A lot of VMobile subscribers are sending me private messages asking for my opinion about the recent events in the company. They are prodding me to give comments. I gave it a thought and to help in decision-making, my opinion or comments will come from my two decades of practice in the MLM industry and a decade of designing compensation programs for Network Marketing companies including those I hav
e helped establish.
I will try to make it short and simple. Here they are (PART 1):
1. ON THE ISSUE OF PRO-RATED TSB AND THAT VMOBILE IS THE ONLY COMPANY USING THIS METHOD. Pro-rated compensation program or 'pooled' incentives is NOT NEW in the MLM industry. It is employed by SOUND and STABLE MLM companies. VMobile is NOT THE ONLY company using this method. Most companies using this type are US-based. Pro-rating of compensation ensures the stability of payout that is NOT INHERENT in ANY BINARY program, most especially when the product being sold is NON-CONSUMABLE like subscriptions to a service such as VMobile's.
There are variations of design for Binary compensation program. One is the conservative approach of requiring 1/3 and 2/3 of sales volume on both teams to qualify for the 'pairing' or matched sales. The most popular is what they call Binary 1-1, which requires equal sales volume on both teams or 'legs' to earn a pair or bonus. The latter is the riskiest of all the variations but is the most popular. To counter the sure failure of a Binary program, volume from REGULAR sales of CONSUMABLE products must also be included in the volume tracking. This is the practice of USANA--the longest existing Network Marketing company in the world employing BINARY.
The pro-rated TSB has been the policy of VMobile since its inception. However, pioneering leaders of the company requested for the TEMPORARY suspension of such behavior when it started late in 2010. This is why TSB ADJUSTMENT is seen as entries in the transaction records of ALL qualified subscribers in myLX. This is a way to TRACK how much SUBSIDY VMobile had given to ALL its members including those who have requested and left the company after reinstating what is important for the STABILITY of the whole program. That amount of money represents what could have been profits for VMobile but was given in the hope of a better and LASTING relationship with its active members. Apparently, such hope did not work for some.
VMobile was instrumental to the success of many of its pioneering subscribers but was deserted when it is time to protect the "goose that lays the golden eggs." Many who have left believed that the company can sustain paying fixed TSB. Well, that is not the case and the truth.
Let me give you a quick and easy way to analyze if a BINARY compensation plan CAN SURVIVE. For a company to pay P500 per 'pair' or for a matched sales, the amount that the company should set aside or appropriate to ensure that it can pay such for QUITE A TIME should NOT BE LESS than 500% of its intended 'pairing value'. This is not the only factor to consider. The maximum DAILY allowable income for an account from such 'paired sales' should not exceed 8-10 times the amount of allotment. In the example I have given above, for P500 TSB Value, the allotment should NOT BE LESS THAN P2,500 PER SALE and the maximum daily allowable TSB earning should not be more than P20,000-P25,000. The maximum for VMobile is P30,000 per day.
The allotment for Binary compensation is even DISTINCT and SEPARATE from any other incentives a company could give such as Direct Incentive (P500 in the case of VMobile). When you consider the cost of the subscription package and the payout allotment, you will realize that sales of subscription should not be the main source of income for a Network Marketing company. Otherwise, a company solely founded on 'recruitment' is bound to fail.
MORE in the following posts... This is no longer short. My apology. ---- Ismael Bengco III
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