The Half K Question - No Pay, No Stay!
Read More: Have you ever wondered ...
* Why people do not stay with the company they have chosen?
* How you can sponsor someone in January and can't find them in March?
* How you can spend seven hours training them in April and they won't return your calls in June?
* Why your newbie is a superstar in July and suddenly transforms into a vaporep in September?
* Why you must continue to sponsor, sponsor, sponsor to make a dime?
* Why you are constantly replacing people?
* Why you can't build a team that grows and duplicates?
* Why nobody is sticking with this like you are?
When you finally sit down and admit that it's not working, you've reached the crossroads.
You can choose to blame everyone on your list and on your team for being lazy worthless bums with no vision, or you can say to yourself ...
"I can't invite one more person to share my failure. What went wrong?"
The answer is simple and sounds corny, but here it is:
"NO PAY, NO STAY!"
Earlier we wrote an article about the 10k question. It's a great yardstick for the long term, but if you are interested in keeping people in your business for more than a month or two, you need a question that addresses retention.
It's the Half K Question:
"If I bring $500 in revenue to the company every month, how much will I be paid?"
Five hundred dollars would be a good start to a business - your own autoship or subscription, perhaps one rep and a couple of customers. If people start a business and put in a reasonable effort over a few months doing everything they've been told to do by their sponsor, upline and company, and at the end of three months they receive a picture of check for $1.73, they are gone!
We've analyzed over 300 companies in the past three years, and have found a huge range of answers to the half k question - from you making $100 down to it costing you $100!!
We're embarrassed to say that we worked for five years with one of those minus $100 companies! No wonder we thought we'd failed and no wonder people vanished as soon as they appeared!
We paid $1000 for just the business and training position and received nothing in return in a bag, bottle or box. Regaining that investment over the next year meant about $80 per month in costs.
We paid $30 monthly for a website which should have been free.
That's $110 in costs going directly from our pocket into the company's pocket.
The pay plan was so poor (2% commissions!) that we earned just $10 on $500 revenue to the company.
$80 plus $30 less $10 = NEGATIVE $100!
It COST us $100 per month to work that business! That's more than just bad math. That's stupid and insulting and we don't blame those who left us. They were smarter than we were!
If you want to keep people in your business, make sure your company has a Half K answer of at least $50 to $100. That's a starting percentage of 10% to 20%.
Otherwise, you face years of failure and frustration, not to mention maxed out credit cards and remortgaged houses!
If you'd like to learn more about how to succeed in MLM, and how to avoid business models that cost you rather than pay you, read this free report.
Bob and Anna
http://www.togethertothetop.com
Views: 890
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Comments: 24 
About the Author: Bob and Anna Bassett
Member Since: 03/31/2009
I'm a Distributor For:: Vitamark International
Other Company: Together To The Top
Industry: MLM
Primary Web Site: http://www.TogetherToTheTop.com
Well Said
Nice article, everyone should know the answer to the 500 dollar question and I'm amazed at the number of people that have never even thought of it. Thanks for sharing your thoughts.
That's right: NO PAY NO STAY
Bob, that information is so important for us Network Marketers to know,learn and to teach others!Those are the kind of facts that will save our business,save our time and save our money. We must be educated before we just jump in and join a company because they have good produts etc.. Thanks for the expert information!
One half pay question
Good job Bob
Phil
Simple Truth.
Wow Bob and Anna, The truth can be so simple. If all people looked at their opportunity with clear eyes and did their math, a lot more people would be happier for it and Network Marketing would only be known as the great thing it really is.
Thanks for such an en-lighting article.
Ciao for now,
Rutger.
Show Me The Money Or I'm Out Of Here!
Oh how I have asked myself all these questions you have listed Bob. Without accurate information, it's not my fault if I am struggling. Once we learn the truth everything comes to a head and we can understand why so many wonderful people fall to the way side. The more we need to shine our light for ALL to see! Thank you for this brilliant article Bob!
No pain, No gain =No Pay, No Stay
Bob, I wish when I first started marketing, I would have taken my pay plan into consideration. People get excited and what is sad is their upline makes people think as though they are going to make money instantly. It so sad when I hear about it. I remember my first encounter and my upline said to me that they could see me in a "NEW HOME" "what color would you like Therese?" and I was Huh? and I said to myself, what's wrong with my home now. I love my Home. If I know now what I didn't know then, but I didn't. Thanks for excellent Value
Do the Math
Thanks Bob! It's a point everyone should be able to answer, because without retention you won't be able to retire!
Very insightful!
Hi Bob and Anna!
I totally agree with you that if a person who is doing the work to change their life can't make any money doing the basics, then they have to quit to survive! If there weren't some companies out there that make it possible we wouldn't have a great industry that we do.
So, what we must do is to make sure that we give our prospects a complete understanding that they can make significant money, even part-time, and that there are no hidden "Gotchas" they will run into during their first few months.
