Friday, August 21, 2009
eFusjon's Compensation Plan Changes (Dramtically)
On August 6th, eFusjon announced the company would be changing their compensation plan so that all distributors would receive 1.25% commission on community overlap. (Distributors would continue to receive 4.25% on all personally enrolled and their downline.) According to eFusjon, the change is a raise of .25% for approximately 80% of the company. However, for the distributors who joined eFusjon prior to May 1, 2009, the change represented a pay cut for many. I have heard Rob Towles say that only about 3,900 distributors were actually affected.
The change represents the 4th adjustment to eFusjon's compensation plan since its inception. The first compensation plan ran from September 2008 thru December 31st 2008 (read about it here). In January 2009, eFusjon adjusted the compensation plan so that distributors were paid 4.25% on their entire downline, including community overlap. On May 1st 2009, eFusjon adjusted the compensation plan for the third time by reducing the commission on community overlap to 1%. However, all distributors that joined eFusjon prior to May 1st continued to receive 4.25% on community overlap -- effectively the distributors were "grandfathered" in. And while the 4th adjustment on August 6th provided the majority of the company with a pay raise, eFusjon stripped the distributors who were "grandfathered in" of their 4.25% commission on community overlap and made all distributors in the company equal at 1.25% for community overlap.
Now, let's get one fact straight, eFusjon's decision to reduce the commission on overlap for some of its distributors sent shock waves through the company. In my humble (but accurate) opinion, those entering a business or an investment in the early stages take on more of the risk and therefore should be paid out at a higher level than those entering the business or investment in the later and more secure stages. While I have not changed my belief regarding the distributors who shouldered the burden in the early stages reaping more rewards, I do accept the decision eFusjon was forced to make to support the longevity of the company.
More and more details continue to emerge surrounding the decision to level the playing field and ultimately make all distributors equal. The catalyst for the change came down to eFusjon being sharply watched by a number of State Attorney Generals and on the brink of being forced to close for an investigation. Why? Because a handful of distributors were advertising the massive amounts of money they were making to potential new distributors, but not disclosing the fact that the massive amount of money being made was due mostly to the "grandfathered" compensation plan -- sort of a bait and switch tactic. Of course, I do not believe this was being done by most maliciously, but the fact remained that the new distributors would (likely) not be able to make anywhere near the kind of money being advertised. Potential distributors were being lured under false premises, which lawmakers do not take lightly.
Now, the truth is many companies use "grandfathering" and eFusjon (in my opinion) would have likely fared well in court. But, the investigation would have forced eFusjon to shut its doors for months (or years) likely, and as a young company, eFusjon likely did not have the capital reserves nor the reputation (yet) to hunker down for a long battle. So, eFusjon's founders and legal team ultimately made the decision to make all distributors equal and give the majority of distributors a raise.
I cannot be sure why Rob Towles and eFusjon corporate have not yet come out and said all of this "officially". (And honestly, I do not agree with their choice.) I can only surmise that eFusjon did not want to scare its distributors with the thought of a lawsuit. While veterans of the network marketing industry know lawsuits are common place, eFusjon has brought in many new faces to the industry who might not be so comfortable with the thought of the company being sued.
Ultimately though, as Rob Towles has stated, a level playing field in compensation is more in line with his personal vision and will be better for the company over the long-term.
The change represents the 4th adjustment to eFusjon's compensation plan since its inception. The first compensation plan ran from September 2008 thru December 31st 2008 (read about it here). In January 2009, eFusjon adjusted the compensation plan so that distributors were paid 4.25% on their entire downline, including community overlap. On May 1st 2009, eFusjon adjusted the compensation plan for the third time by reducing the commission on community overlap to 1%. However, all distributors that joined eFusjon prior to May 1st continued to receive 4.25% on community overlap -- effectively the distributors were "grandfathered" in. And while the 4th adjustment on August 6th provided the majority of the company with a pay raise, eFusjon stripped the distributors who were "grandfathered in" of their 4.25% commission on community overlap and made all distributors in the company equal at 1.25% for community overlap.
Now, let's get one fact straight, eFusjon's decision to reduce the commission on overlap for some of its distributors sent shock waves through the company. In my humble (but accurate) opinion, those entering a business or an investment in the early stages take on more of the risk and therefore should be paid out at a higher level than those entering the business or investment in the later and more secure stages. While I have not changed my belief regarding the distributors who shouldered the burden in the early stages reaping more rewards, I do accept the decision eFusjon was forced to make to support the longevity of the company.
