K.I.S.S. (relatively speaking…)
After having worked with every type of compensation plan imaginable over the years, we’ve learned a few things along the way. We’ve seen many MLM companies make it big and even more go the way of the dodo bird. Granted, not every company that has a poor compensation fails… and likewise, not every company that has an awesome compensation plan succeeds. But there are a couple key factors to watch for when just starting out.
Designing your compensation with these concepts in mind will make your life much easier down the road and may just provide that critical difference in determining whether your startup company survives infancy and adolescence and becomes an industry success story or crashes and burns shortly after takeoff. This article isn’t designed to tell you what kind of compensation plan you should pursue, whether it’s a unilevel, binary, forced matrix, 2-Up or any of the dozens of hybrid combos out there. We’re not going to get into the argument of whether you should pay more commissions to the “little guys” or more commissions to the “leaders”. We’re not going to tell you how to apply your caps or how much you should be paying out on a monthly basis. Those are all topics for another day. Instead, we’re going to focus on something a bit more fundamental.
First and foremost, if you remember nothing else, when it comes to designing your compensation plan: remember K.I.S.S. (Keep It Simple Stupid). Leonardo da Vinci once said, “Simplicity is the ultimate sophistication.” We all know that compensation plans can be inherently complex “beasts” to begin with—but relatively speaking you don’t want to too far outside the box when it comes to comp plan complexity. The bottom line is that if your top leader can’t successfully explain your comp plan to your average prospect within five minutes on a napkin in some restaurant, you’re in for potential problems.
For those that believe they have the latest and greatest bonus enhancements to comp plans since sliced bread (or maybe binaries or infinity bonuses), here’s another interesting thing we discovered: leaders will need to buy off on your creation and be comfortable pitching it… or you are sunk. Years ago someone came to me with the most unique compensation plan which appeared totally groundbreaking. It had seemingly solved all the “industry problems” but it was so unique that nothing like it had ever been done before. It combined the best of binaries, unilevels, and Australian 2-Ups, while simultaneously eliminating their weaknesses, and put it all together in this monster hybrid plan that was truly mind blowing.