 |
||
 |
 |
|
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
 |
||
|
|||||||||||||||||
|
|
|
|
|
|
|
|||||||||||
|
|||||||||||||||||
by Todd R. Bates |
|||||||||||||||||
"The knee-jerk response to a three-level plan with a 45% payout is that it won't pay. Here's the truth...MORE commissions are paid to MORE distributors. Break even occurs weeks or months earlier. Full-time incomes can be achieved with a fraction of the distributors necessary compared to most other plans." -- Outback Secrets International |
|||||||||||||||||
The wave of TODAY and the future is compressed compensation plans. It's happening because the concept and dynamics of the compressed plan directly meet the needs of the largest segment of the network marketing industry---the part-time distributors. Their needs? Obviously to make money! They must develop profits in a short period of time from the small group they are able to recruit in that short period of time. Then, you know what can happen? They can actually stay with the program and go get more people and develop a larger bonus check. WOW! What a great concept---a compensation plan designed for the masses---the part-timers. Put that legitimate compressed plan with outstanding products; a stable, long-term company; and a total duplicatable support program. Sounds like the four essential elements required for success in network marketing for part-timers. Who wouldn't want a program like that? The Wave4™ Trend In network marketing, progressive companies are changing and evolving to meet the challenges of today's marketplace. There have been many changes in the industry throughout the fifty plus years of network marketing. Finally, the evolution of compensation plans is such that part-time distributors can benefit. If you know much about the industry, you realize that part-timers really have NOT done very well from a profitability standpoint. Of course, don't discount the personal growth, health benefits, relationship-building, serendipity aspects they get! Come on now, I'm kidding! It's time that part-timers succeed FINANCIALLY in the business. In the May 1994 issue of Upline ® magazine, Richard Poe, the author of Wave 3, was asked, "Is there a wave 4, Richard?" His perceptive reply was: I think the next frontier of Network Marketing involves the compensation plans, where everybody will realize that comp plans can evolve, that they can be more--I don't want to use the word 'fair' in a socialistic sense, but that can be more money available to rank and file distributors who are doing a moderate amount of work." That's just what a compressed compensation plan does. It makes more money available to "rank and file distributors" (the part-timers) and compensates them for their part-time efforts. What a concept--part-timers making money in network marketing! Who wouldn't want that to happen? Compressed Compensation Plans Compressed compensation plans are NOT two-level plans. You and I both know that a two-level plan would not make sense. At least not according to the principles of the theory of network marketing. We want to take advantage of duplication, geometric progression, and alot of people doing a little bit each. There are " heavy hitters" who want folks to believe that compressed plans are only two levels. When they call them two-level plans, they either are trying to deceive or they just don't understand them. Most compressed plans are not two levels. A compressed compensation plan "concentrates/compresses" a major portion of the bonus override percentage payout into the top two or three levels. That benefits the part-timer. Some compressed plans focus almost exclusively on the part-timer. Others have very difficult qualification requirements to earn the overrides in depth that are reserved for serious networkers. These are "wolves in sheep's clothing" type plans. I'm involved in a compressed compensation plan that has tremendous balance for part-timers, full-time networkers and significantly, the company. Yes, it can be done. "Really Helping the Industry" Poe was not the only writer to identify and be sensitive to the needs of part-timers. In the January to April 1998 issue of Profit Now newsletter (formally known as MarketWave), Chuck Huckaby, the publisher, writes in his "Most Common New Comp Plan?" comments: "While record numbers now believe in MLM as a legitimate alternative to traditional business and franchises, I believe record numbers of people are experiencing frustration at being unable to make one thin dime in their MLM business!...The trend for comp plans to direct more money into the first 3 levels continues to appeal to distributors....From my own personal conversations with distributors, this type of plan seems to really be helping the industry....But not all companies are convinced of the wisdom of this straightforward approach." Are the companies, and let's add the "heavy hitters." not convinced of this straightforward approach because it's fair for part-timers? Do they not like it because it forces them to share the wealth with the "little guy"? If they would take the time to consider that the purpose of network marketing is to enable part-timers to enhance their quality of life with a part-time, home-based business income, wouldn't they like a plan that would accommodate part-timers? Well...not if it's at their expense! Nice job, Chuck! Way to say it so well. Justification for Compressed Plans Do you need more justification for the brilliance of a compressed compensation plan than it's designed for part-timers to make significant money on the small group of distributors that part-timers are actually able to accumulate as they work the business on a part-time basis? Some 90% of the people I work with are part-time! It's great to know the compressed plan works so well for them when they work well! This can actually be guilt-free network marketing! If you're a part-timer, don't worry about the "heavy hitter." If they don't like the compressed concept, let them go do some other plan. But do you understand why they would be putting the compressed plans down? You're right, they want the part-timers to join their programs. If a "heavy hitter" likes a program, there's a good chance it's well-designed for the "heavy hitters" and the company...but at whose expense? Len Clements, from his book Beyond the veil in the article "Kissing Up to the Heavy Hitters," provides some insight and further justification for compressed compensation plans: "Of the over 1,000 MLM distributors we have surveyed over the last three years, we asked what the primary motivation was behind their involvement in MLM. Fifty-one percent said 'to make money,' 46% answered 'to have free time,'....We also asked