Whenever a direct selling company is considering changing its compensation plan, there are reasons that this is happening. Either there are problems that need to be fixed, or goals that need to be met, or both.
What are these problems?
As compensation plan consultants, we can learn about a direct selling company’s problems with their compensation plan by asking them to prepare a list of them. Interestingly, in our experience, we have found that half of the items on these lists are either not problems, or the issues aren’t factually correct.
Compensation Plan Transitions
How do you transition from one compensation plan to another? The short answer is “carefully”, but you need to know more than a one-word answer.
Winners and Losers
Unless you plan to pay out more in your new compensation plan, there will be winners and losers when you implement your new plan. Winners will earn more, while losers will earn less. Everyone likes to learn more money, but few of us accept pay cuts without complaint.
In advance of implementing or even announcing a new compensation plan, you will need to know not just who will be the winners and who will be the losers with your new plan, but also the magnitude of gain or loss.
With this knowledge, you can make good decisions on not only how you will present the new compensation plan, but also how you will transition to it and how you will respond proactively to the losers.
Introducing Your New Compensation Plan
You definitely don’t want your compensation plan to be labeled by your field as “bad news.” So, how do you prevent this situation?
The first step is to share your new compensation plan with your top leaders. They will feel valued when you show it to them first. When you ask them how they feel about the plan, they will tell you and sometimes this information will help you in explaining the plan to others.
The second group of representatives with whom you should share the upcoming compensation plan is the rest of your leaders. Only after you’ve done this should you release the details to everyone else.
One of the goals of your new compensation plan should be for your most productive representatives to experience higher incomes and to do so as quickly as possible after the effective date of your new plan.
However, it’s important to realize in the short-term after announcing or implementing your new compensation plan, you may see drops in sales and recruiting. This is normal because, in response to change, some independent representatives will decide not to place their next order, wait before selling to others, delay recruiting others, or quit.
To counter this possibility, it’s wise to consider starting a contest, introducing new products, offering customer incentives, and other measures to motivate sales and recruiting at the same time the new compensation plan goes live.
How Do You Know If Your Compensation Plan Is In Trouble?
The more you know about compensation plans, the better decisions you will make regarding yours.
While consulting with and improving hundreds of direct selling companies since 1986, we have seen how compensation plans can motivate and reward the wrong behaviors.
One Information-Packed Day
The Compensation Plan Conference is a special seminar that is presented in your company’s offices. At the Compensation Plan Conference, you will learn from Sylvina Consulting:
- the 12 key behaviors all compensation plans should motivate and reward
- the most common mistakes in compensation plan design
- how to properly set plan requirements
- what are the biggest compensation plan myths
- what the Vemma and Herbalife decisions mean for your compensation plan
- how to measure and analyze the performance of your compensation plan
- what is the best compensation plan
- how to communicate better your compensation plan to your sales force
- how the 5 styles of compensation plans compare to each other
- how to set appropriate barriers to entry as a representative
- how to set group volume requirements to motivate recruiting from leaders
- great advice on pricing strategies
- what are the steps to change a compensation plan
- how to transition your field from one plan to another
- how to get software developers to do a better job for you
Agenda 9:00am until 3:00pm
Compensation Plan Design 101 – The Basics
Compensation plans should be designed to motivate and reward specific behaviors. Review the building blocks of all multilevel compensation plans and understand the set of behaviors to be motivated by field compensation.
Compensation Plan Design 201 – How To Design A Great Compensation Plan
Discover the science behind compensation plan design. Avoid the common pitfalls faced by others. Understand what is involved in building a great plan.
Compensation Plan Design 202 – How To Analyze Your Plan’s Performance
Find out how to analyze the performance of your compensation plan. Taking the proper measurements is key.
Compensation Plan Design 203 – How To Communicate Your Compensation Plan
Your compensation plan’s requirements need to be communicated to software developers. Your plan also needs to be communicated to your sales force. In this session, you will learn how to be a better communicator. As a result, your software developers will do a better job for you and your sales force will understand your plan better.
Now Let’s Talk About Your Plan
At the end of the Compensation Plan Conference, you will have up to two hours of time to discuss your compensation plan with Sylvina Consulting.
The Compensation Plan Conference is not only an outstanding and convenient educational experience for your company, but it is also a great value. Contact Sylvina Consulting at 503.244.8787 to learn more and to book your date for the Compensation Plan Conference at your company’s offices.
About Jay Leisner
Jay Leisner, the president of Sylvina Consulting, is a top compensation plan and direct selling expert, a trusted adviser to new and established network marketing and party plan companies.
In 2004, 2006, 2009, and 2014, Jay gave presentations on compensation plans and field leadership development at conferences held by the US Direct Selling Association.
He traveled to South Africa in 2015, 2016, and 2017 to conduct workshops on compensation plan design and recognition programs for member companies of the South African Direct Selling Association.
In 2017, Jay spoke at the Canadian Direct Sellers Association Meeting on the importance of recognition and in 2018, Jay led a workshop on recognition at the Annual Meeting of the USA Direct Selling Association.
More than just a compensation plan expert, Jay is exceptionally skilled at advising new and established companies on business strategies. Before offering advice or solutions, he asks important questions to understand each client’s specific concerns and goals.
Any time a direct selling company embarks on a project to amend or replace its compensation plan, there is an opportunity to drive the business forward faster. As with all the best opportunities, there are risks associated with them.
Step One: Contact Sylvina Consulting
Ask the experts at Sylvina Consulting for a free compensation plan consultation. Call 503.244.8787 or text 503.784.7873.