Having a company like that is a real pleasure, and I am going to renew my efforts to make sure that my prospects know I have a company they can succeed with, even on a part-time basis.
Thank you so much for the reminder!
How Much am I being Paid?
You need a Pay Plan that will Pay the Part Time Person! Do Yourself a Favor and See what it takes to Break Even.
Great Post Bob and Anna, Thanks for Sharing!
"NO PAY, NO STAY!"
Good point Bob. I just helped one of my new downline (less than and week old) make $1,446. Do you think he's going to stick around? I think so. And even if it would have taken him 3 months to make that amount of money he still would have stuck around (I'm pretty sure). Worried about retention - give your team something they can make money with and those worries are gone.
That kind of number crunching (the money in the bank kind) is the only accurate figures to look at.
Joyce
Without a doubt...
...one of the most important pieces of information you need when evaluating (1) companies/opportunities or (2) why your downline keeps going away. :-o
As Always Great Value!
We all go through the learning curve before we land on the right one! Many thanks for the excellent content Bob & Anna...U Rock!!
The Perfect Storm; Product, Comp Plan, Training
Great article Bob & Anna,
The numbers do not lie. The folks who make some money, and it's usually that magic $500 mark stay for more. The others don't and the birds get them. If folks would understand when evaluating a company in the beginning; is the product consumable with out changing buying habits and at a better price than a brick and mortar store then the new rep can move product, make money while finding the "right ones" for the biz. Then they stay. Does the comp plan reward the new rep for such action. Then they stay. Does the company have training set up in such a way as to NOT break the bank of the "average" person getting started? IF yes, Then they stay. Other than those requirements I believe it comes down to PURE DESIRE of the new rep to make their biz work.
Thanks for the content.
Keep Going.
Daniel
The Half K Question - No Pay, No Stay!
Hi Bob,Anna.
Thanks for this great tip,i will pass this along to my team.
Hollis
Its a great place to start!
$50 to $100 for bringing $500 to the company is fair and benefits the part timer enough to show it really works. Check in hand that pays for their products that month, and gets them into the profit mode. The majority who earn less than 10% will find it hard to keep motivated, and be off chasing the next deal on the block. Thanks for bringing this simple formula to light Bob and Anna!
Can't anyone give an answer to Bob and Anna question?
I notice how this article has received a lot of replies and yet not even the person who wrote the article has answered the question...
"If I bring $500 in revenue to the company every month, how much will I be paid?"
Doesn't the question deserve an answer?
Well if you did that with the company I am with in the way of customers, you would make at least $120. Increase it to bringing in $600 per month and you would make at least $240.
95 - 98% Retention & Reorder Rate for 25 yrs. Straight
I can appreciate those struggles.
Until I learned to ask the right questions like reorder & customer retention rate, % of income back to the field , etc.
The average 1st month check with the company I'm with for those that follow our teams system is $800 - $1000.
In fact our team specializes in making sure our people get a 1st month's check of more than $500 on an investment far less than that.
Again when a billion dollar company has a solid 25 yr consistent growth record & 95-98% retention & reorder rate it's obvious why it's the only company in our industry to receive the BBB's Blue Torch Award.
Warren Little
772-971-8637
Not a big fan of the replicated sites
I just did an article on why people shouldn't use them -- they're definitely not worth the investment:
http://drivetheline.com/are-you-sending-people-to-a-company-replicated-s...
Sincerely,
Derek
You asked David
"If I bring $500 in revenue to the company every month, how much will I be paid?"
So much depends on the comp plan which is probably why not many people are answering. If it's a weekly comp plan with a 100 point breakage point valued at $150, depending on what week and how much comes in per week you might get paid nothing !
With a MONTHLY minimum 100 point breakage point valued at $150 then I'm looking at $500 less $150 = $350 X 20% = $70.
Hope that was what you were looking for.
Joyce
Thanks Guys
Ya'll are always full of great information
Re Daniel - The Average Person
Daniel, you are absolutely right.
The vast majority of networkers do this part time, trying to develop enough income first to get their own products paid for and then to replace a payment or two.
Thinking about replacing an income comes much later, as belief level has to be built one step at a time, dollar by dollar.
Thanks for your comment!
$120 is a great number!
Hi David
If your company pays $120 for bringing $500 revenue to the company, you've found a good pay plan! Just make sure it's residual income, not just fast start bonuses. If your pay stays at $120 month after month and does not rely on constant expansion of your team, that's a good thing!
$500 Revenue
Hi Warren
The half k question refers to commissions paid on just $500 revenue to the company, not what is necessary to earn a $500 check. The reason we chose that smaller number is because it represents a good small beginning to a business, and it's critical at that point to get your new people paid well so they will stay.
Thanks for your comment!
The Revenue
Great article guys...right on the money! This is the reason I looked for so long and at so many different opportunities until I found the right one. Next day pay and the best product around...not just for business but making money as well. I am certain everyone appreciates the insight you guys bring to the table.