A Toxic Trend
The guaranteed payment to supposed leaders is a toxic trend affecting many companies in the network marketing industry today. I use the word supposed because, in most cases, the individual that is accepting the guaranteed payment is not willing to do what is necessary to be successful. They are not willing to get in the trenches and do the dirty work. They are often living off past accolades or past successes, and have no desire to actually do the work it took for them to succeed in the first place. In addition, the individual looking for guaranteed payment has lost all credibility with the individuals they have worked with in the past. Therefore, they offer nothing of substance to the naïve company with which they are trying to make a deal. It is a sad to see companies spend good money on these unethical, impractical, guaranteed payments.
As a co-founder of a network marketing company my partners and I have been approached many times by past leaders looking for us to guarantee them money to join our company. Many times these well-intended “has-beens” bring old articles and awards to show us how successful they were in their past. However, they show no proof of accomplishing anything of significance in recent years. It’s actually quite humorous to look at these old magazine clippings or pictures of them receiving an award 25 years ago for something or another.
What Real Leaders Look For
Real leaders are looking for the best company they can find, with the best product they can sell, and the best team of owners they can work with. Why? Because if you are as good as you portray yourself to be then you don’t need a guarantee, you need a good company that you can believe in. Good leaders are confident enough in themselves to know they will make more than enough money doing what they do best. However, when you are searching for the biggest pay off, with no regard to anything else about the company, then you are doing a huge disservice to anyone you may try to recruit in the future.
This Is Not Baseball
Predators often argue, “if you want talent, you have to pay for talent.” They also have a tendency to compare it to professional sports. One individual told me, “If you want Alex Rodriguez talent, you have to pay for Alex Rodriguez talent.” However, he failed to see the difference between baseball and network marketing. Not to mention, he was no A Rod of MLM. Alex Rodriguez is an employee, working alongside other employees. They are told where and when they are expected to play, practice, and promote with their team, and salaries are the norm. Network marketers are not employees, they are independent contractors. Salaries are NOT the norm. It is the norm for everyone to start at the same place, with the same chance of succeeding. Only a very few are able to compete in professional sports. However, anyone with a willingness to work and a burning desire to thrive will be a success in the network marketing industry.
I have spent a lot of time listening to other owners discuss the topic, and I have never once heard of it working. In my opinion, it never will work for a few reasons;
- If an individual were willing to join your company because of a guaranteed payment, he or she would be more than willing to join any other company offering a higher bid.
- Animosity sets in when individuals who have built substantial teams and generated large amounts of money for your company find out you are paying others to join. They will never feel the same about the ownership of the company they once believed in and worked so hard for. I have seen this happen with a couple of very established companies. Not good.
- If the person’s ultimate decision was based on how much you were willing to pay, then you probably have yourself a new rep that can’t deliver what they promised in the first place.
*There are many ethical issues I have with it as well, which I will avoid in this post.
The Bottom Line
If you are an owner of a network marketing company and don’t have the confidence in yourself and your message to build it on your own, the right way, without paying reps to join, then you should consider another business. Perhaps a more traditional model, where paying people a salary is the norm.
Also, if you are an individual truly worthy of compensation for your enrollment then have enough confidence and integrity to realize you are far better off basing your decision on more than what the company may be willing to pay you. Find the best product, company, and ownership and you will do just fine- without compromising your integrity.
The Back End
I have always said the only fair way to pay for leadership is based on “the back-end.” In other words, you accomplish X, and we will pay you Y. A bonus based on production, that anyone can participate in, is the only fair, equitable way to compensate leaders. In this scenario, you will attract the individuals that really do have confidence in their abilities.
I feel a sense of pride knowing that every single rep that joins our company has the exact same chance of success.
Wishing you all the success you will allow yourselves to have!