This decision also dictates how your compensation plan is designed. These “stake in the ground” decisions determine other strategies that must align. If your comp plan doesn’t align with this decision, it won’t be able to sustain your growth.
Make note: you must have more than 50% of revenue from real customers, who are NOT distributors. These customers have not signed an independent contractor agreement and cannot earn money. Preferred Customer programs have become a foundational strategy to sustainable, legal growth in the USA market.
Yet in Asia, customers often enroll as distributors to receive the distributor price. Unless your compensation plan anticipates this you may find your new distributors not earning sufficient income to make it worth their time. Your retention rate will be terrible.
A comp plan designed for customer heavy markets may need to be “tweaked” to work well in Asia because customers are less common. In countries where customer enrollment is strong such as North America, western Europe, Australia & New Zealand, your compensation plan must reward reps for selling to customers – not just recruiting people into the business.
Focus on One-and-Done or Predictable Revenue
Another vital decision is whether your business model relies on a “one and done” purchase or a subscription or auto-ship model.
A one & done business model means that most people buy your product or product set once and then rarely will they come back for more. Examples of this approach in direct sales would be the sale of large enrollment packs or product sets. One & Done business models start each month with zero revenue and must create every dollar from new business – there is only small amounts of repeat business.