How companies can incentivize basic but critical business-building action.
Rewarding and Incentivizing a distributor field isn’t all about recognizing those long-term leaders who stay at the top. In fact, many companies are moving in the direction of rewarding and incentivizing distributors who achieve smaller, more attainable milestones based on the specific action steps companies want them to take.
Why It’s Important: Direct selling companies continue to face challenges in a gig economy. More opportunities to earn extra income on a part-time basis are increasing through the rise of Uber and Lyft, Airbnb, Upwork, Etsy, or just buying and selling through online marketplace platforms. These opportunities typically require little to no experience or investment, are based on individual performance, and their pay structures are simple to understand.
What’s Changing: Many companies are developing incentive and recognition programs to reward the more basic action steps and achievements focused on newer distributors. These incentive programs could last a week to several months. Several key factors make them work, but the overall goal is like any other incentive program: to create a culture where people feel valued, recognized and challenged while encouraging the behaviors that lead to long-term growth and leadership development. Companies also use these programs to train to the specific business-building practices they want distributors to take anyway.
Two Main Types Of Incentives: Results-based incentives involve hitting a bonus, enrolling a number of customers within a certain time period, personal sales volume, or sponsoring new representatives. Actionbased incentives could include handing out samples, making follow-up calls, or inviting people to watch an opportunity video.
What’s Working: “There should be a strong social connection between the recognized person and their peers,” says Dan Jensen of Dan Jensen Consulting. He also details a few fundamental characteristics of a successful incentive program:
- Align incentives with the compensation plan. Make sure people are not distracted from the comp plan.
- Incentives can change, so be prepared to change program budgets.
- Most incentive programs last about three months, longer for more expensive programs.
- Different incentives should reward different people based on actions and achievements in line with their experience level.
- Don’t just explain what to do. Teach people how to achieve the goals.
- Use incentive programs to gather info to develop future programs.
Industry Examples: Some specific examples for rewarding and recognizing newer distributors include a quick congratulatory call from a corporate leader, social media shout-outs, shifting more compensation payout to early achievements, a quarterly newsletter or magazine recognizing promotions and telling success stories, encourage field leaders to recognize smaller achievements that remain in line with larger corporate goals, creating achievable incentive trips based on personal action, updating the field on the race to achieving an incentive to encourage bursts of action.
How One Company Does It: MONAT President Stuart MacMillan shared some insight as to how they are shifting focus to reward those basic but core businessbuilding milestones. Early on, the company decided to shift a larger portion of the payout to new distributors, called Market Partners, who reach initial goals.
“We decided to put a disproportionate amount of the compensation plan payout to what we call Smart Start,” Stuart says. The Smart Start goal is to enroll four customers and one Market Partner in a month, then to duplicate that. Stuart refers to it as a “building block” approach.
“MONAT’s Smart Start payout plan shifts a larger portion of the payout to new distributors, who reach initial goals.”
“We knew it was important for people to be able to get a check,” he says. “We try to make sure the payouts are substantive at that point because it just drives people to do the next thing.”
MONAT’s corporate leaders determined that even earning an extra $500 or more per month would make a big difference for most families. So, they began changing how they defined and referred to terms such as “life-changing money.” Stuart says earning enough to cover a car payment or send kids to preschool could be quite life-changing for most families. That’s why the company now celebrates and touts the number of people earning at least $500 per month.
Competition and Recognition: MONAT has developed smaller competitions and incentive trips based on highly specific actions and goals. Larger, yearly incentive trips still exist, but some smaller trips, for example, are awarded based solely on personal sales volume. Stuart says this really reveals those who are taking the most action within a certain amount of time. It also evens the playing field for all Market Partners, no matter if they’re brand new or have been building a business for years.
“We have to recognize and reward behaviors that will lead to leadership down the road,” Stuart says. “They may be baby steps, but we know that they are behaviors that they can repeat and repeat.” He adds that since it’s difficult for new Market Partners to think a full year ahead, promotions geared toward newbies usually last 30 to 60 days.
MONAT also sends out a quarterly recognition magazine that profiles new promotions to certain ranks, and each is given equal space regardless of rank. The cooperate team also works closely with field leaders who create their own promotions and competition within their teams, making sure they match the company’s overall goals for the coming months.