Awhile back, I was talking to a friend of mine who was very frustrated because a very large group of distributors had up and left his network marketing companyecause they had found a better commission plan, whatever that means.
It is an old story really--distributors jumping from one company to another because they have find the hot, new product, or the next greatest commission plan ever. This dilemma always raises the question, "What can a company do to prevent the loss of distributors?"In my experience, this question points out a most interesting challenge for an MLM company. Distributors join a company because it has a great product and/or commission plan, but they stay with it long term because it has great training programs and other services to help make them successful.
Now, before you tell everyone I have lost my mind, hear me out. There are lots of companies with great products, and if you have a really great product, then other companies will work night and day to create a product that is similar. As a result, there will almost always be another MLM company out there with a competitive product.And, if you create the greatest commission plan the world has ever seen, then any other company is free to duplicate it. So, if a company tries to create distributor loyalty solely on its product or commission plan, there is always a company who can pay out 1% more or something.
What do successful companies do? They create training programs. They implement personal growth and development programs. They put systems into place to help distributors build their businesses, including programs to find and keep retail customers. As they do these things, they make sure they are not easy to duplicate. These intangibles become the little ties that bind distributors to a company; they make distributors' jobs easier by giving them the tools to do their tasks. Do these things replace a great product and a well designed commission plan? No, but they allow a company to constantly increase its competitive advantage as time goes on by improving these systems and programs, making it more difficult for another company to raid their organization.
Think about it--if all your distributors' training comes from your company, and in fact, the tools and techniques they use to build their business come from your company; you are no longer just the supplier of their product, you are their full business partner! If these distributors are recruited by another company, most of them will think long and hard before giving that up.
Does this philosophy work? Look at companies that have been successful for many years and you will see they use this three-part strategy:
- Successful product
- Well-designed commission plan
- Services to help their distributors.
It is the tried and true strategy in the MLM industry.