- Compensation plan assessment and design change options
- Compensation plan simplification, enhancements or full changes
- Change Modeling - Who wins and who will need to shift actions to win
- Sales Force training and workshops
- Business strategy alignment and development
- Hostess rewards programs
- Incentives and promotions design
- Data and Trend Analysis - past and on-going
- Executive and Corporate Staff training
- International market expansions
CHOOSE A STRATEGY THAT ALIGNS TO YOUR GOALS
Direct Selling, Social Marketing, and Multi-Level Marketing companies employ various compensation plans to incentivize their salesforce. Each plan has unique characteristics that can influence the behavior and motivation of their representatives. We can adapt principles and levers of the most commonly used compensation plans:
- Unilevel Plan:
- Structure: This is one of the simplest plans, where each distributor can sponsor as many distributors as they wish, and all of these are placed directly under them (i.e., on their first level).
- Earnings: Commissions are usually paid out on a limited number of levels, encouraging representatives to build a wide network.
- Binary Plan:
- Structure: In a binary plan, each distributor can only have two front-line distributors. If a distributor sponsors more than two, they are placed under others in the distributor's downline.
- Earnings: Commissions are based on the sales volume of the weaker of the two legs, encouraging balanced team growth. This is a recruiting-centric strategy.
- Matrix Plan:
- Structure: This plan limits the number of distributors at each level in a distributor's downline. A common configuration is a 3x9 matrix, where each level is three times larger than the one before.
- Earnings: Distributors earn from each person within their matrix, incentivizing them to fill their matrix with active members.
- Stairstep Breakaway Plan:
- Structure: Distributors advance by meeting specified sales volume or recruitment goals. Upon reaching certain criteria, a distributor “breaks away” from their upline.
- Earnings: Earnings are based on group volume until breakaway; after that, earnings come from one’s own group and the groups of each breakaway unit.
- Hybrid Plans:
- Structure: These are a combination of two or more types of compensation plans. For instance, a unilevel plan might have a binary structure for initial levels.
- Earnings: The earnings depend on how the plan combines the elements of the other compensation structures.
- Generation Plan:
- Structure: This plan is based on the concept of generations. A generation is a whole volume from upline to downline (this may vary from company to company).
- Earnings: Distributors earn commissions from their 'generations'. This plan is beneficial for those who have succeeded in building a large downline.
- Party Plan:
- Structure: Designed primarily for companies that sell products at home parties. Sales representatives host these events and sell products.
- Earnings: Earnings are based on direct sales to customers at these parties, and sometimes on sales made by other hosts they recruit.
Each of these plans has its strengths and caters to different business strategies and product types. The choice of a compensation plan can significantly impact how a direct selling, social marketing, or MLM company operates and grows. We'll help guide you through the options or design something completely different!