Binary MLM Compensation Plans - 5 Facts You Should Grasp
Binary MLM plans are really popular these days, so here are a few tips from my own experience.
First, for the uninitiated, binary MLM pay plans have one specific characteristic: you have only two "legs" in your downline... a team leg and a pay leg. Everyone you ever sponsor will be placed in a straight line, one under the other, down one of those two legs.
Here are 5 important things you should know if you're thinking about joining a binary MLM compensation plan:
1. Use fear of loss to drive recruiting.
In a binary, each individual who signs up is placed underneath the person who joined before them (in that leg.)
Not only does this provide "overflow" to your downline, which encourages teamwork and retention, but the savvy MLM sponsor can use this to drive recruiting.
"I have 5 people's enrollments right here on my desk. If you enroll right now, I'll enroll all 5 of these beneath you. If not, that's cool... I'll just enroll you underneath them when you are ready to join."
There are "powerline" systems that automate this. It's powerful stuff.
2. Position is important.
Negotiate your placement with your sponsor thoughtfully.
Some positions get more overflow than others. Your sponsor is going to want to place you where it benefits them the most, but be careful. If your sponsor places you at the top of their inside leg, you won't get any overflow unless they continue to sponsor.
On the other side, requesting to be placed to maximize overflow will help you... but it may not help your sponsor as much. So, they may be less willing to devote time and effort to assisting you to grow your business.
There is no clear answer, which is why my tip is just to tread carefully. Don't just hop in without thinking it through and discussing it with your upline.
3. TNSTAAFL.
Lovers of Douglas Adams' "Hitchhiker's Guide to the Universe" know all too well... There's No Such Thing As A Free Lunch.
Even with the best position and an entire company worth of overflow, a binary MLM still won't pay you a dime unless you recruit yourself. Overflow has to be matched with volume you bring in for it to be worth anything. So, don't go into a binary reasoning that you're going to get something for nothing.
Also, when recruiting someone it's cool to tell them about the overflow they may receive, but make sure they comprehend TNSTAAFL. It won't kill the deal... if anything, it'll sell them on you as a leader even more. And if you do lose them, you didn't want 'em anyway.
4. Teach your team to enroll outside then inside.
The first person you sponsor into a binary should go on the same side, either left or right, that your sponsor placed you on. This is known as your "outside" leg.
The second person you sponsor should go "inside," in the other leg.
The order is crucial... a lot of people enroll in an MLM enroll 1 person and resign. If that 1 person was placed outside, they will get overflow from their upline. If not, they will be working their business by themselves forever.
To protect against that, you should always teach "outside, inside."
5. The best binaries are hybrids.
Straight binary MLMs are no longer cutting-edge. In fact, there were many problems with them.
But, when "combined" with a unilevel, coded bonus, or other compensation structure, those problems can be easily solved. These hybrid structures-particularly the binary/unilevel-have proven to be very stable and fair to distributors.
They are the Cadillac of modern MLM compensation plans.
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