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Binary MLM Compensation - 5 Things You Should Understand
Binary MLM plans are undoubtedly popular now, so here are a few thoughts from my own experience.
First, for the uninitiated, binary MLM pay plans have one definitive characteristic: you have only two "legs" in your organization... a team leg and a pay leg. Everyone you ever sponsor will be placed in a direct line, one under the other, down one of those two legs.
Here are 5 facts you should appreciate if you're thinking of joining a binary MLM compensation plan:
1. Use fear of loss to push 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 provide "overflow" to your downline, which encourages cooperation and retention, but the astute MLM sponsor can use this to drive recruiting.
"I have 5 people's enrollments here on my desk. If you join right now, I'll enroll all 5 of these beneath you. If not, that's cool... I'll just enroll you under them when you are ready to join."
There are "powerline" systems that automate this. It's powerful stuff.
2. Position is crucial.
Negotiate your position with your sponsor with caution.
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, 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 maximize your business.
There is no clear best solution, which is why my advice 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 perfect position and a complete company worth of overflow, a binary MLM still won't pay you a penny unless you recruit yourself. Overflow has to be matched with volume you generate for it to be worthwhile. So, don't join a binary reasoning that you're going to get something for nothing.
Also, when sponsoring someone it's cool to reveal them about the overflow they may receive, but make sure they appreciate TNSTAAFL. It won't destroy the enrollment... 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 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 called your "outside" leg.
The second person you sponsor should go "inside," in the other leg.
The order is essential... a lot of people enroll in an MLM recruit 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 by themselves forever.
To guard 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 a lot of problems with them.
But, when "combined" with a unilevel, coded bonus, or other pay 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 BMW of modern MLM pay plans.
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