Turning Maintenance into Profit
Let’s face it. No one likes forking out money even when they are making millions. What is Maintenance? Maintenance is the sales volume a distributor has to buy from the company (or minimum group sales in some instances), in order to fulfill conditions set out by the company such as:
• Prevent demotion
• Generating group sales volume
• Entitlement for commissions or overriding downlines
• Eligibility for bonus pools paid either quarterly, half-yearly or yearly
• Minimum order to maintain a high rank (leaders who are earning more are
expected to purchase more products)
But the most important factor of all is that network marketing companies need to make money as well.
Regardless of whether the company determines maintenance to be mandatory (therefore they enforce auto-ship in order for the distributor to be in business), optional or have no maintenance at all, the key point to remember for all parties to be successful is that VOLUME must be created. In other words, everybody needs to buy something!
Now I will share with you a little trick how to make everyone pay maintenance willingly without having people to fork out money grudgingly.
The trick is to work depth.
If you want all your people to do maintenance, the simplest way is to go all the way down
in your organization and help the newest people to build the most volume. Don’t worry
about volume in the middle. If the person at the deepest level generates a large sales
volume that month, do you think all his uplines all the way up to you will make a lot of
money? Now, if they are making money, do you think they will have trouble paying
This works no matter what plan you are in! People get more fired up when they see
people at their deepest levels moving because depth gives more security. If the
company doesn’t require maintenance, then they will still willingly buy products because
they will be making more money and buying products allows them to increase their
percentages so they can override more! This will cause a chain reaction all the way
upline and suddenly you will have volume bursting from your entire network!
Downline Building Strategies
A good leader will never stop building depth within his networks because attrition occurs when the one at the bottom drops out and the same chain reaction occurs: only
backwards. Suddenly you will have no one left in your organization.
No recruitment = No income No income = No Maintenance
No Maintenance = No volume
No Volume = NO PROFITS!
No matter how far down your downline is or how little you are paid at that level (sometimes you may get even less than 0.5%) keep helping them generate the volume and make money. Don’t pass the baton of leadership to your downlines too early and expect them to build depth for you until you know they are truly ready.
This point can never be emphasized enough even if I have to repeat it 10 times: Teach your people to use and love the product!
Maintenance is usually an issue with distributors when they have NO MONEY to maintain or DO NOT LOVE THE PRODUCT. Cut down your expenses in the supermarket if necessary to sustain your business. If your business sells vitamins, buy from your own company instead of the pharmacy. If your business sells health drinks, buy from your own company instead of the supermarket. Once your people make the product a part of their lives, they might even buy more products from the company than the minimum auto-ship.
Starting your Own Company
There are pros and cons of having maintenance and not having maintenance.
Remember these few principles when designing your own marketing plan:
1. No Maintenance takes the pressure off new distributors financially because they
don’t have to spend money. This minimizes attrition at the beginning.
However, if your organization is very large and nobody is maintaining, you will
have to concentrate more on recruiting new blood (because new people pay
higher entry fees). High level distributors might even quit and bring their entire
networks elsewhere because he is not developing residual income (no volume
generated monthly). Unless you have a fantastic product, make sure you enforce
some form of maintenance. You don’t want just one-time sales only.
2. Don’t force too high a maintenance on your distributors at the start. You can set
up a system that gradually increases the minimum maintenance as the distributor
climbs up the ladder. You can even make maintenance optional and still allow them to draw commissions but not bonuses (which requires maintenance to be activated). Design a plan with an easier learning curve.
3. One other way is to use a variation of an auto-ship system which automatically
deducts your commission to use for mandatory maintenance ONCE their
commission exceeds the maintenance amount. This system is good because you
don’t need to collect money from the distributors or members, and the system
runs automatically. I would recommend this type of system more for Internet
based network marketing companies which deals with digital products.
Next post: Other factors to Consider (this will be the end of these posts!)
Until then, see ya later…