If your compensation plan isn’t producing the results you expect, you either need to improve your plan or lower your expectations. No one wants to lower their expectations; that’s like giving up. There is a better way.
Start by watching our video to learn the four reasons to improve your compensation plan. As you watch, you will learn more about compensation plans and this knowledge will help you with yours.
Next, Take Our 7-Question Quiz
Compensation plans should be designed to motivate and reward specific behaviors. To find out how your compensation plan is really doing, answer “yes” or “no” to each of the following questions:
1. Personal Consumption
Do your independent representatives personally use or consume your products when they are not earning money?
2. Sales to Retail Customers
Is the percentage of total company sales to non-participants in the income opportunity increasing?
Is your rate of retention of representatives above average for companies like yours, or if not, is it on the rise?
Are you seeing increases in the percentages of representatives who have recruited at least one person and the percentages of representatives who have recruited at least two people?
5. Supporting Others
Is your compensation plan driving a team-building culture?
6. Becoming a Leader
Do you have an effective Leadership Training Program for all ranks of field leadership?
7. Developing Leaders
Are there sufficient financial rewards and recognition for developing leaders?
If you answered “no” to any questions, you have some work to do.
The first step is to measure the performance of your compensation plan over periods of time in each of the key areas so that you can see clearly what is working for you and the areas in need of positive change.
Are the performance results of your sales force in line with industry averages? Better yet, is your company “beating” industry averages?
Once you’ve identified your targets of opportunity, you can proceed to the next step… adjusting your compensation plan to achieve optimum results.
Be sure to include a transition plan to introduce the plan changes to your field and to minimize the effects on individual representative compensation.
When you encourage and reward properly each of the key behaviors, the success of your representatives will propel your company forward.
Help Is Available
Sylvina Consulting can help you to evaluate the performance of your compensation plan and, as needed, to design changes to encourage higher rates of activity, retail sales, retention, rates of recruiting and leadership.
Compensation plans are designed to motivate specific behaviors from independent sales representatives.
As a network marketing or party plan direct selling company, your largest business expense is or will be field compensation.
Most companies can’t afford to pay for the wrong behaviors while skimping on the right ones. However you pay, it’s important to spend your money wisely.
Is your compensation plan producing the results you expect from it?
If your answer is “no” or you’re not sure, we recommend a Compensation Plan Evaluation to evaluate the performance and effectiveness of your compensation plan.
At Sylvina Consulting, a Compensation Plan Evaluation is an in-depth results-oriented review of your current or proposed plan, with recommendations included for changes to align the plan with your margins, desired pretax profitability, products/services, and desired sales force behaviors.
Brave And Smart
Don’t be afraid of changing your compensation plan. Instead, be brave and smart. Enlist the help of MLM consultants and compensation plan experts like those at Sylvina Consulting who have helped hundreds of companies just like yours.