The Problem with Year-over-Year Growth Compensation for Distributors
Viewed from outer space the Earth looks smoother than a billiard ball. What’s more according to the experts at Discovery Magazine, the looks are not deceiving. Lumps on billiard balls (diameter 2.25 inches) can be no more than 0.005 inches in height. Applying this theory to our little outpost in the universe the maximum “bump” cannot exceed 17 miles in size. With Mount Everest at 5.5 miles high and the Marianas Trench (the deepest spot in the ocean) at nearly 7 miles deep, Earth is actually twice as smooth as that slick black 8-ball we sometimes shoot for the corner pocket. What has this to do with year-over-year growth plans? Plenty. Allow me to explain. Everyone likes strong dynamic growth. Setting and achieving aggressive goals is a thing of beauty. Applying this philosophy, manufacturers sometimes decide to build incentives into their channel plans. Here’s how it generally works. It’s a pay for performance thing. Grow your business by 20 percent and you receiv...