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Binary MLM Compensation Plans - 5 Features You Need To Grasp
Binary MLM plans are actually widespread these days, so here are a few tips from my own experience.
First, for the newbies, binary MLM pay plans have one defining characteristic: you have just 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 issues you should recognize if you're considering joining a binary MLM compensation plan:
1. Use fear of loss to motivate recruiting.
In a binary, each person who signs up is placed below the person who joined before them (in that leg.)
Not only does this offer "overflow" to your downline, which encourages cooperation 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 below you. If not, that's cool... I'll just place you beneath them when you are ready to join."
There are "powerline" systems that automate this. It's ultra powerful stuff.
2. Position is significant.
Negotiate your position with your sponsor with forethought.
Some positions get more overflow than others. Your sponsor is going to want to place you where it helps 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 flip side, insisting 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 build your business.
There is no obvious answer, which is why my advice is just to tread carefully. Don't just hop in without reasoning it through and discussing it with your sponsor.
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 top position and a complete company worth of overflow, a binary MLM still won't pay you a dime unless you recruit yourself. Overflow has to be paired with volume you bring to the table for it to be worth anything. So, don't go into a binary thinking that you're going to get something for nothing.
Also, when enrolling someone it's okay to show them about the overflow they may receive, but make sure they appreciate TNSTAAFL. It won't eliminate 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 downline to sponsor 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 enroll should go "inside," on the other leg.
The order is essential... a lot of people enroll in an MLM recruit 1 person and throw in the towel. If that 1 person was placed outside, they will get overflow from their upline. If not, they will be working their business alone 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 "merged" with a unilevel, coded bonus, or other compensation plan, those problems can be easily resolved. These hybrid plans-particularly the binary/unilevel-have proven to be very stable and fair to distributors.
They are the BMW of contemporary MLM pay plans.
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