Compensation plans for the most part are overrated when it comes to building a long term residual income. What is real important though is the culture you build within your company’s compensation plan. Basically 4 types of plans have dominated the industry – the first 2, I would refer to them as Socialistic plans – Unilevel, Matrix (only 1 company has made it work for more than 10 years). The primary purpose of these plans is too basicially help distributors make enough money so their product could be paid from their commissions.
The other 2 plans I would refer them to be Capitalistic plans they are the Breakaway MLM plan (Most all the old legacy and pioneers in the industry have this plan) and the Binary plan.
Over the last 15 years of Network Marketing majority of the company’s that have launched have started with the Binary Compensation Plan with a hybrid addition.
The biggest reason new companies have decided on the Binary Plan it has the “Capitalism qualities” of the Old Breakaway comp plan with regards to paying the top 5%- 10% + the companies that have added the hybrid versions which has some of the socialistic parts of the UniLevel and Matrix plans…
Unfortunately though it is a plan that lends it self to developing a poor or weak organizational culture which will lead to the eventual downfall of the company.
Most everyone who starts in the Network Marketing industry from a business perspective really was sold on the benefits of residual income and the freedom that comes from this lifestyle . Frankly the Culture of an organization and or a company is critical to this Freedom. We all know if we build a home on a weak foundation that house at the first sign of any major weather adversity will fall down. So keeping this in mind your Business organization future will only grow and stay growing if the foundation is built with the right principles.
Now that you have an understanding on why it is so important to have a Strong Foundation lets look at how the Binary compensation plan is critical to this Foundation.
As I shared above the Binary Plan really lends itself to absolutely Culture killing long term killing, company killing DO NOT DO’S…
- Never allow placements above organizations already built ( this leads to fake integrity killing rank advancements and recognition). How would you feel if someone was placed above you after a year earning off of your organization? Exactly!!!!! How would you feel if you found out your superstar upline who qualified at the top rank in 10 months only built one leg? Of course your respect for her would definitely change.
- Power Leg Principle – This creates weakness no organization will ever grow long term on weak principles. Strength should always be your #1 Goal. Tell everyone who joins and teach this they need to build 2 legs and treat spiliage as a blessing.. Every other comp plan in the industry forces you to go wide and you rarely get any help. In a Binary all you have to do is build 2 legs, always remind yourself this. Take the Power Leg completely out of your vocabulary and your teams vocabulary.
- Placing people under people in the Binary for the purpose of getting them excited or enticing them into the business should not be your focus. You should always structure keeping your business in mind, be very clear on how you get paid. You will never be able to help your team unless you help yourself first . There is a reason on a Airplane they teach you in case of emergency always put the Oxygen masks on yourself first before helping someone else…..
Probably the next question that most who read this will ask “What if my company allows special Placements”? Well all I am telling you with 100% accuracy that eventually it will be the downfall of the company, history has proven this. Integrity is essential for your foundation of your business when company’s are recognizing LEADERS for something they did not do or LEADERS who are excepting these rank advancements and being recognized on stage without disclosing the details,will create major issues of trust, belief, and disrespect…
Ask yourself this question “Is it deceiving the organization?” Is Deceit a principle of weakness or strength?
The Binary Compensation Plan is definitely a powerful Captalistic plan with the added benefits of the Socialistic parts of the UniLevel and Matrix but when applied incorrectly it will destroy a company and distributorships from within..
Your choice what business do you want to have a Foundation of Weakness or a Foundation of Strength?