A while back I was talking to a friend of mine who was very frustrated. A very large group had up and left his company. The distributors left because 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 found the new hot product, or the next “greatest commission plan ever”, which always raises the question what can a company do to prevent it?
In my experience this question points out a most interesting challenge for a company and it is this. Distributors join a company because it has a great product and/or commission plan but they stay with it for the long term because it has great training programs and other services to make 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 so there will almost always be another 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 product or commission plan, there is always a company who can pay out 1% more or something. So what do successful companies do? They do things that are not easy to duplicate. They create training programs, they implement personal growth and development programs, they put into place systems to help distributors build their businesses, ways to find and keep retail customers.
These intangibles become the little ties that bind distributors to a company; they make a distributor’s job easier by giving him the tools to do his job. 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 programs and systems and making it more difficult for another company to raid their organization.
Think about it, if you have a distributor, who is being recruited by another company, but all of their 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 and most distributors think long and hard before giving that up.
Does it work? Look at companies who have been successful for many years and you will see they use this 3 part strategy, successful product, well designed commission plan, and services to help distributors, it is the tried and true strategy.
Mark Rawlins