Believe it or not, building and growing a successful MLM business means MUCH more than developing a great product and compensation plan. In fact, there are 5 pillars of an MLM business and, to guarantee success, you need to focus on all 5 of them equally.  

It is for this reason I have developed a basic score card. The score card measures the 5 key disciplines that will make or break your business.  The columns reflect the discipline, the maximum score that it attracts, how your company performs and what percentage of your team will be motivated by it. The aim is to get 20/20 for each discipline and thereby run a 100% MLM business.

I have consulted to many companies with a score card like this. Their management will usually start by telling me how amazing their compensation plan is and then expressing total incomprehension as to why their company is failing.

Everyone is different. The fact that you are driven by money does not mean that everyone else is. As a matter of fact, only 20% of your people will be driven by money. If all your focus is on the money and the product than you can be assured of motivating a maximum of 40% of your network.

 

5 Key Drivers

Max Score

Your Score

% People

The Product

20

 

 

The Compensation Plan

20

 

 

The Recognition Strategy

20

 

 

The Incentive Program

20

 

 

The Social Responsibility Strategy

20

 

 

 

100

 

 

 

The Disciplines

1. The Product

2. The Compensation Plan

3. The Recognition Strategy

4. The Incentive Program

5. The Social Responsibility Strategy

Each of these has a score of 20 in your organisation which gives you a total of 100 possible points.

A successful MLM business performs at 100% in each of these disciplines.

The Products
It is not enough to simply leave the network to decide on the strategy. A powerful marketing strategy needs to be developed by the company for the product range. You have a wonderful opportunity to educate your team. Make sure that they believe in the products. Provide high quality marketing support in the form of brochures, a website and, where possible, product samples. Create a below-the-line and above-the-line advertising campaign. The more you do to create product recognition and credibility in the market place, the more likely you are to build a successful network quickly.

NB! At least 20% of your network will be driven by the love of the product.
Measure your product marketing strategy critically and give yourself a mark out of 20.

The Compensation Plan
Choosing or developing  the correct compensation plan is critical. Your decisions in this area can have unexpected, far reaching and highly detrimental consequences. A great many MLM start-ups come to me with a plan that they have gleaned from some or other MLM company. They have no idea what behaviours the plan drives and are unaware of the long-term implication. It sounds cool and they understand the mechanics, so they charge blindly ahead.

I have been called into many meetings with big companies who are trying to change their compensation plan. They regret bitterly their choice of plan as it is driving all the wrong behaviour, creating  incorrect structure and paying out too little or too much. In ignorance, to save some money or for the sake of expedience, they copied a plan from some other company. This is the exact plan that some enthusiastic new start-up company is blindly adopting.

I recommend you get an expert in to advise you. The compensation plan is a critical part of your success and it needs to be perfect out of the blocks.

NB! At least 20% of your network will be driven by the money.
Measure your compensation strategy critically and give yourself a mark out of 20.

Recognition
Your recognition strategy requires the same amount of planning, effort and energy as your compensation plan. It is a key driver of behaviour and the companies who do this aspect well put themselves ahead of the game.

Recognition should be automated in the same way as your compensation plan. If a person achieves the required performance criteria then your systems should flag them for recognition. Your team must understand clearly what is expected of them and what the resulting recognition will be.

Rank, status and performance should be recognised in as public a way as possible. Give out pins, get your people up onto the stage, publish their names on the website.

NB! At least 20% of your network will be driven by the recognition.
Measure your recognition strategy critically and give yourself a mark out of 20.

Incentives
Design your incentives to be achievable. A new distributor will be driven by a small incentive that can be achieved far more than a trip to Hawaii that is out of his or her reach. Take each group, decide on what behaviour you want and then set your incentives in accordance.

In some cases a number of small monthly incentives can be more effective that one large annual incentive.

NB! At least 20% of your network will be driven by the incentives.
Measure your incentive strategy critically and give yourself a mark out of 20.

The Social Responsibility Strategy

Social responsibility is a key driver for many people. They want to be part of something bigger than themselves. They want to feel significant. Align yourself with a synergistic cause and get your people involved.

NB! At least 20% of your network will be driven by social responsibility.
Measure your social responsibility strategy critically and give yourself a mark out of 20.

 Score Example

Let’s say you have a great product and associated marketing strategy, your compensation plan is unsurpassed but you have not focussed too much effort on your recognition or incentives. You also have no social responsibility program.

In this scenario your score card would look as follows:

5 Key Drivers

Max Score

Your Score

% People

The Product

20

15

15%

The Compensation Plan

20

15

15%

The Recognition Strategy

20

5

5%

The Incentive Program

20

4

4%

The Social Responsibility Strategy

20

0

0%

 

100

45

39%

 

I have consulted to many companies with a score card like this. Their management will usually start by telling me how amazing their compensation plan is and then expressing total incomprehension as to why their company is failing.

Everyone is different. The fact that you are driven by money does not mean that everyone else is. As a matter of fact, only 20% of your people will be driven by money. If all your focus is on the money and the product than you can be assured of motivating a maximum of 40% of your network.

Study any of the big MLM businesses and you will see that they are all 100% businesses. They embrace each discipline as if it were the only driver in the business.