compensation model and bonuses in place 10 years later are finely honed to sustain and control growth, not put 500,000 people in a company over 90 days.
MLM Compensation Plan Sets The AtmosphereSome call it culture, some call it atmosphere.... it is the great purpose that embodies the great majority of your sales representatives. Is it to recruit endlessly to get rich or to seek and close consumers of your company's products and/or services, keeping a watchful eye for consumers which may make an excellent sales representative?
The MLM Software Compensation Plan will cause your sales reps to gravitate towards areas which they believe will provide the highest payout on their efforts. If you lean heavy on Fast Start or Recruitment Bonuses, you will end up with a fast-growing, but short lived recruiting business. If you lean heavy on Retail Sales, you will end up with a slow-growing, but long-life product sales driven company. Ultimately, more Retail Sales will be generated for the company, if more sales reps exist, hence a balance is sought, in order to develop the best culture/atmosphere for your MLM or Direct Selling Company.
Foundational Types of MLM Compensation PlansStraight Line - Imagine One Straight Thread Down, with every person directly under ONE person above. These lend heavy towards recruiting schemes, and position seems to be the buzz-word to attract new reps. That and earning through infinity, which seldom can occur without bancruptcy.
Binary - Limited Width (2 Wide), Unlimited Depth. Often, the Binary simply counts the total group sales volume on the left, compares with the total group sales volume on the right, then provides a particular bonus based on such. Due to limited width, the term Spill is often marketed, however this plan can often lead to the masses pitching a get-in-now recruiting scheme, missing the company's true value of products and services, and leading thousands to join and sit still to wait on spill.
Matrix - Limited Width, Limited Depth. We can equally say, limited earning potential. Of course, whiteboards quickly show how enormous amounts of money can be earned within a matrix, but this direction often leads to the same verbiage of spill, get-in-now and false expectations.
UniLevel - Unlimited Width, Limited Depth. Pretty well proven to support the best long-term residual income, when compared to other programs. That said, a UniLevel can also lead people astray.
Reverse Generation - Unlimited Width, without regard for depth. It is actually limited in the number of ranks one may advance to, verses depth. More common with financial or insurance products and often containing additional bonuses.
Coop's - Unlimited regard to Width or Depth. Coop's are built on the division of company-wide sales revenue. You may view this as corporate pool(s), of which members earn shares to determine their division thereof.
Bonuses to use with Compensation PlansThere are many types of bonuses, each of which may be used to engineer the purpose, culture, atmosphere of your sales team. CAB (Customer Acquisition Bonus) is designed to benefit a sales rep for landing new Customers, while FSB (Fast Start Bonus) is often used to benefit a Sponsor when a New Sales Rep chooses to purchase an Optional Product Package when they join.
With only these two examples, you can imagine how the mentality of your sales team is engineered. This is important. It determines the drive to sell a company's products or to recruit.
We can discuss hundreds of different Bonuses, but let's start with YOUR Compensation Plan.
Remember, it effects the sales team, but it also effects the cost of your MLM Software System.
And, dare we not mention, there can be huge legal implications.
Now, we are not attorneys, nor do we propose to replace an attorney.
Anyone starting a business should get a CPA and Attorney on board.
We do work with many of the industry attorneys and believe our guidance will save you a tremendous amount of money in software costs and legal expenses, verses handing them a botched up compensation plan concept.
With over 20 years of experience, we offer 100% FREE MLM Software Compensation Plan Review.
Get your compensation plan, in Word, Excel, or PDF and send it to email@example.com
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