Sustainability of the MLM Compensation plan

Other than the products a Direct Selling company is identified by the popularity or success of its compensation plan or the career plan.

Compensation Plan is the heart of the Direct Selling business eco system. It should ensure that the outflow in the form of earnings and rewards to the direct seller’s flow continuously and proportionately to the business inflow.

Hence the success and failure of a Direct selling opportunity to a large extend depends on the compensation plan.

It actually makes or breaks the business delivery.

Many a times the company leadership tends to take the designing of compensation plan internally with their basic knowledge of finance and help of few financial experts and direct sellers “leaders”.

Looking at only the basic profitability aspect of the business on a short term basis is the biggest mistake in such adventures.

There are various factors that come into play when one creates a compensation plan and Strategy India makes sure that none of these are missed.

  1. The design of the Compensation Plan has correlation with the product portfolio, pricing and target consumer segment.
  2. The pay-out spread should have “just” enough for all associated with the opportunity - from starters/beginners to senior leadership in the network
  3. The quantum of pay out excites the target audience to aspire and engage with the business on a long term as a career objective
  4. It is legally tenable and commercially viable
  5. It ensures and fulfils the objective of delivering higher product consumption in the short term or provide a long term career growth plan to the network, as the case may be
  6. It has long term acceptability, hence scalable both in price and volume and future proof
  7. It has international appeal and acceptability without changes, in case one desires to go global
  8. The implications of a comp plan are very dynamic and evolve with time and as business grow. Hence it cannot be developed without proper evaluation with time tested results and only by experts

Strategy India helps its clients through a team of experts to choose the right compensation plan structure based on the product category and business objectives.

The compensation plan (Single level marketing or Multilevel Marketing) are then tested and simulated for scalability and strength.