Tips and technology to improve your MLM Compensation Plan

Tips and technology tools to improve your MLM Compensation Plan

The sales team in any business model is one of the fundamental pillars for attracting customers, generating income and long-term relationships. Therefore, to have a constant growth of the business and a positive impact in the future, it is really important to motivate the sales team through different incentives such as the Compensation Plan.

In this article we will present to you some techniques and tips to improve your Compensation Plan or create it, in addition to this, in order for you to compete in the digital age, we will present some technological implementations that will improve the performance of your Compensation Plan and your digital sales strategy.

Tips to improve your MLM Compensation Plan

To carry out or improve your MLM Compensation Plan you should think about defining its structure, steps, monitoring and objectives. For it:

Define your business strategy

You have to be very clear about the business objectives of your Compensation Plan, these objectives should be linked to the sales strategy that is being implemented in your company.

Measurement and monitoring

Establish the metrics with which you will measure the performance of the Sales Team, their goals and achievements to meet the different criteria for compensation. These guidelines for measurement are not going to be used just by the company but also by the sellers so they have to be clear and you have to provide them with enough information to understand and calculate them.

Incentives or payments types

Decide and communicate to the Sales Team if the compensation will be an increase in the salary, business trips, bonuses, points or other types of incentives. Communicate the details of the incentive, for example in the case of an increase in the salary, establish how much will be the percentage to earn, use different percentages according to growth in sales or achievement of goals.

Define the structure of the MLM Compensation Plan

Here are some examples that can be applied to the structure of your Compensation Plan.

Stair step

This structure is one of the oldest used in MLM business models. When the number of people in the Sales Team is growing, the sponsor of the network will have greater benefits and discounts on the products. Generally, there are 3 or 4 climbs to higher ranks that can be achieved by increasing the sales volume.

Stair Step Compensation Plan


This Compensation Plan structure has only one business level and all the sponsored members of a seller are placed directly on the first level, so the recruitment and sales made by the seller are directly beneficial to him.

Uni-level Compensation Plan


This Compensation Plan structure limits the width to two affiliates. In this example, you can apply payment for the volume of business groups, team bonuses, quick start plans and range reach bonuses.

Binary Compensation Plan

Don’ts of your MLM Compensation Plan

Set only one type of compensation for your sellers

All businesses are different but having a single type of incentive or a single percentage of compensation for sellers will mean that at one point you will not find a higher level of competitiveness. Think, if you have different increasing profit percentages in your compensation plan, the seller will always want to sell more.

Unreachable compensation goals

The idea is to motivate salespeople, not demotivate them, as we mentioned earlier align the Compensation Plan with real, specific, measurable, achievable business and sales objectives. In this way, both the sales level of the Sales Team and the company will grow.

Not investing in technology

We are in the digital age, changes in customer buying behavior are clearly more directed to online platforms, so it is important to provide sellers with different digital tools such as back offices for business management, replicated sites for online sales and Compensation Plan Software, where the company and Sales Team can have control of their Compensation Plan and sales in digital media. Help your Sales Team reach their goals. 

S4DS’s Technology for your MLM Compensation Plan 

S4 MLM Software

Our S4 MLM Software technology simplifies your workflows by managing your Sales Team commissions, calculations and payments, customers, orders, inventory, party plans, CRM, reports and more. We will help you manage and visualize the progress of the distributors within the Compensation Plan of the company:

  • Management of indicators
  • Configuration of ranges or qualifications
  • Continuity of ranges to see the growth of our clients
  • Commission machine to configure all business rules
  • Detailed monitoring by sales cycles
  • Real-time calculations throughout the cycle
  • Indicator adjustments and re-calculation of commissions
  • Payment of commissions
  • Conversion rate
  • Detailed report with indicators and extracts of the commissions. 

With S4DS, strengthen your Compensation Plan and focus on sales growth strategies. We have many functionalities, benefits and technological advantages for your company and sales team. 

You want to know more about how to improve your MLM Compensation Plan and sales strategies? 

Contact us!

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