specifically what income level they wished to achieve in their MLM opportunity. Amazingly, over 86% claimed they would have been satisfied with only an extra $250.00 per month, or to only replace their current family income ($2,500 to $6,000 per month), but have one person work 20 flexible hours a weeks (sic) to achieve it rather than two working 40-50 hours fixed." That's pretty good justification for the concept of compressed compensation plans being designed for part-timers to make between $250 to $6000 per month. Len Clements adds, :So why are so many comp plans designed to pay out $100,000 to $500,000 per month to a handful of heavy hitters, and leave thousands of others broke and disgusted?" Great question! We who promote compressed compensation plans have figured this out! Len Clements Proposes Compressed Plan In his article, "Kissing Up to the Heavy Hitters," from MarketWave newsletter June 1993 Len Clements proposes the solution for the majority part-timers. He writes: "So what's the answer? Exactly what is this plan that could achieve such a sharing of the wealth, that would be so unattractive to heavy hitters? Our long time subscribers have seen this before, but here it is again. Three levels (you got to be kidding! you can't make money in a three level plan) that pays 2%, 3%, and 40% (only 45% total pay out?--ho hum),..." Len Clements didn't just propose this compressed compensation plan in his article, he was the consultant to Outback secrets International which implemented Len's idea. The quote at the beginning of this article is from Outback Secrets marketing sheet. Read some additional justification of compressed plans from the Outback Secrets marketing sheet: "With all the commissions shoved right up front, and with practically token qualififiers to achieve the maximum pay out, break even can occur with as few as four or five distributors....Just a comfortable full-time income, with the time freedom and control to enjoy it, is the real dream of most network marketers. This plan is designed for them, not the few that seek great wealth....More distributors making more money sooner means more distributors staying in the program - and more joining below them!" Pretty darn strong justification---that is if you are concerned about the part-timers in the business. Of course, the marketing verbiage follows what the survey that Len Clements conducted reveals. Not surprisingly to me as Len was the consultant to Outback Secrets. Refinement of Compressed Plans As in all compensation plans, there has been evolution and refinement to the compressed compensation plans. Some of it has been positive for part-timers, and some has been of the "smoke and mirror" variety. That means that it's important to analyze the entire plan and have a good understanding of how it works and not just focus on the overrides that are available on the top two or three levels. Evaluate and analyze! Not all compressed compensation plans are of equal value and worth to network marketing distributors. Len Clements made a transition with the Network Marketing Publishers Alliance to another compressed compensation plan program. In the early stages, Beverly Hills International paid 1%, 1%, 45% on the first three levels--clearly a compressed concept. It had a pay out that went through seven levels, indicating it was not a two or three-level pay plan. It was compressed with approximately 70% of available overrides in the first three levels. Len Clements said of this plan, which supports the compressed compensation plan philosophy, "If every MLM company would adopt a plan like this, front loading and stock piling would be wiped away forever! And your prospects would actually understand the plan the first time you explain it. How many MLM compensation plans can you say that about!" As compressed compensation plans help eliminate front loading and stock piling in addition to enabling part-time networkers to make profits in their network marketing business, the industry as a whole can take on a positive image. Yes, we can change the all too frequent negative feelings and experiences part-time networkers have in network marketing. The simplicity of some of the compressed compensation plans is very gratifying. People can understand how the plan works. They can do a cash flow analysis. They can determine that they can make money on their part-time efforts prior to making financial and time commitments. That's how people do business in the traditional sector. That's how we need to teach people to do business in the network marketing sector. The enhancements and refinements that are made to compressed compensation plans are really a positive happening in the industry---certainly for part-time networkers! Protector of the Part-timer Appropriatly-designed compressed compensation plans are a protector of the part-timer. A business associate and friend of mine has also been labeled "Protector of the Part-Timer." Let me conclude with a quote from David Nelson that reinforces the benefits and advantages of compressed compensation plans. "Compressed compensation plans are specifically designed to help the part-timer make money and be successful. Over 95% of the people get into network marketing because they want to make money and some 90% are part-timers. If our part-time people can develop a positive cash flow in their first 90 to 120 days, then we can have them with us forever. And even though full-timers make money with compressed compensation plans, they do not make money at the expense of the part-timers. The concept is a beautiful win-win- win relationship. Compressed compensation plans are great for network marketing because until the part-timers can make a respectable and consistent income, this industry won't reach the heights that it's capable of! I love network marketing! I love the Wave4™ compressed compensation plan!" You can certainly see why I also love the compressed compensation plan. It's the wave of TODAY and the future! Take advantage of the wave! Come ride the wave!
About the author Todd R. Bates is a full-time network marketing professional. He is fully committed to network marketing and firmly believes that the industry must continue to move in the
direction of simplicity and fairness for part-time networkers. Prior to network marketing Todd was a Sales Mgr, Sales and Marketing Trainer, and top sales rep for Coleman Spas, Hot Spring Spas and Sundance Portable
Spas. Todd is one of the top distributors in For-Mor International and a co-founder of The Discovery Group™. He lives in Castro Valley California with Sophia and their two children, Angie and Jonas. Todd can be
reached at (510) 581-3970 or email at
|
|||||||||||||||||
 |
|||||||||||||||||
