pplCENTER - Coach's Corner

Marsha and I used to be in a company called Nu-Skin. Nu-Skin pushed having home parties to be able to sell their nutritional line or cosmetics line or hair care products, etc. When we would sell $30.00 or $40.00 worth of merchandise our commission might range between $1.50 to $3.00 on that particular sale. Our goal was to get our customer's set up on an "auto ship" program where they automatically got a shipment of the products they like the most every month. This is how we made our residual income. Nu-Skin along with most other MLM companies paid us once a month, not every day.

Pre-Paid Legal is set up a little differently. If I sell a $35.95 Life Events Legal Plan & IDT Shield as a Manager for example, Pre-Paid Legal pays us a one year advance commission of $172.84 and they pay it to us generally the next day, not once a month.

The upsides: Getting paid every day & getting paid a full one year advance commission instead of a 1/12th installment of $14.40 ($172.84 / 12)

The downsides: Charge backs. In traditional MLM companies charge backs are really not an issue because they pay you on the commissions you make each time you sell something.

Because Pre-Paid Legal has over 30 years of actuarial data, they know they can pay out a one year advance because they know the statistics of how many members will stay on the books and for how long and what the break even point will be for most.

The challenge: Avoiding charge backs and writing good business! I’ve known really excellent people who came to Pre-Paid Legal and left because they found themselves in what is commonly referred to as “chargeback hell.” “Chargeback hell” is a condition where you aren’t getting paid any commissions because you’re commission account has gone into a negative balance because you had charge backs from your personal sales or from the sales of your team whom you had made overrides on.

So, how do we prevent charge backs? You can’t! However, you can minimize them! Marsha and I have been here for 7 years and we’ve had charge backs out the wazoo but we are still here and we’ll be here 7 years from now and 7 years after that!! We understand the system because we’ve taken the time to study it and know that the big pay day with Pre-Paid Legal is after all the charge backs and debit balances have been paid off because that’s when the renewals start going in your bank account and not to pay off outstanding balances.

Many do not know that Pre-Paid Legal doesn’t force us to take a one year advance commission. For those who really don’t need the cash flow right now, you can simply call marketing and tell them to reduce your advance commission to whatever you want it to be. If you want to be paid 6 months in advance, fine, they’ll change it. If you want to be paid 3 months in advance or even as earned, they’ll change it. We’ve always had to take the advance commissions because we needed the cash flow to pay our bills, etc.

A common mistake people make in Pre-Paid Legal is they get lulled into seeing all this fast cash coming in and think, “I should quit my job and go full-time.” In most cases this ends up being a disaster. We NEVER recommend to anyone to quit their jobs unless they have at least two years staying power! Meaning, if they didn’t make a penny from their PPL business in two years would they still have enough money to live off of. Most simply don’t. Normally, once you’ve created 1 to 1.5 times the income from your regular job then and only then should one think about quitting and going full time. It’s not worth putting your family at risk.

The keys to being financially solid in Pre-Paid Legal are:

Recruit, recruit, recruit! By recruiting “new blood” into your organization you are building a solid foundation which will continue to throw off overrides from all of the memberships being sold through PRB’s, sit downs, 3 way calls, etc. You simply can’t recruit enough people in this business! I call it the PAC MAN effect. The PAC MAN effect is when the growth of your team and the memberships being sold outpace the charge backs that are created. Thus, PAC MAN is gobbling up the charge backs with the massive overrides that are being produced by the natural growth of your team. Recruiting is the nature of any solid business in America! You’ve got to work and work and work to the point where you MASTER THE CRAFT of recruiting. For some it comes very easy and for others it may take years! But you must keep working at it until you master it and when you master it you must teach others how to get good at it!!

