24 June 2009

Definition: Residual Focus Company

The development of a Residual Focus Company begins with the desire to increase the percentage of distributors that maintain a qualifying volume and to create mathematically a compensation design to assist this achievement. The primary belief in this concept is that retention relates directly to the development of a residual. The residual focus company design is to mathematically create retention and thus increases by many factors the ability to now create a residual.

1. Mathematically Increase the Cash Flow.

2. Cash Flow Increases Retention.

3. Retention builds Residuals.

By simply creating residuals for all distributors, we form a powerful, strong core in our organizations. The distributors and the company reap the benefits.

You may be asking how this explanation differs from other types of network marketing company financial focus. The answer is that many compensation plans look great on paper...the latest, greatest, most lucrative ever kind of thing. But when you seriously look at the numbers you find a great deal of breakage (money that does not go to the field but comes back to the company), and also holes. Holes in a compensation plan can be seen for example, when there is a great fast start bonus incentive, but then a gap until the residual begins. Another type of hole is one where the fast start pays out to the enroller, but not at all to the upline for a period of time. The upline essentially gets no residual on a new enrolling for a number of months..and by that time the new person may even be gone.

The idea behind a Residual Focus Company is to reverse the 75% Attrition Rate in the MLM industry and create a 65%-75% Retention Rate. When you do this, your efforts pay out for a longer time and more easily. You then do not need to become a recruiting machine..which is never what network marketing was meant to require in the first place. Instead you can focus on teaching and duplicating. Your team will grow steadily and with strength, and the residual income of all will be reflective of individual efforts.

1 comment:

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