Science Behind the Pay Plan - Page 7
The third type of product focused company is one that actually designs the features of the program to naturally attract product focused distributors. These programs will have higher quality products and generally have "flagship" products that are more cutting edge and exclusive. These companies will provide marketing tools, state-of-the-art systems, effective literature, credible endorsements, comprehensive customer service, and other features that target tier structuring. The end result is progressive growth and lasting success at the distributor level.
There are a number of individuals who have tried traditional programs and failed to earn an acceptable income. These individuals have concluded that the programs didn't pay enough. To an extent, this is true. As I mentioned, a number of traditional companies used the product focused philosophy to hide a poor pay plan. Traditional programs have a tendency to pay too little up front. This does make it more difficult for the start-up part-timer. On the other hand, exaggerated compressed programs have used the "up front" philosophy to hide inferior products or a poor marketing strategy. Remember the break-even ratios that I previously shared in this synopsis. The programs that pay the highest up front still had 75% percent of their participants unable to break even on their qualifying purchases. The traditional programs had a "break-even ratio" of 10/90%. The difference between the two extremes is only 20%. We still have the minimum of 75% of the distributors dealing with the profit issue. Paying more money up front is only part of the answer. Placing too much money up front only worsens the problem as I have already explained. The answer is a balanced marketing plan, more effective training, better support, and tier structuring, which means bringing more product users into the program.
Even the individual who has difficulty achieving success in network marketing can be successful under certain conditions. They should join a program during its infancy that has the type of products and strategy that will eventually attract and retain a great number of customers and product users. These networkers must have the type of training available that will assist them in learning to become true networkers who progressively develop their marketing skills. Programs that are seriously flawed encourage networkers to reach for "super systems" and "gimmicks" to compensate for the flaws. Circumventing effective training through gimmicks will spell certain doom. Initially, these tactics will create growth. This growth will be short-lived. Systems can be helpful but cannot generate enough enrollments to create a large number of marketers successfully. A few heavy hitters will be the only ones that benefit from a system alone. Without a viable program and the proper training, the cluster of "well wishers" will eventually perish. Achieving and maintaining success requires participation from a majority of its participants. Success in networking marketing is based on teamwork. Anyone who believes they can ride a system to success without working and learning how to effectively market it, will find that success short-lived. Downlines must be nourished and "cultivated" or they will not last. Everyone must learn to do his or her part. Systems are tools that do not stand alone but must be designed to compliment sound business building techniques.
Once you understand these principles, you will know what to look for in a program. Companies that have developed marketing strategies that address each of these factors will become giants in our industry. There has been a tendency for traditionally structured companies to neglect the pay plan factor. This has led to unnecessary attrition of networkers who could have otherwise been successful. Many of the large traditional companies have addressed the other factors well enough to attract these multiple tiers of participants. There has been a need for improved pay plans. Our company is a leader in this arena without compromising the other vital components. Companies that have overreacted to this need and placed to much money into the pay plan have done their distributors a disservice and produced inferior overall programs. Distributors in these "hyper-compressed" programs are experiencing difficulty in building successful organizations.
During my career of more than three decades, I have developed organizations in both traditional programs and compressed programs. I presently have approximately 75,000 in existing downlines. In my first nine months, I have engineered the development of a 9,000-member organization in this company. I selected this company because I believe it has achieved a balance between the two extremes. I find that the members in my company organization are experiencing a greater degree of success than members in the other programs, both at the "grassroots" and leadership levels. From a percentage perspective, we have more customers and product users in the company organization. This is a very healthy scenario. "Grassroots" distributors are sponsoring more easily and the ones that are building correctly (tier structuring), are experiencing success.
The company program is packed with compensation factors to complement the pay plan. These compensation factors allow the distributor to "leverage" the pay plan to the maximum extent. A compensation factor is any feature in the program that assists the marketer in generating more income. I will explain the pay plan and how it is synchronized with compensation features that make the company program very unique and positioned to be one of the leaders in the industry.
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