The best compensation plan in the world… (Part 1)


So, what is the best compensation plan in the world? Well, let’s look at all the factors. This issue is often the subject of much debate and conjecture, typically filled with trite cliche phrases like, “building deep is where the profit is” or “going wide is the key to a stable business.”

Is it really just that simple? Could I end my soap-box right here before it starts by leaving in your minds just these two simple phrases? Oh, how I wish. This decades old scuffle won’t end that easily, won’t end with this article and this topic wouldn’t be much of a topic at all to blog (read: rant) about if it really was that simple… now, would it?

No, this is not a simple topic. Many might tell you it’s simple by stating phrases like, “The binary is the best comp plan in the world,” or “I will only build in a matrix,” or “The first thing I look for in a company is to see if they have an Australian plan.”

Before we can “wash our hands” of these comments we have to first clearly understand:

  1. The evolution of MLM compensation plans
  2. Elements of the various MLM plans
  3. What elements (bonuses/structures) encourage which kind of human behavior
  4. How different MLM plans might function within different
    – demographics (old/young, male/female, liberal/conservative, etc)
    – product pricing (company cost & retail/wholesale pricing)
    – consumption behaviours
  5. How goals are critical in choosing the best compensation plan

So, over the next several months I will be elaborating on each of these areas more in depth. It’s a common question of those who spend an above average amount of time in MLM, “What is the best compensation plan?” New companies ask me this question all the time, as an MLM consultant and MLM Software provider. In fact, I probably have the “Comp Plan Conversation” 2 or 3 times each day.

To start, I want you to begin thinking about MLM compensation plans as vehicles, something that will carry you from one point to the next. If you will visualize your starting point and your desired destination, along with the various terrains that you will cross during your journey, I believe you’ll start to see compensation plans in a far different light than you do today.

What kind of vehicle do you drive? Truck, SUV, Motorcycle, Sudan, or a more Sporty Car? How do you get to work? Jet, Trolley, Ferry, or Bus? What kind of vehicle do you use at work? ATV, Delivery Truck, or Utility Truck? What other kinds of vehicles have their purpose? Helicopter, boat, jet ski, snow mobile, or heavy loader? All of these have some very similar fundamental ideas built into their construction, and no one can really make a solid case that each of those vehicles aren’t serving a solid and valuable purpose.

So, I’ve tipped my hand here and given away the whole premise haven’t I? Well, perhaps. I’m not sure any quality article on MLM compensation plans should start off with a singular compensation plan bias and an agenda to convince others about that plans superiority. I have witnessed very experienced and credible MLM experts (in their own rights) beat this issue to death, never once changing the mind of the other. Ultimately, each plan has it’s place.

Every individual will have a personal affinity toward a specific plan type that’s based on their individual passions concerning a product/service type, training style, and their own personal market place. For the course of these articles I want you to put those biases away, I want you to stand back from your passions just enough to get a good view of the other plans and how they work. You might find that there are far more similarities in some plans than you thought.

So, over the next few months I’ll discuss how the Matrix or Unilevel, Binary or Australian plan (1-up/2-up/x-up), or even how a hybrid compensation plan (a mixture of several different plans) fits into the world of MLM compensation plans. I’ll also discuss how the various bonus structures work into the whole equation: coded bonuses, infinity & generational bonuses, matching bonuses, CAB’s (customer acquisition bonuses), pool bonuses, car/vacation/mortgage bonuses, and simple title bonuses…. and do cyclers or straight-lines have their place too?

More to come… book mark this site!

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