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Binary MLM Compensation Plans - 5 Things You Ought To Remember
Binary MLM plans are actually in favor today, so here are a few thoughts from my own experience.
First, for the newbies, binary MLM pay plans have one defining characteristic: you have just two "legs" in your organization... a left leg and a right leg. Everyone you ever partner with will be placed in a straight line, one after the other, down one of those two sides.
Here are 5 facts you should understand if you're considering joining a binary MLM compensation plan:
1. Use fear of loss to push recruiting.
In a binary, each person who joins is placed under the person who joined before them (in that leg.)
Not only does this provide "overflow" to your team, which encourages collaboration and retention, but the astute MLM sponsor can use this to drive recruiting.
"I have 5 people's paperwork here on my desk. If you join right now, I'll enroll all 5 of these underneath you. If not, that's cool... I'll just place you underneath them when you are ready to join."
There are "powerline" systems that automate this. It's highly effective stuff.
2. Position is vital.
Negotiate your position with your sponsor carefully.
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 helping you to build your business.
There is no crystal clear solution, which is why my advice is just to tread carefully. Don't just join without reasoning it through and talking to your upline.
3. TNSTAAFL.
Readers 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 prime position and an entire organization worth of overflow, a binary MLM still won't compensate you a penny unless you recruit yourself. Overflow has to be balanced with volume you bring to the table for it to be worthwhile. So, don't join a binary thinking that you're going to get something for gratis.
Also, when recruiting someone it's okay to show them about the overflow they may receive, but make sure they appreciate TNSTAAFL. It won't destroy the sale... if anything, it'll prove 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 enroll 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 join an MLM sponsor 1 person and give up. 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 defend against that, you should always teach "outside, inside."
5. The best binaries are hybrids.
Plain binary MLMs are no longer state-of-the-art. In fact, there were a lot of problems with them.
But, when "combined" with a unilevel, coded bonus, or other commission 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 Cadillac of contemporary MLM payment plans.
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