Understanding how your business works
Starting a new job or a new business always involves a
certain amount of adjustment. There is a whole new culture to acclimatise to,
new terminologies to understand and, of course, learning what your new role
requires. Network marketing actually has more new things to understand than
most forms of business, and it can be a little confusing. This section will
provide a general overview of how network marketing businesses use terminology,
how you make money from them, and their specific idiosyncrasies. While we can’t
address the specifics for every network marketing business in the world, we can
provide enough of an overview to give you an educated understanding of the key
points of a network marketing operation.
#19 Understanding the alphabet soup of your business
#20 What is the ‘line of sponsorship’ and why is it
important?
#21 Compensation plans and bonus scales
#22 Rewards and recognition
#23 Ethics and conduct
#24 Get to know the company representatives
#19 Understanding the alphabet soup of your business
Each industry uses specific terminology (jargon) to
describe certain actions, roles and positions. Network marketing is no
different, yet people often question the use of this terminology, feeling that
it’s somehow strange and difficult to adjust to. The result is that they get
bogged down in the detail, and their business stalls before they even get
started. The first thing to recognise is that business terminologies are unique
to particular businesses; your initial exposure to network marketing terminology
is no different to starting a new job in any industry that you aren’t familiar
with. Recognising this makes it easier and quicker to understand and
familiarise yourself with the terminology specific to the network marketing
business you have chosen to participate in. Much of the jargon used in the
various network marketing companies worldwide is common to all of them; nearly
all, however, have some specific terms. Terms such as down-line, sponsoring,
line of sponsorship, groups and front-line are commonly used to describe
structure within a network. Terms such as diamond, emerald, platinumand
directormay be used to indicate recognition of levels of achievement, or
positions within a hierarchy; there may be other terms specific to your network
marketing company. The key is to understand what your company’s particular
terms are, what they mean to you in building your business, and to recognise
they are simply a way of describing certain structures and positions within
your network—this is no different to using terms such as foreman, manager or
CEO to describe a position. The key message here is: if you are unclear about
what any new term means—ask. Don’t ever feel embarrassed about asking what
something means; in fact, it’s crazy not to ask.
#20 What is the ‘line of sponsorship’ and why is it important?
Within each of the network marketing companies there
will be a term used to describe the connection between yourself, and those
above and those below you. This is simply the lineage, or family tree, in a
business sense, of those in your network. Although often referred to as a line
of sponsorship, the term may be different in the company you are affiliated
with. As a business owner it is important that you familiarise yourself with
your line of sponsorship and, more importantly, build relationships,
particularly with those above you. The people above you in your line of
sponsorship provide access to a pool of knowledge, skills and information based
on experience because they have been involved in the business longer than you
have. In many cases they become your mentors, and are a great asset in
assisting you in building a successful business. Having a line of sponsorship
also provides the opportunity to find someone you can confide in and relate to.
The person who introduced you to the business may not necessarily be someone
you relate to, or may not have been involved for very long and therefore cannot
offer much in terms of experience. Using the line of sponsorship, you can seek
out someone who can better help you. A key to your business success will be
both understanding and getting to know your line of sponsorship. Be sure you
get to meet and build strong relationships with those above you who are
recognised as leaders and are active in the business.
#21 Compensation plans and bonus scales
All network marketing companies have some type of
system to calculate and remunerate their business owners. Sometimes referred to
as compensation plans, they are often tied to a bonus scale that rewards the
business owner on the volume of products sold. The exact terminology used to
describe the system of calculus varies from company to company, but what is
vitally important is that you have a full understanding of your particular
system and how it affects your business. In some cases the way in which you
structure your business, in terms of people in your network, can have a
significant impact on your remuneration and profitability. In other cases
particular products may be more profitable to promote and use within your
network than others. As a network marketing business owner, as for a
traditional business owner, it is imperative that you are clear on what makes
your business most profitable. Within network marketing, a key to achieving
this is having knowledge and understanding of the company’s compensation plan
and bonus scale. Many business owners within the network marketing business
make the mistake of getting involved without having a proper understanding of
the compensation plan, the scale of achievement required to meet the next level
of remuneration, or the correct way to structure their business to make it most
profitable, and so on. This means that they have no real ownership of their
business, and just flounder along without having a realistic direction or plan
to work to. In some cases the compensation plan involves a very complicated
mathematical calculation. The good news is that you don’t necessarily need to
have an in-depth understanding of the mathematics used, but you do need to know
at what level you qualify for remuneration based on the compensation plan and
bonus scale, and how best to achieve that level. In the early days of your
business this can be difficult to get your head around, so sitting down with a
company representative or, better still, one of the recognised leaders within
your line of sponsorship, is strongly encouraged.
