How Should Retention Be Rewarded?

March 13, 2016 By admin Leave a Comment

As a compensation plan expert, I’ve written extensively about the 12 key behaviors all compensation plans should motivate and reward.

The 12th behavior is staying active and engaged in the business. This is retention.

At the two Compensation Plan Schools I recently conducted in South Africa for direct selling companies, one of the attendees asked me how a compensation plan should specifically reward retention. After answering the question, I realized that you, too, may be interested in the answer.

What Is Retention?

Retention is staying active as long as possible. Activity is usually measured by the generation of personal sales volume.

Attrition is the opposite of retention. Attrition is a word that describes what happens when an independent representative stops generating personal sales volume (she quits).

How To Measure Retention

Retention is usually measured by direct selling companies in one or both of the following ways:

The count of independent representatives with personal sales volume over a 3-month or 6-month period of time.
The percentages of independent representatives who have personal sales volume in their second, third, fourth, fifth, etc. months with your company.

Many Ways To Grow

Independent representatives can grow the sales volume of their downlines by (a) increasing the number of independent representatives with personal sales volume each month, (b) increasing the average monthly amount of personal sales volume per downline consultant, and (c) reducing attrition or (d) recruiting new representatives.

The best way to grow sales volume is to do all of the above.

Should Retention Be Rewarded Specifically?

The answer is clear. It’s “no.”

If your compensation plan specifically rewards retention, you will experience undesired effects. In their quest to meet or beat your retention requirements, some of your representatives may choose to not recruit people they believe won’t stick with the business.

You don’t want to give your representatives any reasons not to recruit, because they can’t tell who will be successful in the business and who won’t. No one can.

If your compensation plan has volume and structure requirements, retention is rewarded in an indirect way. The higher the retention, the less necessary it is to recruit.

Jay Leisner, the President of Sylvina Consulting, is a top compensation plan and direct selling expert, a trusted adviser to new and established network marketing and party plan companies. For more than 30 years, Jay has enjoyed assessing and improving network marketing, party plan and referral marketing companies across the globe.

Jay Leisner and Victoria Dohr authored the top-rated book for new and young network marketing, referral marketing, and party plan companies, "Start Here: The Guide to Building and Growing Your Direct Selling Company".

Available in English and Spanish. This startup guide contains 250 pages of wisdom that will guide you through the right steps to start and continue on your journey to build a successful direct selling company.

You will save thousands of dollars and hundreds of hours of your time using the information you will read in our book.

In 1986, Jay began his career in direct selling by working for a major direct selling software provider. First as a software developer and later as a project leader and a business analyst, Jay worked closely with new and established network marketing and party direct selling companies to provide them with software solutions to meet their unique requirements.

Jay contributed in many ways to the success of large implementation projects for many companies. Jay also worked with dozens of smaller companies to assist each of them in various capacities to provide them with the systems they needed to help their businesses to grow faster.

Along the way while working with them, he learned the secrets of successful direct selling companies and the challenges faced by them. In true entrepreneurial spirit, Jay’s decision in 1999 to start Sylvina Consulting as a direct selling consulting company was driven by what he saw was a need for answers, advice, and solutions.

In 2004, 2006, 2009, 2014, and 2018, Jay gave presentations on compensation plans, recognition, and field leadership development at conferences held by the US Direct Selling Association.

He traveled to South Africa in 2015, 2016, and 2017 to conduct workshops on compensation plan design and recognition programs for member companies of the South African Direct Selling Association.

In 2017, Jay spoke at the Canadian Direct Sellers Association Meeting on the importance of recognition.

More than just a compensation plan expert, Jay is exceptionally skilled at advising new and established companies on business strategies. Before offering advice or solutions, he asks important questions to understand each client’s specific concerns and goals.

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