Placements Part 7 – Understanding Depth

This is Part 7 in a blog series on placements, and in this post we are focusing on an examination and understanding of placing at depth in your tree.

UniLevel Commission & Dynamic Compression

The first thing to understand is why depth is an issue at all. From a ranking perspective you can rank off someone wherever they are in a leg, no matter how deep. The reason it matters at all is because an important component of the Compensation Plan, the Unilevel Commission pays out seven payments on each piece of volume. How it pays out has a level of complexity and is misunderstood by many people. The calculation uses a process called Dynamic Compression to ensure that all seven payments are paid out even if there are people in a chain who are not entitled to a payment. The system goes looking for the next person who is entitled.

My wife Petah-Jane Auckland-Hall and I created a video that explains the interaction of Unilevel Commission and Dynamic Compression last year. Have a look at it to get a deeper understanding of Dynamic Compression.

The Unilevel Compensation Plan is usually depicted in this diagram:

Unilevel.png

The diagram explains that with each rank advancement comes an additional level of payment you are entitled to, until at Silver you become entitled to seven levels of payment, which is the limit that applies to all ranks after Silver.

You could be forgiven for thinking then, that you only get paid at most on seven levels, and that you would not earn UniLevel Commission on people below your eighth level. This is not the case due to Dynamic Compression.

Here’s a few highlights of how dynamic compression works:

  1. It always pays out seven payments against the volume in every wellness advocate’s account.
  2. It starts the calculation search from the person above the volume, and then goes upwards. Paying out an L1 payment first, then L2, and so on until it has found someone entitled to all seven payments up to L7.
  3. The payment calculation considers two things as it looks to make a payment:
    • Are you entitled to earn commissions based on your PV being over 100 (or 50 for a Consultant), and have a 100 PV Loyalty Rewards Template in place (or 50 PV for a Consultant)
    • Does your paid rank for the month concerned entitle you to the payment the system is looking to distribute. If the system is looking to place a L5 payment from some volume deeper in your tree, and if your rank is Executive then you are only entitled to payments up to L4, so the system will skip you and go looking for an Elite or above who is entitled to earn it.
  4. If you are the first Silver (or above) up from an piece of volume, you will earn commission on every level below that has generated volume even if your tree is 30 levels deep. No-one else below you will be entitled to a L7 payment, so you could conceivably get 30 payments on a single string 30 deep. It is common until you have other Silver Leaders below you in a string to earn more than seven payments, and commonly more than one L7 payment.
  5. The 2016 dōTERRA Opportunity Earnings Disclosure shares that only 0.5% of dōTERRA members are Silver or above, 4% are Elite & Premier, 17% are sharing and earning at Executive or below, and the remaining 78.5% of members do not earn commissions. What this tells us for Dynamic Compression is how few people are entitled to L7 payments.
  6. As you succeed in a major way as a Diamond, your leaders will be Silvers, and will catch a lot of the L7 payments from deep in your tree. That factor will be exacerbated at Presidential Diamond when you will have a layer of Platinums (or above) and a layer of Silvers (or above), and ultimately more high ranking people emerging deeper in your tree. At this stage Unilevel Commissions on volume tap rooted deep in your tree will probably be lost to those leaders.
  7. So early in your journey when you place deep in your tree you won’t earn Unilevel as you will only be earning L1 payments, then L2 and so on, and you will only earn L7 payments once you get to Silver. At Silver and Gold you will pick up a great many payments from almost any depth until you have leaders get to that level under you. Then from Platinum and beyond you will start to loose some Unilevel from deep in your tree.

Many commission plans with other Direct Sales companies do not use dynamic compression, and if a person on a level is not entitled to a payment, the company will keep that money. Dynamic Compression is a very generous payment method and is typical of the ethical stance dōTERRA takes in everything it does.

So you can see from the above that Dynamic Compression is not simple, and that it makes depth a shifting playing field. It is important to note though that Dynamic Compression is only one aspect of the Compensation Plan, and that Fast Start, and the Performance Pools are significant components too, and that compensation needs to be looked at as a whole. You may loose some of the Dynamic Compression payments as you get to Blue Diamond, and Presidential Diamond and payments that were finding their way to you fall to others, but at any of the payment ranges for a Blue Diamond or Presidential Diamond you are going to be OK.

