If you’re working on rewarding distributors in your direct selling compensation plan, it’s easy to focus on things like which rules you’re using or if you have the right core commission. But knowing whether or not you’re motivating the right behaviors actually has a lot less to do with perfecting all of your requirements and a lot more to do with really knowing your distributors and customers.
So, we invite you to take a step back and look at the actions you really value in your business. Is your compensation plan truly geared toward promoting and rewarding the right behaviors? And how can you tell?
ACTIONS TO REWARD
Even though every MLM compensation plan and company is different, most of them share a need for their distributors to take these four basic actions:
Attract new customers
Attracting customers is one of the most important actions taking place in your business—customers generate sales and a steady earnings base for distributors and your entire organization.
It’s important that all of your customers feel valued and are getting what they need so they can continue purchasing your products.
Enroll new distributors
Growing your distributor field is also important, since a greater number of distributors can form a more solid support network and continue to attract new customers.
Train and support distributors
This is especially important for your newest members, but all distributors benefit from ongoing training and support. As your company’s offerings, rules and policies change, it’s important that every distributor is in the know and can get help when they need it.
Each of these actions are crucial for running a great MLM. It’s important that every distributor builds their organizations with trained, happy new recruits and customers, but also that all of those new people are supported and taken care of.
KEEPING TRACK OF PROGRESS
It’s great to say that you should encourage more of these actions in your organization, but how can you know if you’re really doing it? The key is knowing your metrics. Here are some things you can look for regarding each of the actions above to follow and measure your progress:
Attracting New Customers
This one seems pretty simple at first—to know if you’re attracting new customers, track the number of new people that are buying your products. But make sure to drill into this metric to see what’s really going on by comparing company-wide numbers to individual leader groups. Is one leader doing most of the work? Do you have growth hotspots that are skewing your numbers?
Customer support is harder to measure, but not impossible. You can start by looking at activity and retention. How long do your customers stay engaged? Do certain distributor leaders have more or better engaged customers? Why? Are most new customers purchasing subscriptions, or do they favor smaller products? Do leader actions and promotions reflect what your customers need and are interested in?
Enrolling New Distributors
Similar to tracking your customers, you can measure enrollment by keeping tabs on the number of new distributor sign-ups. Again, make sure you’re tracking this metric company-wide and in your leader groups to get a better picture of how you’re doing.
You can measure distributor support by tracking their retention rate and monitoring the number of advancements you see in your plan. And, by seeing how this works for groups under specific leaders, you can compare that data to retention and advancement rates organization-wide to find trouble spots.
WHERE TO FOCUS YOUR EFFORTS
Now that you’ve started monitoring the data around those actions your distributors and customers are taking, how do you know where the issues are? Can you do a better job of rewarding important activities?
To find trouble areas, start by deciding on benchmark numbers for healthy actions to compare to the data you find. Once your goals of healthy, direct-selling activity are set, you’ll be able to make informed comparisons.
If the performance of your smaller, leader groups in one metric is a lot different than the numbers you’re seeing organization-wide, it’s probably best to focus on improving your training. Making good practices more standardized among your salesforce will help you level out that variance.
If your numbers don’t fluctuate much across your organization but are lower than you want to see, chances are the issues are stemming from something at the corporate level—either your comp plan or the business-building methods you prescribe to your salesforce.
Remember, too, that if you find numbers that meet your goals initially, you’ll still need to dig deeper to understand those actions on a smaller scale.
REWARDING THE RIGHT BEHAVIORS
Now that you know where your best-performing distributors are, you can give better rewards to the people that are making the biggest difference in your organization. Giving credit where it’s due will set a great example for budding distributors and help establish productive patterns throughout your salesforce.
So, is your compensation plan rewarding the right behaviors? Many direct selling companies are missing out on the opportunity to find out by not paying attention to their commission data. If you can begin to take a focused look at the numbers that drive your business’s most important actions, you can really see if you’re rewarding the right behaviors and where you can work on your strategy to do that better.
To learn more about InfoTrax and getting the most out of your data, explore our commission software options here.