User:Cyberherbalist/ACN
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[edit] Compensation Plan
ACN's compensation plan[1] is a variety of the commonly seen stairstep breakaway plan. The plan has seven positions, the first being Team Trainer (or TT). Team Trainer is not earned, per se, but is the first position the representative holds after paying the initiation fee. The remaining positions required the acquisition of customers and sponsored representatives to achieve. With each higher position the representation is eligible for greater compensation as customers are obtained.
To understand the requirements for achieving each of the "earned" positions, an understanding of Phone Points and Customer Points must be achieved.
[edit] Phone Points and Customer Points
A frequent mantra in ACN recruiting literature is the phrase "No compensation is earned in ACN unless customers are obtained." Representatives are qualified in their positions according to the number of "phone points" or "customer points" they achieve, in addition to sponsored representatives obtained.
[edit] Points
Points are awarded for the sale of ACN services to customers. Generally, one service is worth one point, but a few services count for more. For example, a long distance customer counts for one point, but a VoIP customer counts for two. Cell (or mobile) phone customers count anywhere from one to four points, depending upon the plan selected by the customer.
Once a customer is obtained, the appropriate number of points are awarded to the representative, and those points continue associated with the representative for as long as the customer is retained.
[edit] Phone vs Customer Points
A "phone point" is a "customer point", but not all "customer points" are "phone points". The difference is that a "phone point" counts for qualification of position, but a "customer point" does not. The only services that currently count for only "customer points" are dial-up internet and DSL.
[edit] Earned Positions
- Qualified Team Trainer (QTT) - 5 Phone Points
- Executive Team Trainer (ETT) - 5 Phone Points and two direct-sponsored QTTs
- Executive Team Leader (ETL) - 10 Phone Points and three ETTs in three separate representative legs
- Team Coodinator (TC) - 200 Phone Points in each of three separate representative legs
- Regional Vice President (RVP) - Since July 2007 there are two levels of RVP
- 3-Star RVP - 3 TCs in three separate representative legs and total organizational billing volume of at least $50,000.
- 4-Star RVP - 4 TCs in four separate legs and at least $75,000 in total organizational billing
- Senior Vice President (SVP) - 6 TCs, RVPs or SVPs in each of six separate legs, with at least 3 of these six legs containing an RVP and at least $500,000 in monthly billings in his total downline organization.
[edit] Compensation Types
[edit] Residual Income
Residual income in ACN is received by representatives as a commission for personal customers. It is called "residual" because it is paid on already-acquired customers who continue to pay their ACN phone bills. ACN claims to have the highest customer retention rate in the telecommunications industry, and attributes this to most customers having pre-existing family- and friendship-relationships with their representatives, as well as to excellent customer service. ACN also designs its telephone pricing to compare favorably with about 80% of their competitors' plans, which provides an additional incentive for customer loyalty.
The commission rate for personal customers starts at 1% of customers's billings, and goes up according to a sliding scale with steps at each $2,000 level. To earn 10% of a customer's billing, for example (which is the highest rate in the compensation plan), a US representative must have at least $10,000 in total monthly customer billings. Assuming an average customer bill of $38 (a common figure used in ACN training), this would require over 250 direct customers for a residual income of $1,000 per month. Since ACN's highest recognition (in terms of awards) is for a customer count of 50, ACN representatives who acquire 250 or more customers are certainly in the minority, although this is not unknown[2]
[edit] Overriding Residual Income
[edit] Customer Acquisition Bonuses
[edit] Products
ACN's founders conceived the company with a deliberate focus on services rather than the more common approach of other direct-selling firms of marketing products. They chose telecommunications services because of the near-universality of the existing market. ACN began its history as a mere selling agent for actual long distance providers, but in 2000 began offering its own long distance product. Eventually the company branched out into other services, including local calling (2003), digital phone service (Voice over Internet Protocol, or VoIP) in 2005, creating its own VoIP network in 2006, and wireless (mobile/cell) phone service in 2007.[3]
[edit] Long Distance
ACN's original product, long distance is still the company's mainstay. Initially ACN was merely the marketing arm of a long distance firm in Michigan, but when that company was bought out by Qwest a few years later, ACN began offering long distance service directly.
One important part of ACN's long distance pricing is ACN to ACN free calling. This means that an ACN customer calling another ACN customer within their home country (and between the U.S. and Canada) are not charged for the call. In theory, an ACN customer could convince everyone they frequently call over long distance to also become an ACN customer and thus pay only the monthly service fee. This incentive for customers to recruit other customers could mean that ACN would be unable to make a profit on its long distance service, but in practice this is something that has not occurred: for ACN's first several years of existence it offered nothing but long distance, and still made a profit each year.
[edit] Local Telephone Service
[edit] Digital Subscriber Line (DSL)
[edit] Dialup Internet
[edit] Digital Telephony
[edit] Voice over Internet Protocol (VoIP)
[edit] Video Phone
[edit] Wireless (Mobile/Cell Phone)
[edit] Cable TV (Future)
[edit] Energy Marketing (Discontinued)
Formerly ACN, through the subsidiaries ACN Energy and ACN Utility Services, operated as a gas and electricity retailer. ACN's energy assets were acquired by Commerce Energy Group in 2006.[4][5]
[edit] Court cases
On 19 March 2007, ACN France was found guilty and fined €15,000 for its use of misleading advertising. Inspectors created a simulation which found that only representatives with a position of "Team Coordinator" or higher (less than 1% of total qualified independent representatives) could potentially earn a satisfactory income (defined as €1,345 per month). The position below "Team Coordination", "Executive Team Trainers" (less that 8% of total qualified independent representatives) could only earn a meager income or possibly lose money. Qualified independent represents consist of the representatives that have reached the level of "Team Trainer" or higher. [6]
On 15 November 2004, Australian Communications Network Pty Ltd (the Australian branch of ACN inc.) was investigated by the Australian Competition and Consumer Commission (ACCC) for alleged breaches of the Trade Practices Act 1974 in regards to provisions in the act relating to pyramid schemes.[7] On 23 March 2005, ACN was found by Justice Selway to have participated in, promoted and induced or attempted to induce persons to take part in a pyramid selling scheme. A federal court appeal later reversed the earlier decision made by Justice Selway. The ruling indicated that the alleged "recruitment payments" did not fall under the definitions of the law. The ACCC was ordered to pay court costs.[7]
[edit] See also
[edit] References
- ^ ACN Compensation Plan Description, rlsd 6/15/2007
- ^ Williams, Megan (March 18, 2007). Megan Williams trains on the details of acquiring a VoIP and an ACN Wireless customer. Ogden, UT March 17, 2007 (audio training).. Megan_Williams__VoIP_and_Wireless__88.mp3. Retrieved on 2007-09-20.
