Champagne Wishes And Caviar Dreams When comparing MLMs, incentive programs can be the difference between the drab and the dazzling.

Like your favorite game shows, some network marketing companiesoffer fabulous prizes and vacations. Called incentives, these furcoats, cars and trips aren't awarded according to the turn of awheel, but rather by merit--to terrific sellers and sharprecruiters.

Although incentives are fun (who wouldn't want a free tripor a diamond ring?), think of incentives as the icing on the cake.Liking the company and its products is more important than whatthey award top sellers and recruiters. Of course, if you'venarrowed your choice down to two or three companies, looking attheir incentive programs might make your final decision a littleeasier.

Incentives are used by many companies as a motivational tool toincrease their employees' productivity. Although all types ofcompanies use incentives, network marketing companies are known fortheir extensive award programs. With its system of independentselling and recruiting, network marketing and incentives work welltogether. Prizes, like cars, china and jewelry, encourage topsellers and recruiters to continue their efforts, and groupincentives, like discounted product, reward everyone for just beingpart of the company.

"Incentives show that a company is behind theiremployees," says Jennifer Jurgens, editor of Incentive,a trade magazine that covers the incentive industry. "Prizes,like a free vacation, encourage employees toward betterperformance."

The incentives companies offer vary. Some reward their topsellers only. Some offer awards every quarter; others, justannually. So if you're a go-getter and want to be rewarded forthat, you'll want a company that offers incentives for salesand recruitment. If you're a small seller, you might benefitmore from a company that offers more general incentives.

Prizes You Can Drive

Sometimes incentives become a trademark of the company. Forinstance, a pink Cadillac always conjures images of Mary KayCosmetics. Yet the concept of the pink Cadillac as an award forachievers came about accidentally. After Mary Kay Ash's firstfew years in business, she needed a new car. She purchased aCadillac, and had the dealer paint it the shade of her Mary Kaycompact.

When Mary Kay arrived at the office that day, the reaction wasenormous. "Oh, Mary Kay," representatives asked again andagain, "what do we have to do to get one of those?" Thus,the "trophies on wheels" prize was created. Today,although two other cars (the Grand Prix, also in pink, and thePontiac Grand Am, in red) are also awarded to Mary Kayrepresentatives for excellence in recruiting and sales, it is thepink Cadillac that has become synonymous with the name MaryKay.

Cars are often awarded in network marketing companies. NaturalWorld, which sells nontoxic and natural household, pet, personal,skin and nutrition products, adds a twist to car incentive programsby offering cash bonuses in lieu of cars. Awarded to directors forexcellence in enrollment and sales, these bonuses can be used foranything--including buying or leasing a car. Individuals wanting an"official" company car opt for a Ford Explorer in green(representative of "the environment"), the vehicle thatthe president, as well as many other representatives, drive.

See the World

In addition to cars, some network marketing companies offertheir top sellers and recruiters the opportunity to travel."The fact is," says Jurgens, "there are so manypeople who haven't traveled that much. Travel is a huge draw tothem." Although many companies only offer travel incentives totop wage earners, some companies, like NU-Concepts in Travel,"spread the wealth" to most of their downline.NU-Concepts, founded in March 1994 by president James Massoli, notonly uses performance-based contests to award vacations to topsellers and recruiters, but also regularly offers incrediblevacation discounts to all its representatives.

NU-Concepts uses a network of independent travel agents tomarket and promote travel at a grass-roots level. With its sisterfirm, Jetaway Travel, which provides ticketing, scheduling andbilling capabilities, NU-Concepts allows local independent travelagents to offer a full range of services to book travelarrangements for friends, neighbors and co-workers.

"We like to reward our sales force with aonce-in-a-lifetime value," says Ron Cummings, director ofmarketing, referring to the substantial savings NU-Concepts offersits representatives on travel. For instance, in January 1996, 1,000people (representatives and their families) enjoyed aseven-day/six-night trip to Greece, including a stay at a four-starhotel, for about $599 each (the exact price varied depending on thepoint of departure for each individual). NU-Concepts can offer suchbargains because of the volume of travel business theygenerate.

NU-Concepts representatives are also privy to information onlast-minute deals. Let's say a cruise ship is leaving in twoweeks and a portion of the cabins have not yet been booked;NU-Concepts will offer their representatives the unbooked cabins ata terrific savings. Such bargains are posted on their fax-on-demandand voice-mail systems, and are announced through leadership calls,in their newsletter and on their Internet Web site(www.nu-concepts.com). Whoever responds first gets the deal.

"Every company offers some kind of an incentive," saysCummings. "They give away a trip. They give away a car. Theproblem with this type of incentive is that only the top peoplereceive it. With us, everyone has the opportunity to travel atbargain costs."

Natural World's management believes including everyone inthe festivities actually helps the company. "We find it'sbetter to have more people rather than fewer people included in thetrips because it creates excitement and energy," says JaniceK. DeLong, president and CEO. On one recent trip to Los Cabos,Mexico, representatives who didn't win the trip for free couldgo on the three-night, four-day trip anyway--for less than $500(plus the airplane fare). Even throughout the trip, representativesearned prizes, such as T-shirts or hats, at a "BeachOlympics," which Natural World organized to generate teamspirit, camaraderie and friendship. "Our idea is to create abonding-together culture," says DeLong. The idea, according toDeLong, is for representatives to bond with one another, like afamily does. The annual trip fosters friendships among all ofNatural World's representatives, and allows top sellers to mixwith newcomers and other representatives.

Specialized Prizes

Prize-giving has no set schedule. Some company representativesvie for prizes on a quarterly schedule, some monthly, and others,like Natural World, every other month. "If you have them everymonth, you lose momentum," says DeLong. "We envisioned aprogram that would reward people for bringing customers into thecompany. People will do things for cordless phones and fax machinesthat they won't do for a paycheck."

Some incentive contests are ongoing, like Mary Kay's carprogram. "When I started Mary Kay, I wanted to give employeeswhat I call `Cinderella gifts,' " says Mary Kay,"things that a woman would love to have, but wouldn't buyfor herself." Mary Kay representatives can also win prizes,like jewelry or furniture, on a quarterly basis. (NU-Concepts alsohas periodic sales contests.)

Some prizes are cumulative. Natural World offers a GoldMedallion to anyone who refers five people in one month; eachsubsequent month that this occurs, they'll add one diamond tothe Medallion. After seven diamonds, the representative receivesthe top-of-the-world gift: a crystal globe placed on a granitebase. From then on, as long as they maintain their status, thatrepresentative receives special seating at all company events.

Watkins Inc., founded in 1868 by Joseph R. Watkins, sells over375 items in four product lines: specialty food, personal care,health and nutrition and household products. The company sponsorssales promotions throughout the year, reserving their bigincentive, usually a trip, as an annual award. One promotionalcontest, for instance, which ran from March 1 through June 15,1996, awarded a representative with the "best performance ingenerating sales from (sponsoring) new representatives" with afully restored 1929 Ford Model "A" Sedan Watkins DeliveryTruck, valued in excess of $10,000.

"I think incentives are something that people feel theyneed in order to keep them excited in the business," saysDuane Evans, vice president of administration for Watkins Inc.

Even more than conventional companies, network marketingcompanies rely on their representatives' success. In a sense,as a representative of the company, you are in partnership with thecompany. Incentives benefit the company as much as therepresentative. For if you do well, the company doeswell.