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Binary MLM Compensation Plans - 5 Important Things You Need To Understand
Binary MLM plans are really widespread these days, so here are a few tips from my own experience.
First, for the newbies, binary MLM pay plans have one special characteristic: you have just two "legs" in your organization... a left leg and a right leg. Everyone you ever sponsor will be placed in a straight line, one after the other, down one of those two legs.
Here are 5 things you should grasp if you're thinking about joining a binary MLM compensation plan:
1. Use fear of loss to push recruiting.
In a binary, each person who joins is placed below the person who joined before them (in that leg.)
Not only does this provide "overflow" to your team, which encourages teamwork and retention, but the savvy MLM sponsor can use this to motivate recruiting.
"I have 5 people's paperwork here on my desk. If you join right now, I'll enroll all 5 of these below 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 ultra powerful stuff.
2. Position is important.
Negotiate your placement with your upline mindfully.
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 grow your business.
There is no obvious answer, which is why my tip 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 perfect position and an entire enterprise worth of overflow, a binary MLM still won't pay you a dime unless you recruit yourself. Overflow has to be balanced with volume you bring in for it to be worthwhile. So, don't join a binary thinking that you're going to get something for nothing.
Also, when recruiting someone it's great to tell them about the overflow they may receive, but make sure they understand TNSTAAFL. It won't eliminate the deal... 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 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 recruit should go "inside," in the other leg.
The order is important... a lot of people join an MLM enroll 1 person and drop out. 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 guard against that, you should always teach "outside, inside."
5. The best binaries are hybrids.
Vanilla 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 structures-particularly the binary/unilevel-have proven to be very stable and fair to distributors.
They are the Cadillac of contemporary MLM compensation plans.
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