- ^ ACN, Inc.. ACN Story. Retrieved on 2007-07-29.
- ^ Commerce Energy Group Inc (filing date February 10, 2005). Item 2.01. Completion of Acquisition or Disposition of Assets, Form:8-K. Retrieved on 2007-07-06.
- ^ Krippel, Julie. ACN, Inc. information and related industry information from Hoover's. Hoover's. Retrieved on 2007-07-08.
- ^ SAS ACN Communications France v Paris [2007] TGIP 2 (PDF). Retrieved on 2007-07-06.
- ^ a b Full Federal court upholds ACN's appeal against pyramid selling decision. Australian Competition and Consumer Commission.
[edit] External links
- ACN Inc. information from Hoover's. Hoover's Inc.. Retrieved on 2007-05-08.
- ACN Inc. website. Retrieved on 2007-05-08.
US-company-stub
Category:Communication Category:Multi-level_marketing
[edit] old stuff
[edit] Positions
As of mid-2007, ACN's compensation plan has seven positions. Of these, all but the first are referred to as "earned positions," and are achieved through the acquisition of customers and/or recruits.
[edit] Team Trainer (TT)
This first position is not "earned", but is purchased by the new recruit. The price of the position in the United States is $499 (as of 2007). This is a one-time expense; renewal of the position requires a payment of $149 each year at the time of the recruit's anniversary. The renewal fee does not vary by position, and is paid by all representatives.
The name of this position is indicative of the fact that, in order to earn significant money from ACN, the new representative will need to recruit others to become part of his or her team. While it is possible to earn a living strictly from gaining personal customers in ACN, it is more difficult to do so when compared to other MLM companies due to the relatively low commission rates on individual customers.
[edit] Qualified Team Trainer (QTT)
This is the first earned position, and it is achieved strictly by obtaining customers. Qualification is not a matter of customer count, per se, but is measured according to how many "phone points" a representative has. Seven was the more usual number of phone points required during much of ACN's history. However, this figure has varied from a low of five, to a high of eight, which is where it currently sits. Since expanding out of a long-distance-only product offering to being able to offer local service, Internet, VoIP and cell phones, it has become possible for a representative to qualify without acquiring any other customers than himself, however, ACN now makes it a requirement for a representative to have at least half of his qualifying points to be from someone other than himself.
The qualification aspect of the position is more a matter of how the representative's upline sponsors benefit from qualification than the how the representative benefits himself. What this means is that once a representative is qualified, it enables his immediate sponsor to be promoted to the position of ETT (if the representative is one of the sponsor's first two direct recruits to qualify). It also means that, if the representative qualifies in his first 30 days in the business, his upline (ETT and above) may receive Customer Acquisition Bonuses as a result.
A Qualified Team Trainer's compensation is determined strictly by the billings of his own customers and those of his downline recruits; he is ineligible to receive Team Customer Acquisition Bonuses.
[edit] Executive Team Trainer (ETT)
This position is earned by Qualified Team Trainers who have 12 personal phone points and two direct-recruited representatives who have become qualified.
[edit] Executive Team Leader (ETL)
ETL is earned when a qualified team trainer (holding the ETT position is not required) has 20 personal phone points and two ETTs in two separate "legs", or recruit representative lineages. The ETTs need not be direct recruits to the ETL.
[edit] Team Coordinator (TC)
A representative earns Team Coordinator status when she has at least three separate "legs", each of which has a total of 200 customer points.
[edit] Regional Vice President (RVP)
The title "Regional Vice President" seems to imply some sort of relationship to a corporate structure (because "vice president" is a corporate title) and appears like it is related to a particular geographic region, but it is neither. The name seems to have been chosen so as to give the position a clearly higher status than Team Coordinator.
Since mid-2007 there are two different levels of RVP: "three-star" RVP and "four-star" RVP. Formerly there was only four-star RVP, called simply "RVP". A representative first becomes a Regional Vice President when her organization achieves three Team Coordinators in three separate representative legs, and her total organizational billing volume reaches at least $50,000. Three TCs, thus the three "stars". Four-star RVP is achieved when she has four TCs in four separate legs, and at least $75,000 in total organizational billing.
[edit] Senior Vice President (SVP)
The highest representative position in ACN is called Senior Vice President. The requirements for becoming an SVP are considerably advanced over four-star RVP. To achieve SVP status, the representative must have six Team Coordinators, RVPs or SVPs in each of six separate legs, with at least three of these six legs containing an RVP, and the representative must have at least $500,000 in monthly billings in his total downline organization.
Due to the significantly increased requirements over RVP there are many more RVPs than SVPs in ACN. The monthly billing requirement alone is equivalent to 0.1% of ACN's claimed annual revenue for 2005.