Why would you place at depth?

In Part 6 of this series on Placements we examined the idea of Tap Rooting.

Tap rooting is the primary reason you place at depth. You are either looking for your own leaders and building downwards to concentrate volume for OV based ranks until your engaged long term leaders emerge, or you are working to support your leaders and their leaders to create sustainable paid rank achievement.

Let’s take a practical example. You have an active builder named Holly on your third level. She has reached Premier, but her Executives Gertrude and Wilhelm haven’t been effective yet at engaging people with the Loyalty Rewards Program. So each month enrolments go in, and each following month there is very little sustaining volume. One day you meet and enrol a waitress named Carol, and she is a really confident woman with a massive group of friends. Let’s say you are Gold and Holly is a great leader, but still learning. You are confident she will ultimately succeed, she is walking towards you and taking action, but her team is still new. It is probably too early to try and add a fourth leg and make Carol your 4th frontline, because you aren’t sustainably hitting Gold each month. So you place Carol down under Gertrude, not on Gertrude’s front row, because Gertrude is building, and has her sister Nancy on her front row. So you place under Nancy. The volume Carol creates can now help Nancy get to Elite, which can be a ranking leg for Gertrude to get to Silver, which can be a ranking leg for Holly at Platinum or Diamond, which means Holly can be a ranking leg for you at Presidential Diamond.

This is why we place at depth. There are not many people who enrol other people hand over fist themselves and can rank quickly without much support. To get to Diamond you will have three Silvers and twelve Elites and probably 1/2 to 3/4 of those Elites will need the help of you and your Silvers to create sustainable volume that lets the both of you achieve paid rank each month. At Presidential Diamond you have 6 Platinums, 18 Silvers, and 54 Elites. Chances are there will be some of those Elites still learning how to create sustainable volume, and chances are some of those Elites won’t even be people identifying as Builders or even Sharers. Tap Rooting at depth is a critical component of Placements to create sustainable businesses.

Power of Three

One of the elements of placement that is  counter to the placement at depth philosophy is Power of Three. Power of Three was covered in detail in Part 4 of this blog series.

I won’t go into Power of Three in depth here. You just need to know that one of the other aspects of placement that needs to be weighed up is Power of Three. As I covered in the post with respect to Power of Three there are some teams that weight Power of Three as critical and have methodologies to make that work for them and their team as a factor that is weighted heavily. Our tree and our uplines have paid attention to Power of Three as one factor amongst many, but do not weight it heavily in our placement strategies.

In that regard then talk to your uplines which was the key message in Part 1 of this blog series.

Mindset : Abundance v Scarcity

One of the biggest questions people tend to have over placing at depth is the apparent loss of Unilevel Commission as more Silver and above leaders emerge in your team and you loose some of the Unilevel you were getting from well beyond seven levels.

I do not advocate being dismissive of an awareness around placing at depth, and the fact that it will cost you some Unilevel. It is a fact, it’s real, and it forms a part of your bigger picture.

What I know about the dōTERRA culture propagated by the owners however is that we care for one another, we come from a place of servant leadership, and it’s not about us. Abundance comes to us from truly serving others first, which is how dōTERRA have succeeded.

My ‘Why’ is about creating abundance for others, and claiming freedom and the ability to live a life of free choice, of time freedom, and of fulfilling our soul purpose. I can best achieve that by creating as many Diamonds or preferably in my view Blue Diamonds or above as I can. In turn I can best achieve that meaningfully if I can use tap rooting to build strong foundations for my business, and theirs.

As we become people visibly achieving this dream and doing so repeatedly, successfully, and sustainably, we become magnets for those wanting the mentoring, the training, and the support for creating freedom in this way. More people see what we are doing is real and come knocking on our door to join our team.

