Her tears dried up when she realized her "Weekly Comp Plan Sucks"
Group: Learn the Skills from MLM / Network Marketing Experts for FREE
Read More: A struggling network marketer came to me in tears, totally frustrated. "How are you doing it? Why are you having success and I'm not when I'm working so hard?" We went over the usual stuff - what she was doing to generate leads, did she have a good decently priced product, upline training and support etc.
Together we took a quick look at her compensation plan and I'll quote her conclusion "This weekly comp plan sucks !"
This is what she discovered when she grabbed a pen and we did some comparisons.
On retail sales with all things being equal - Both companies had a 100 point autoship once a month. Both companies offered a 20% commission on retail sales. Her first 100 points each week was the base qualification and therefore not paid out on.
Her company Mine
WEEK 1 -
Sold 1 case of product valued at 100 points Sold 1 case of product valued at 100 points
She received - 0 I received - $20
WEEK 2 -
Sold 1 case of product valued at 100 points Sold 1 case of product valued at 100 points
She received - 0 1 received - $20
WEEK 3 - *100 point autoship ran *100 point autoship ran
Sold 1 case of product valued at 100 points Sold 1 case of product valued at 100 points
She received - $20 I received - $20
WEEK 4 -
Sold 1 case of product valued at 100 points Sold 1 case of product valued at 100 points
She received - 0 I received - $20.
Her total for the month on retail sales was = $20 My total on retail sales was $80.
Same amount of work for one quarter (1/4) the commission! I explained to her there is a big difference between "empowering" and "disempowering" compensation plans. And on retail sales alone her recruits were going to get discouraged and quit when they received nothing for their efforts.
Deeper into her compensation plan we discovered another discouraging element. A bonus was paid out when you recruited someone into your business which was fantastic. The hitch came when she went to help her new recruit sign up someone of their own. The way the comp plan was laid out she wouldn't receive any financial bonus for helping her downline unless she had attained a very high pin level on her own that week. She was getting a lot of personal pleasure from helping her downline but no financial compensation (discouraging). She realized she needed to focus on recruiting continuously as her retention rate was terrible. (People would stay about 3 months and then drop out). She also realized they were dropping out because she was recruiting people who wanted to make some money and the weekly comp plan wasn't paying people for everything they did.
Her company sold a cookie (boxes of 30 - 25 points per box). With her pencil sharpened and her calculator going she figured out she needed to have 16 customers each buying a box of cookies each month, carefully balanced so only 4 ordered each week for her to make $20. Needless to say she was discouraged but strangely excited too. Now it was making sense why she wasn't making money. "Weekly comp plans suck" was her conclusion and I had to agree with her. This particular one really did suck.
To your success,
Joyce Penner
Views: 225
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Comments: 9 
About the Author: Joyce Penner
Member Since: 11/27/2008
I'm a Distributor For:: Life Force International
Other Company: Team Inc Pro
Industry: Communications and Networking
Primary Web Site: http://joycepenner.info/biz-blogging
Breakage?
Joyce,
Is this an example of what they call breakage?
Great
Great post. You really do have to get to the nuts and bolts of a pay plan to see where all the money YOU should be making is really going.
You bet
That's a classic example of big time breakage.
Thanks for pointing that out.
Joyce Penner
Here Is A Resource That May Help This Person Make Better Choices
It is not my intention to share this resource. But I feel, this will help this particular person make a better choice of companies next time. This link is not an affliate program.
http://idegroup.5pillarstosuccess.com
This sounds a lot like my previous company
Joyce,
I didn't educate myself enough at the time, but my previous company's pay plan worked exactly like the one you're describing here.
Breakage? OUCH!!
I can see where your friend who's struggling is going to be in for more of the same misery if she hangs in with this company. My heart goes out to her. I stuck around for almost a year and a half in a company like that, scratching my head, working my fingers to the bone, and wondering why I was just going around in circles and going nowhere. Now I understand why.
To boot, I was competing with my own personally-sponsored downline. Can it get any more crummy than that?
When you speak to her next, tell her there's someone else here at BN (Me) who thinks weekly comp plans suck, too!
Thanks for sharing this vital, eye-opening info. I might suggest posting this article at other social networking sites and publishing it on EzineArticles. Everyone needs to become aware of the pitfalls of weekly comp plans.
Melanie Kissell
http://melaniekissell.com
I agree, Ivan
I'm with you, Ivan. This is a top notch post!
So many of us have joined network marketing companies with pay plans that really and truly are set up to benefit the COMPANY much more than its distributors. That stinks!
Melanie Kissell
http://melaniekissell.com
Here's another good resource
Chris,
This is another helpful resource for anyone who's trying to figure out the essentials to look for in a company:
http://www.betternetworker.com/groups/post/mentoring-for-free-powerful-n...
Melanie
I'd Be Crying Too
My heart really goes out to her. I've been in a similar situation. Let's face it, there are alot of crappy companies out there. It's easy to get sucked into the hype. Once the excitement wears away and you crunch the numbers, you realize it's an impossible feat to make enough money to live on.
The second time around I did my due diligence, and it did take some time, to find an opportunity that would actually allow me to support myself. If you are interested, you can review the guidelines I used to find my unique business online by visiting my blog post .
Good luck to you in your future endeavors.
To Your Success,
Robin Rowe
Robin
Your guidelines are fantastic !!
Thanks for the heads up on your blog. I couldn't add one thing to what you have listed there.
I wish people would crunch their numbers and make business decisions instead of getting caught up in believing only what they are told. Network marketing should be treated like a business and my heart goes out to those who don't see it or don't care.
Thank you again. I am impressed.
Joyce Penner