How do sales compensation plans differ form mlm compensation plans?

At the outset, let's get on the same page with some definitions about compensation plans.

A sales compensation plan links sales to compensation. This implies, more the sale, more the compensation for the employee concerned.

An mlm compensation plan links the multi-level movement of product to the individual compensation along a slab structure. Typically there is a balancing of width and depth that results in maximum compensation.

A deferred compensation plan envisages the pay out of compensation on parameters related to longer term sustenance and fulfillment of defined criteria, related to sales or even mlm.

That said, an employee compensation plan would typically be one of the sales compensation plans, and senior executives could also have a deferred component so that there is an incentive for leadership.

However, any sales compensation plan would beat an mlm compensation plan in the early stages since the incentive is immediately visible. In the later stages, a well balanced mlm compensation plan might outshine the best of sales compensation plans and even deferred plans due to the sheer numbers of a network. But it takes a lot of grit to reach those levels.

Is there a new compensation plan that would appeal to executives, employees, people in mlm and in sales? Thankfully the answer is YES!

A hybrid compensation plan is the new model to go with. This starts as a sales compensation plan and operates on a multi-tier structure without any need for balancing. The sales down the tiers create compensation in tiers above. Hence there is an incentive for team building but instant gratification as well.

Add to this a deferred compensation plan on post-sale subscriptions (or autoships). This new feature builds continuity of product movement and accrues to the executives fully dedicated to their business like the mlm reps are.

At the outset, let's get on the same page with some definitions about compensation plans.

A sales compensation plan links sales to compensation. This implies, more the sale, more the compensation for the employee concerned.

An mlm compensation plan links the multi-level movement of product to the individual compensation along a slab structure. Typically there is a balancing of width and depth that results in maximum compensation.

A deferred compensation plan envisages the pay out of compensation on parameters related to longer term sustenance and fulfillment of defined criteria, related to sales or even mlm.

That said, an employee compensation plan would typically be one of the sales compensation plans, and senior executives could also have a deferred component so that there is an incentive for leadership.

However, any sales compensation plan would beat an mlm compensation plan in the early stages since the incentive is immediately visible. In the later stages, a well balanced mlm compensation plan might outshine the best of sales compensation plans and even deferred plans due to the sheer numbers of a network. But it takes a lot of grit to reach those levels.

Is there a new compensation plan that would appeal to executives, employees, people in mlm and in sales? Thankfully the answer is YES!

A hybrid compensation plan is the new model to go with. This starts as a sales compensation plan and operates on a multi-tier structure without any need for balancing. The sales down the tiers create compensation in tiers above. Hence there is an incentive for team building but instant gratification as well.

Add to this a deferred compensation plan on post-sale subscriptions (or autoships). This new feature builds continuity of product movement and accrues to the executives fully dedicated to their business like the mlm reps are.

One model of the hybrid compensation plan is covered in a blogpost about hybrid compensation plans at http://www.doonlinebusiness.info/2010/02/05/online-sales-compensation-pl.... There is also a video at http://www.youtube.com/watch?v=M4qyt540us8. Definitely worth a look!