If in the alternative we adopted an attitude at extreme of the scarcity end of the spectrum, and if we saw others as competitors for our Unilevel Commission, or if we begrudged helping our leaders by placing our own enrolments of sharers and builders at depth, then that retracted energy can be felt. The fact that we are serving ourselves first and foremost can be felt.

There is a truth to the fact that when we give more comes back to us. As the gift of volume from tap rooting at depth plays out, it wakes up people higher in our tree, who might otherwise have lost belief in dōTERRA. Sometimes it turns product users into Builders higher in our tree because they have seen the power of this business and the generosity of its Compensation Plan.

Adopting an Abundance Mindset with respect to Placements, and to Depth is I believe a very important element of the judgement we bring to Placement decisions. It does not stand in isolation, and all data is relevant, but abundance is a great mindset and value to hold.

Most of all I believe as we achieve the higher ranks we are rewarded with substantial performance pools to think of others and to be giving and abundant in our thinking. After Blue Diamond we will not want for a lot.

Stages of the Journey

There are stages to the dōTERRA journey and in different stages there are different roles we need to play, and different focuses we need to bring to bear. Those stages have relevance to depth too. As we are creating our own tree depth serves us in concentrating volume to produce our initial leaders at the tops of strings. As we find leaders in our tree who really want to build and go to Diamond or above, depth helps us support their leaders until their long term leaders show up and find their feet. As we attain ranks and then work to make paid rank repeatable and sustainable depth helps support us.

Later in our journey once we have our own leaders at Platinum or Diamond they are deeply engaged as the creators of their business, our focus can begin to change a little. We continue to maintain a mindset of abundance, love and support, but there is less asked of us in filling holes in our tree, and any personal enrolments we get can be placed perhaps with a different mindset. We can afford to reserve obviously great leaders for our front line, or somewhere high in our tree. We might start to contemplate the journey to Double Presidential Diamond, but that journey is supported with a different level of abundance and perhaps some different drivers.

In my view using depth all the way through to Diamond is an important element of strategy. I hold some caution as I place and I look to have the impact I can have with my personal enrolments as high in my tree as I can, but first comes supporting my people, and I will do what I need to do with a full heart.

In Summary

So lets summarise the key learnings around how Depth should shape our decisions with respect to Placements:

  1. Dynamic Compression ensures that 7 Levels of Payment get paid out on all volume, and as a result we can get paid on far more than 7 levels, and particularly after we have achieved Silver.
  2. After Diamond as more of our own leaders achieve Silver or above, the degree to which Dynamic Compression brings payments to us from very deep in our tree decreases.
  3. Tap rooting at depth in our tree is a critical tool for supporting our leaders and creating a sustainable business where we can achieve Paid Rank every month.
  4. Power of Three is one of the factors that needs to be weighed in as part of an assessment of depth if Power of Three is a critical part of the success strategy of your upline’s team.
  5. A mindset of Abundance is a critical tool in engaging our leaders and repays us immensely both with their engagement and with what it attracts to us in the world.
  6. Depth is a tool like many others that may have a differing level of focus and importance as your journey from Consultant to wherever you see yourself going unfolds.

I finish every part of this blog series by taking us back to the importance of consulting with your uplines to tap into their wisdom that we talked about in Part 1 of the series.

Ura P Auckland
Diamond Leader with Petah-Jane Auckland-Hall
Essential Oils Entrepreneur – Earth Spirit Pathways
Writer, Facilitator & Public Speaker at Authegrity

Image Attribution : Unilevel Table is an extract from the dōTERRA Compensation Plan graphic.

Placement Series Table of Contents

Placements Part 1 – Upline Wisdom
Placements Part 2 – The Human Element
Placements Part 3 – Truly Serving Creates Success
Placements Part 4 – Power of Three 
Placements Part 5 – Two Legs to Premier
Placements Part 6 – Tap Rooting

2 comments

  1. Thanks for taking the time out to share your knowledge on placements, building in depth and dynamic compression. I finally get it, so thank you!! I am currently at silver and this information is crucial to be able to support my team to continue to grow and understand the business :).
    Truely grateful x

    Liked by 1 person

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s