Hostess rewards programs are an important element of party plan companies.  These programs reward people who invite friends and acquaintances to their homes who purchase products or services from a consultant.  Most often, rewards are free and discounted products.

Have you ever wondered why we don’t just pay hostesses money?

Here are 4 reasons we don’t recommend this practice:

Hostess vs. Representative

If a person wants to make money, we want that person to enroll as an independent representative.  We don’t want to offer money to hostesses because it may interfere with recruiting.

Cost

When you give a hostess free product, it costs you less than money.  For example, a $20 product may cost your company $5.  $5 is less than $20.

Hostess Orders

When a hostess spends some of her own money at a party, we make money on her purchases.  That money we make on her purchases helps to cover the cost of the free products we give her.

Hostesses Are Great Customers

If a hostess buys your products, she is more likely to buy them again.  We would like to have hostesses become repeat customers.  If a hostess is paid in money instead of free or discounted products, she is less likely to buy once and therefore even less likely to buy again.

Customer Behaviors

In our special report 20 Secrets of Successful Direct Selling Companies, the 13th secret is:

• Make your M.O. (modus operandi) multiple orders.

We want customers to buy again and again.  We can encourage and reward this behavior by providing customers with free products or product credit for their consistency in placing orders or for their total purchases over time.

We may also want customers to introduce the company’s products to their friends.  We can offer those who refer customers free products or free product credit when their personally referred customers make purchases.

Customer rewards are not dependent on a party’s sales.

The common thread throughout all customer programs is to reward customers for activities performed over a long period of time.  Think marathon.

Hostess Behaviors

Hostesses invite their friends to a party, whether held online or in-person, or both.  They earn free product credit and discounted product purchase opportunities, the amounts of which are based upon the purchases made by those who were invited to the party.

Hostess Rewards are based fully on the sales generated at a single party.

The common thread of all hostess programs is to reward hostesses based on the sales made over a short period of time.  Think sprint.

Mustard and Ice Cream

Mustard and ice cream are each tasty, but together they would make a nasty treat.

Don’t make the mistake of mixing desired hostess behaviors into a customer loyalty program.

Customer loyalty should not be tied to the sales made to other customers at a party, whether real or cobbled together to meet a party minimum.  Likewise, hostess programs should not provide rewards for sales made over a long period of time.