Only write good business!! Never write a membership that you KNOW won’t stay on the books for at least 12 months! I’ve turned people away many, many times in the past because they just wanted to take out a membership so they could get their will or talk to an attorney about something but would then cancel it the next month. NO!! They can buy from anyone BUT me! We don’t want their lousy business! It will bring down our persistency percentage which will affect our long term residual income and it will cause charge backs which will lower our overall cash flow. Teach your organization to only write good quality business! Teach persistency! Teach quality! Teach LONG TERM!! Marsha and I have been paying on life insurance for 23 years and we’ve never had to use it ONCE! We’ve been paying on home owners insurance for over 20 years and we’ve never used it ONCE! We’ve been paying health insurance for many, many years and we rarely use it! Why do we pay for this stuff? JUST IN CASE!! Pre-Paid Legal is there JUST IN CASE. We teach our customers this principle. We teach them that they don’t ever want to be without this membership because they simply never know when they might need it! It’s there JUST IN CASE!!

Don’t ever quit! People who come into Pre-Paid Legal, write twenty, thirty, forty memberships and then quit for some reason or another don’t realize that any renewal income that is created from their personal sales or the override income they may have earned off of sales from their team will remain with Pre-Paid Legal. The override renewals will be paid out to the upline who stay in the game but the company will get the renewals of the memberships they (the person who quit) wrote that stayed on the books. All we have to do is keep our membership forever and we are all “vested” meaning we will always be eligible for any commissions we are entitled to! Marsha and I signed in up Pre-Paid Legal for the LONG TERM RENEWALS not the “here and now” money!! The “here and now” money or advance commissions is what pays the bills today but the renewal income is what will give us the lifestyle we are planning for when we don’t want to work any more or when we can’t work anymore! Planning for the future is what is important to us and it should be to each one of you!

Team, the company has gone to great length’s to teach us the importance of retention and writing good business. Every Monday morning on the company leadership call we are trained on retention tips, every quarter we have the opportunity to attend a four hour training called Advanced Product Training where we learn how to write better business and how to sell more business. Your upline are constantly providing good quality information (like this piece) to guide you to write good business. It’s so important that we all “buy into” this philosophy and that we work hard to sell our customers on the long term nature of our plan!

The company has provided reports we can watch and monitor to help us in our retention efforts. We have the renewal persistency report (EXCELLENT TOOL) and the pre-cancel membership report, etc. These tools give us the information we need to try and save sells and provide instruction to our organization on the importance of keeping our retention efforts on the front burner! We are all running a business here. Those of us who treat it like a business and run a tight ship and focus on personal development so we can be better leaders to those we lead, will all not only survive in this business but will THRIVE in this business!

Recruit every day by exposing two to five people a day. Sell better memberships by recruiting more people. It’s a proven fact that associates keep their membership longer than “Joe Schmoe” customer who sees a 15 minute presentation and becomes a member. The associate has more training. They are exposed to more information. Thus the reason they keep their membership longer. One of the inherent problems with group marketing is that you usually only have about 20 minutes to sell your customer on the value of the membership and then you work like crazy afterwards to make sure they keep their membership. A 15 – 20 minute presentation will not cut it when it comes to high retention in group marketing. The fortune as they say is in the follow up! By focusing on recruiting you’ll drive your retention percentages up! You’ll create more leverage! You’ll allow PAC MAN to gobble up the charge backs. If your team isn’t growing you aren’t allowing PAC MAN to help you! That’s why it’s so important to RECRUIT, RECRUIT, RECRUIT and not to get these three things out of order!

I LOVE RECRUITING NEW PEOPLE!!!! Some of our best friends are the people we recruit into this business! We are always ADDING TO OUR FRIENDSHIP CORE when we are recruiting new associates! This is an invaluable part of the business that we truly cherish! It’s fun! It’s rewarding! It’s what we do in network marketing! We recruit!

To your continued success,

Tony & Marsha Hughes
Members Of The Millionaire Club
Platinum III Executive Directors
250K Ring Earners
Regional Vice Presidents-Arizona
Oro Valley Arizona
877.630.6309

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