More and more details continue to emerge surrounding the decision to level the playing field and ultimately make all distributors equal. The catalyst for the change came down to eFusjon being sharply watched by a number of State Attorney Generals and on the brink of being forced to close for an investigation. Why? Because a handful of distributors were advertising the massive amounts of money they were making to potential new distributors, but not disclosing the fact that the massive amount of money being made was due mostly to the "grandfathered" compensation plan -- sort of a bait and switch tactic. Of course, I do not believe this was being done by most maliciously, but the fact remained that the new distributors would (likely) not be able to make anywhere near the kind of money being advertised. Potential distributors were being lured under false premises, which lawmakers do not take lightly.
Now, the truth is many companies use "grandfathering" and eFusjon (in my opinion) would have likely fared well in court. But, the investigation would have forced eFusjon to shut its doors for months (or years) likely, and as a young company, eFusjon likely did not have the capital reserves nor the reputation (yet) to hunker down for a long battle. So, eFusjon's founders and legal team ultimately made the decision to make all distributors equal and give the majority of distributors a raise.
I cannot be sure why Rob Towles and eFusjon corporate have not yet come out and said all of this "officially". (And honestly, I do not agree with their choice.) I can only surmise that eFusjon did not want to scare its distributors with the thought of a lawsuit. While veterans of the network marketing industry know lawsuits are common place, eFusjon has brought in many new faces to the industry who might not be so comfortable with the thought of the company being sued.
Ultimately though, as Rob Towles has stated, a level playing field in compensation is more in line with his personal vision and will be better for the company over the long-term.
Thursday, August 20, 2009
eFusjon's Attrition Rate
Rumors are running rampant about the attrition rate in eFusjon since the launch of the Facebook application and change to the compensation plan. Per Rob Towles, eFusjon's attrition rate from their launch in September 2008 thru August 1st 2009 was 3%. Typically, the rate is much higher in the industry (upwards of 90%).
Now, again per Rob Towles, since August 1st the total attrition rate has jumped to about 8% -- far less than the rumors would suggest. Towles relayed that approximately 1400 spots have been vacated in the month of August, but he estimates that approximately only 250 actual people left. In other words, as Towles conveyed, one of the outcomes of the change in the compensation plan is that many people are giving up some additional spots in the matrix they were holding. He said he did not mind that people may hold two or three that they actually worked to build, but frowned upon people holding upwards of eight spots just looking for overlap. So, Towles in fact, was quite happy about this result.
Now, will this jump more in September as more officially become deactivated? I would assume, but can't guesstimate by how much. Rob Towles reiterated that eFusjon continues to set records and bring in tons of distributors because 45,000 of its distributors actually received a raise with the change in compensation plan.
Now, again per Rob Towles, since August 1st the total attrition rate has jumped to about 8% -- far less than the rumors would suggest. Towles relayed that approximately 1400 spots have been vacated in the month of August, but he estimates that approximately only 250 actual people left. In other words, as Towles conveyed, one of the outcomes of the change in the compensation plan is that many people are giving up some additional spots in the matrix they were holding. He said he did not mind that people may hold two or three that they actually worked to build, but frowned upon people holding upwards of eight spots just looking for overlap. So, Towles in fact, was quite happy about this result.
Now, will this jump more in September as more officially become deactivated? I would assume, but can't guesstimate by how much. Rob Towles reiterated that eFusjon continues to set records and bring in tons of distributors because 45,000 of its distributors actually received a raise with the change in compensation plan.
Friday, August 7, 2009
Original eFusjon Compensation Plan from 2008
I stumbled across the original eFusjon compensation plan from 2008. All I have to say is, "Wow! Why didn't I know about eFusjon then?" Distributors were paid $10 monthly for each personally enrolled Associate and their personally enrolled Associate's downline. Plus, distributors received a one time $100 bonus for each personally enrolled associate. Not to mention, community overlap was paid at $5 per associate. Now, that is a lucrative compensation plan! Below are screen shots of two pages from the original Compensation Plan PDF (click on the images to blow them up):
Subscribe to:
Posts (Atom)
