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The rank achievement commission is awarded, as the name suggests, to agents when they achieve a rank. This is done in one of two ways - the leader could receive a once-off commission for the first time that they achieve a leadership rank; or they could receive a rank achievement commission every time they achieve a rank.
The once-off rank achievement commission is designed to drive people to achieve the necessary qualification for a promotion and then to reward them for the achievement. If the commission is paid monthly, it could replace several of the other commission elements.
The reason for paying this commission monthly is to provide the company with a way to advertise the amount of money a person will earn from the company. Before I continue, I would like to mention that it’s illegal to make earning claims when recruiting a new member. The rank achievement commission sidesteps this restriction as you are guaranteeing a specific income for a specific rank. Your agents know exactly what they will receive every month from their specific rank and the excess commission is retained as breakage.
Over the years, we have had clients who have used this as their sole leadership commission, and we have had clients who have become creative and used it as an incentive. Here is an example:
One of our clients created a car incentive. If you reached a certain rank and maintained that rank for 6 months, you qualified for a car. The agent purchased the car in their name, but the company provided the deposit (the first 6 months of retained rank achievement commission) and then paid for the car every month that the leader qualified for the rank. Depending on the rank, the value of the car increased, with diamond team leaders receiving a Toyota and triple diamonds getting a Mercedes C-Class. As you can see from this example, the rank achievement commission is very versatile.
Calculating the rank achievement commission
Each rank should have a minimum qualification criterion which will determine the commission amount. Let’s say a diamond needs 10 active team leaders to qualify. If each active team leader is required to achieve minimum group sales of $10,000 you have a minimum turnover of $100,000 to draw the commission from. If a specific rank is awarded 1% then the leader would receive $1000 every month. If that leader has 20 team leaders and is achieving $200,000 in monthly sales, they would still only receive $1000 per month. The balance would be retained earnings or breakage.
If any of the team leaders became inactive or dropped below the minimum volume, the diamond would no longer qualify for the rank achievement commission.
I really love this compensation element as the risk is zero and the upside is phenomenal. Click the link to check out the amazing NetReady MLM Management Software