Sorcery In MLM Comp Plans

I've said it again and again, “If you want to build a network marketing business that’ll pay your children’s children, then you must know what’s in your Policies & Procedures (the contract between you and your company).

Richard Dennis didn’t read the P&Ps, and if you repeat his mistake what happened to him could also happen to you.

Author of the tape, “Dead Doctors Don’t Lie”, Richard learned the value of reading the P&Ps the hard way. He built a very lucrative customer base to the pinnacle of the compensation plan in a particular MLM company.

That business Richard built was so lucrative that the company he represented decided one day to review their contract with him (the Policies & Procedures).

"Oh now Richard, you don't really need all that money."

It seems the company lawyers found a clause that gave the company the power to finagle the compensation plan to a completely different structure, AND eliminate all those pesky distributors … including their highest paid rep, Richard Dennis.

This one little clause caused Richard's $40,000 +monthly income to flat-line.

So, is it important to read your company's Policies & Procedures? According to Richard Dennis it is absolutely critical to read the Policies & Procedures before you put your blood, sweat, & tears into building a MLM business.

Failing to do this one simple thing gives the company the advantage. According to Richard, "They will use it if they think they need to."

I appreciate you,

Bill Tessore

When Should You Join A MLM Company?

In "MLM Golden Goose … Or Mud Duck?" I introduced the first of the 5 Pillars for Success in a network marketing company. Just like any physical building, if a network marketing company does not have all five of these components in its foundation the chances of you building a walk-away income of your dreams are slim to none.

Timing in a company and timing in the industry is the second most critical pillar for your success in a MLM company. Industry trends can create massive growth in a company … when the timing is right. Take Excel Tele-Communications for example.

1. The Shake-Down Phase

Excel Tele-Communications was a network marketing company that purchased blocks of long-distance telephone time at wholesale rates and then re-sold them to distributors and their customers for much less than the big Bells could.

In Excel's first two years, they had a lot of growing pains. The worst was the major Bells' refusal to switch customers to this new, wholesale rate service. It took lots of time, money, and Congressional action to force them this change.

Many distributors lost money and quit because they jumped at the cry of “Ground Floor Opportunity”". Two years created a huge difference for those who waited out that shake-down period.

2. The Momentum Phase

Once the Bells complied with the Feds and all the other start-up problems had been worked out business began to pick up. Trend savvy heavy hitters began building with Excel. Times were very good. Predictably, lots of people made lots of money for a while.

3. The Fizzel Phase

Then the bottom began to drop out of the industry with the introduction of the flat-rate service trend. Excel’s bubble began to fizzle down to nothing.

Excel was destroyed from within by greed and corruption. This and the Enron Scandal aside, the new flat-rate service industry trend signaled the need for Excel to make huge changes for survival.

Without those adjustments Excell would have still died.

Profit margins in the long-distance telephone industry had gone the way of the dinosaurs. Today the trend is service bundling. Even flat-rate alone is just not enough any more.

Timing in a MLM company and timing in the industry is absolutely critical to achieving your long-term goals and survival. If you want to build a network marketing business that will pay your grand kids, then you must be sure the timing is right.

Get in too early and you’ll lose your shirt because no one really knows what’s going on. Get in too late and you’ll go broke due to lack of interest.

You must wait until the timing is right, then act with vigor and a solid plan for success.

I appreciate you,

Bill Tessore

Where Is The Company's Loyalty?

In my previous post "Location, Location, Location" I shared a simple way to tell if the leaders of a MLM company have experience with integrity in the network marketing industry. Greed and ego are intoxicating forces which can spell serious trouble for you.

The most vulnerable time in your network marketing career is when you are considering where to make your home. So here's another field sobriety check to see if the leaders are competent to be in the driver's seat.

The Loyalty Test

Some people get all excited when they learn a company is publicly traded. Why?

1. Qualification for publicly held status is very rigorous.
2. "There's financial power in investor backing".
3. #1 and #2 offers the company leaders bragging rights.

The Fall From Grace

A friend of mine who I'll call Rick had an experience with a MLM company that went from privately held to publicly traded. The company owners and executive officers were great at what they did.

They used their leadership and skills to help that company become a booming success. Rick and everyone else really liked these people. Since Rick was their top income earner these people really liked him too.

Theirs was a perfect match. Then one day that company became publicly traded.

The owners and executive officers were still nice, good people. And they really thought this move was right … until the new board of directors that came with becoming publicly held started making demands.

The investors didn't know the distributors and they didn't care to. The board's sole interest was the investors' profits.

Simply stated, assuring long-term residual income for the distributors was not in the board members' job description.

This conflict of interest caused the owners and corporate officers to lose control of the company. It didn't stop there. The distributors were eventually kicked to the curb when the board and the investors they represented summarily "discontinued" the compensation plan.

Many distributors, including Rick, lost everything they'd built. As if to add insult to injury, the thirty-day written notice to Rick and his comrades told them this action was called an "enhancement". I'm sure a few investors got a couple of chuckles out of that.

So what's the point here?

People build network marketing companies, not investors. MLM is a relationship business and long-term relationships are built on trust, integrity, and concern for others.

Publicly traded companies are controled by people with but one goal. That one goal is profit. They cannot afford to know or care about you the distributor.

I asked Rick if he would ever build with a publicly traded company again. He very quickly said, "NO", and I don't suggest you should either.

I appreciate you,

Bill Tessore