WORK THE PLAN

WHEN YOU ARE CLEAR ABOUT WHAT YOU ARE WORKING
FOR, you are ready to focus on how you are going to
get it. It’s time to take a look at how different companies
pay their representatives.
Every network marketing company has a compensation plan or a marketing plan that sets out clearly what you have to do to get what you want.
The common denominator of all legitimate plans is that payments are based
on the sales you generate, both from personal sales and the
sales of people you recruit. The higher your total sales, the more you will earn. If you are lucky, the plan will be simple and easy to understand. But many plans seem confusing and complicated, especially to newcomers.
Don’t be deterred. As the business has developed, so have the plans. Most good ones specifically focus on key behaviors required to build a successful downline organization. A strong downline—that is, the people you recruit and train and from whose sales you also earn a commission—is at the heart of success. As you learn the plan, you are learning what you must do to maximize your income.
If you understand the plan you can explain it clearly and enthusiastically to prospective recruits. When you do a good job they, in turn, will be able to explain it clearly and enthusiastically to their prospective recruits. Now your entire organization is focusing on the most productive areas.
 

This is what you need to know regardless of what plan you are working with:
The most basic principle of network marketing is duplication—
selling product, and recruiting others to sell product and recruit others, over and over and over. This is what all plans are designed to encourage and reward.
You will be paid a percentage of the total sales you generate, usually monthly, although some companies work on four-week, two-week, or one-week cycles.
Your percentage will increase as you reach and maintain
higher levels (also known as ranks). This is designed to encourage
you to build your business and reward you for consistent
performance.
Your rank is based on your personal sales and the sales of everyone you recruit, both directly (known as first levels) and indirectly (the people your first levels recruit down the line, known as second and third levels, etc). Collectively, these people are known as your personal group (or downline).
 

How quickly you reach each rank will depend on how hard you work and how skilled you are at marketing your products and your business opportunity.
If you grow your business steadily, your income will rise month by month, subject to the fluctuating demand for your products throughout the year.
 

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Most companies allocate approximately the same percentage of total sales to pay their representatives. However, each company structures its plan slightly differently. As one example, some plans pay a small percentage on the sales of everyone you recruit, whereas others require that you recruit a set number of people and reach a combined sales target before you are paid on your recruits. Another example is the difference in how much you have to sell personally to earn higher commissions.

The four most common plans currently in use (making up 98 percent of all plans) are:

    1. Stairstep or Breakaway
    2. Hybrid Unilevel or Unigen

    3. Forced Matrix
    4. Binary

The following brief description of each will help you make sense of them:
 

STAIRSTEP OR BREAKAWAY PLANS
Stairstep or Breakaway Plans have been around the longest and are used by approximately 62 percent of companies. The key details are:

✯ There is no limit on how many people you can recruit.
✯ There is no limit on how many people you may have as first levels (your top line).
✯ Your personal recruits (first-level) form a new line (or leg).
✯ The people they recruit become your second levels, third levels, etc.
✯ You earn commission on your personal group (your top line and the people they recruit).
✯ To qualify for commission you are expected to meet a monthly personal and group target.
✯ You climb ‘‘stairs’’ to qualify at each level, where you are rewarded by higher percentages.
✯ You earn commission on your breakaway groups (legs that achieve a higher rank) as long as you stay ahead of them by being promoted to a higher rank yourself.
✯ The more first-level recruits you have, the stronger your business will be, because when one recruit breaks away you have others to maintain the balance.

Companies using Stairstep or Breakaway Plans include Amway, Mary Kay and Longrich.

HYBRID UNILEVEL OR UNIGEN PLANS
Hybrid Unilevel or Unigen Plans are used by approximately 18 percent of companies. The key details are:

✯ Similarly to Stairstep/Breakaway Plans, Hybrid Unilevel or Unigen Plans pay commission on personal and breakaway groups.
✯ You are encouraged to recruit your customers, who are commonly known as Associates or Members.
✯ Associates receive wholesale buying privileges and may order directly from the company. Although they mostly buy for themselves, some service a small customer base.
✯ You generally earn a higher commission on personal recruits than with other types of plans.
 

Nu Skin is an example of a company using this type of plan.
 

FORCED MATRIX PLANS
Forced Matrix Plans are used by about 12 percent of companies. The key details are:

✯ There is a limit to how many people you may personally recruit across your top line (this is known as a limited matrix).
✯ Your personal recruits are one line below you, meaning your direct recruits are known as your second level, your second level recruits are known as your third levels, etc.
✯ The number of downline levels (called depth) you may have is also capped.
✯ Any people you recruit over your limit will drop a level. This is known as spillover.

Melaleuca is one example of a company with a Forced Matrix Plan.
 

BINARY PLANS
Binary Plans are used by about 6 percent of companies. The
key details are:

✯ You can only recruit two people, or legs, as your first levels.
✯ Any additional first-level recruits become your second levels, etc.
✯ You are paid on the sales of the weaker of your two legs.
✯ You may be allowed to carry unpaid sales forward.
✯ Some plans allow you to form a second matrix.
 

Companies using Binary Plan include USANA, Global Wealth Trade and Helping hands International.

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Understanding Your Plan
You only have to learn it once, and it will fall into place as you put it into practice. Taking the time to understand your plan will give you the knowledge and confidence to share it with others. A cursory knowledge of other types of plans may help you deal with questions from prospective recruits.

To separate the key points of your plan from jargon and hype, look for the answers to these questions:

✯ What will I be paid on my personal sales?
✯ How much must I personally sell to earn the highest commission on my sales?
✯ What will I be paid on my first-level recruits, that is, the people I personally recruit?
✯ What will I be paid on my personal group, that is, including my indirect recruits (the people recruited by the people I personally recruit)?
✯ How much must my group sales total for me to earn the highest commission on its sales?
✯ What will I be paid on my breakaway groups?
✯ What do I have to do to be paid on my breakaway
groups?
✯ What will I be paid on my total business?
 

Additional questions to ask yourself are:

✯ What level on the plan will I aim for?
✯ What do I have to do to reach that level?

The most appealing aspect of all plans is that they clearly mark out key mileposts en route to your destination. Once you calculate how much time you will allocate to your business and factor in your current skill level, you will be able to set a realistic rank to aim for in your first year. This will enable you to calculate your income.


Culled from Be a Network Marketing Superstar by Mary Christensen with Wayne Christensen