Binary MLM plans are unquestionably prominent today, so here are a few lessons from my own experience.
First, for the uninitiated, binary MLM pay plans have one distinctive characteristic: you have just two "legs" in your group... a team leg and a pay leg. Everyone you ever enroll will be placed in a direct line, one under the other, down one of those two sides.
Here are 5 issues you should appreciate if you're considering joining a binary MLM compensation plan:
1. Use fear of loss to motivate recruiting.
In a binary, each customer 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 collaboration and retention, but the skilled MLM sponsor can use this to drive recruiting.
"I have 5 people's paperwork in front of me on my desk. If you sign up right now, I'll enroll all 5 of these under you. If not, that's cool... I'll just enroll you beneath them when you are ready to join."
There are "powerline" systems that automate this. It's compelling stuff.
2. Position is vital.
Negotiate your position with your sponsor delicately.
Some positions get more overflow than others. Your sponsor is going to want to place you where it pays 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 opposite 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 mentoring you to maximize your business.
There is no obvious solution, which is why my suggestion is just to tread carefully. Don't just hop in without reasoning it through and talking to 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 finest position and a whole enterprise worth of overflow, a binary MLM still won't compensate you a cent unless you recruit yourself. Overflow has to be matched with volume you bring to the table for it to be beneficial. So, don't enroll in a binary reasoning that you're going to get something for free.
Also, when sponsoring someone it's great to show them about the overflow they may receive, but make sure they recognize 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 organization to enroll outside then inside.
The first person you recruit 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 recruit should go "inside," on the other leg.
The order is paramount... a lot of people enroll in an MLM sponsor 1 person and throw in the towel. If that 1 person was placed outside, they will get overflow from their sponsor. If not, they will be working their business by themselves forever.
To shelter against that, you should always teach "outside, inside."
5. The most stable binaries are hybrids.
Vanilla binary MLMs are no longer state-of-the-art. In fact, there were several problems with them.
But, when "combined" with a unilevel, coded bonus, or other commission plan, those issues 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 payment plans.
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Binary MLM Compensation Plans - 5 Issues You Need To Remember