#22 Rewards and recognition
One of the great features of network marketing is that
many of the companies, and their support systems, focus heavily on rewarding
and recognising achievement, whether large or small. It is often said of
recognition that ‘babies cry for it, and men will die for it’. Many people go
through life receiving very little recognition; when they experience the high
level of recognition given to those participating in network marketing, this
alone can be a driving force to continue to achieve. Many network marketing
companies also offer non-cash incentives such as convention travel, cars and
holidays as rewards for achievement. This again can be particularly rewarding
for those who might never otherwise have had an opportunity to experience such
things. Qualifying for rewards often gives the added bonus of being able to
associate with the ‘movers and shakers’ within the organisation—and associating
with success can only be beneficial. Also, as a leader within your own business
you are setting an example by qualifying for such incentives. Agreat deal of
respect can be gained from, and inspiration given to, the people within your
organisation in this way. If your network marketing company’s support system
provides such incentives and recognition, be sure you understand what you are
required to do to qualify for them. Rewards and recognition can be very useful
to you in goal-setting; more importantly, if it is something that excites
others within your organisation it can be a great tool in helping them to set
goals and achieve success themselves. The concept of reward and recognition can
equally be applied to people down your line. Remember to reward and recognise
them whenever possible. The greatest of leaders and the best of motivators with
a few well-directed words can change the course of history. This may sound a
little melodramatic but it is true. Take the time to recognise and reward those
around you who have helped you to achieve your dreams and they will only try
harder and become even greater allies.
#23 Ethics and conduct
Most network marketing companies, particularly the
wellestablished ones, have some type of written rules of conduct, or guidelines
that set out the role and responsibilities of both the company and yourself. As
a business owner it is important that you familiarise yourself with them and
always adhere to them. There should be no shades of grey. Due to the previously
tarnished image of network marketing driven by pushy, unscrupulous individuals
only interested in short-term gain, anyone involved in network marketing today
needs to play a role in changing that perception. Just a few weeks ago, sadly,
an experience with a pushy network marketer aggressively berating us on the
phone for not being interested in what he was selling reinforced the fact that
there are still people out there who simply don’t get it.That attitude has no
place in today’s world of network marketing. You either are, or you are about
to become, an advocate for the network marketing industry. We recommend
strongly that you be ethical in all that you do, display unimpeachable
behaviour and be totally professional. Through your professional approach you
will develop a reputation for being a quality operator and will attract more
customers and more people interested in being involved with you. Further to
this, it is important to make it clear to people in your down-line that you
expect the same standards from them; ultimately, they can tarnish your
reputation if they don’t display the same high moral code.
#24 Get to know the company representatives
The network company you are affiliated with will have
inhouse staff and representatives responsible for certain operations within the
organisation. A smart move on your part is to get to know and build
relationships with some of these key people. Remember, the large network
marketing companies have not hundreds but thousands of people affiliated with
them. In such large organisations it is hard to be noticed. Make a point of
meeting those who work within the company any chance you get. Good network
marketing companies base their success on helping those in the network to
become successful and having specific personnel available to work closely with
you and assist where possible. Many of these people are passionate about their
role, and take much joy in assisting others to achieve success. They are some
of the unsung heroes within the network marketing industry. Having someone ‘on
the inside’ can be of great assistance in dealing with the issues and
challenges that arise as your network grows. Spend time and energy in building
relationships with those on the inside, but don’t make it too one-sided. Be
genuinely interested in the person and the relationship will have much more
substance.
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