Does Your Companies Comp Plan REALLY Matter?

1 replies
I recently had a discussion with a fellow network marketer about comp plans and how you need to look at your companies comp plan in terms of how many people you must recruit to make say $10,000 per month.

He argued that a company where you could make $10,000 by only sponsoring 400 people was a better company to be in than one that required 2000. I disagreed with him and stated that the comp plan in the long run is not all that relevant.

Let me explain, statistics show that the average person in network marketing recruits only 2 people, now none of us on here are average, so let's say that you recruit 5 and they each recruit 2 who recruit 2, etc. If we assume that everyone gets there recruits in the 1st month after 12 months, you would have a downline that is over 10,000 members. At that point in any organization you are making boatloads of money.

There are other factors that are way more important than how many consultants you have to recruit to get to $10,000. What is the cost of your product and how easily will it be to recruit enough people to make $10,000 (or whatever you magic number is) Do you have to count on your consultants monthly auto ship to drive your paycheck, or do you have a product that you can easily sell to the general public?

I know I'll get some arguement from the MFF folks out there on this, I think it is more important to maximize the pay plan that you have then to be constantly shopping around for the bigger better deal. There will always be an opportunity that may appear to be better than where you are, ultimately it comes down to you and how committed you are to yourself and acheiving your goals.
#comp #companies #matter #plan
  • Profile picture of the author trafficwave
    IMO, the critical factors include the product or service itself and the management team/business model.

    Is there a market for the product or service by itself? If people would buy it with or without a comp plan, that's a big plus. If they are buying it solely because of the comp plan, your days are numbered.

    If the product is overpriced just to make room for a comp plan, your days are numbered.

    If the management team is inexperienced (or worse ... has a bad track record), your days are numbered.

    Take a company that has poor market demand, bad management, and a weak business model ... slap on an "amazing" compensation plan and what you have is lipstick on a pig. The company will fail.

    Ideally, you should have a mix of strong market demand/responsiveness, a proven and stable management team, a profitable business model, and a compensation plan that fairly and accurately rewards productivity.
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