Is Your MLM Comp Plan A Little Stale?
by Sue Bradley
After a busy holiday season filled with too much to do, too little time, and too many pressing, urgent responsibilities….I need a break. And there is nothing that refreshes mind, body and soul quicker than a walk outside, letting go of stress, awakening to the little things that are beautiful in life and taking nice deep breaths of fresh, clean air.
For us at The Sheffield Group, getting fresh air has a deeper meaning. We describe AIR, or Awards, Incentives and Recognition, as the “second half of the comp plan”. We sometimes add an “e” to AIRe to represent “events”. Events are such a huge factor in your company’s success and are integral to an effective Awards, Incentives and Recognition program. We will cover that in future article. Why such an emphasis? Because in our 21 years of consulting the top industry leaders worldwide, it has proved so critical to the success of any startup or expanding company, it is as important as the air you breathe. Knowing that you are planning ahead for the year, we want to encourage you to breathe in a little of that fresh AIR now in order to turbo charge your company’s energy and momentum. With that in mind, we’ll help you start brainstorming some possible Awards, Incentives and Recognition here.
Compensation Plan ( Comp Plan ) is always a top priority for the startup companies — and the traditional, international corporations adding a multilevel (network, relationship or referral) marketing, party plan (group selling), direct sales or affiliate programs — that visit our offices. However, when we ask our clients to list the most important factors crucial to their successful launch or expansion, very few mention AIR. The reasons for that vary. Traditional corporations that do not have independent salespeople don’t realize how AIR catapults and sustains a company’s success, builds brand loyalty or creates a lifelong bond with their impassioned independent distributors. Motivating and rewarding employees can be very different from non-employees who decide to quit simply by ceasing to sell. Startups tend to think AIR is something that can be put aside for a while (it can’t), might happen naturally (it won’t), can start when their distributors ask for it (they’ll be gone – with their downlines – to a company that already has it), or maybe they think they cannot afford it (they can’t afford NOT to have it).
Make no mistake. Money is important. Most people expect to be paid for a job well done in any profession. And the lure of an unprecedented, residual income that can create an unparalleled freedom to enjoy the many joys and passions in life is what draws most people into direct sales. Done correctly, that is exactly what a well designed compensation program can and should do for your new or existing company. However, while many distributors come for the money, most stay because of AIR.
Because you are leading a “volunteer army”, the motivation you must provide for your distributors to pursue their dreams through the many obstacles they will face is monumental. It takes recognition by the company, an acknowledgement that their effort has been noticed, and an incentive to perform at a higher level. Perhaps the greatest illustration of just how pivotal this “second half of the compensation program” is, is the universal axiom that is often repeated by industry leaders worldwide — “Recognition. Babies cry for it. Grown men die for it.” Is it any wonder seasoned industry veterans put AIR so high on their list of priorities?
Ask any successful distributor or consultant about their company or about the companies they have been with in the past, and I guarantee that they will mention some facet of the Awards, Incentive or Recognition program. Maybe it was the cruise they went on to the Mexican Riviera. Perhaps it was the time they received a condolence card from the company president when their beloved cat, “Charlie” passed away. Maybe it was just the sense of camaraderie and friendships they developed with other members of the company across the United States. All of these are “driven” by a coordinated, comprehensive and ever-changing Awards, Incentive or Recognition program.
AIR programs also include and benchmark what happens at each level within the compensation program. For example, one company that I work with provides pins, specialized foil imprinted business cards and a company-paid trip for specialized leadership training when the consultant gets promoted to Director. Another sends a hand-selected gift (they are different for each distributor) with a personal note to the top 100 people in their company as a Christmas present. AIR programs can include annual incentive trips, cruises and weekends at spa-resorts. They can be in the form of recognition of major milestones, such as a first party hosted or sales goal achieved, or something more personal, like best wishes from home office for an anniversary or birthday. AIR programs can be as comprehensive as an exclusive event that brings distributors together for recognition, training, edification and motivation or as intimate as dinner with the founders and top leaders.
A comprehensive AIR program includes plans for informal and formal recognition. It is varied because everyone has different things that appeal to them. It reinforces the behaviors that distributors should be making part of their day-to-day lives and it rewards the results produced by these actions. It can be as simple as a thoughtful note or phone call from the president that says “good job” or as exciting as a request to give their business or product testimonial on the national corporate conference call. In other words, AIR programs don’t have to be expensive, they just have to be sincere.
We strongly urge you to brainstorm some ideas for AIR with your staff and leaders and then implement them in the field this year. As you go through the process, remember who your distributors are and what specific types of Awards, Incentive and Recognition will show them their success really matters to you. If you do it right, you will be rewarded by a mind-clearing, sales-driving, company-invigorating breath of fresh AIR.