Just got this in…Lulu read the Friends, Lies and Network Marketing piece here and emailed me. The highlights…
“Today, I grudgingly reconsidered getting involved with Network Marketing because once again, I found a product I was excited about and could be proud of. Still skeptical of the business potential I jumped on board because of the simplicity of the marketing plan (The internet site is turn key, and affordable at $39.95/yr).
“In less than 4 months I have a unilevel downline of almost 200 people and I’m already at an executive level. This is more fun that I remember because of the good success that I’ve enjoyed so far. But I want to turn it up a notch and am not sure how to do it. I am already a leader in the fledgling company and hold a local meeting every Tuesday night. I also am a guest speaker for other area meetings to support not only my spread out downline but my uplines downline (other leg!)
“As I said, I have almost 200 people in my unilevel downline, but as for where they fall in the binary, I only have 13 of those on my left side. And, I can’t seem to get my left side team to do ANYTHING. My right side is the strong leg, fed by my upline as well as my downline and I have a TON of points to cash in on if I could simply get my left side going. But my Left side seems to be in a coma! Now, I seem to have signed up everyone I know and am tapped out for new prospects locally. I live in a small rural area and am quickly running out of ideas…I advertise Google but can’t afford it much longer…”
Your thoughts? Lulu had done NM 20 years ago, couldn’t get enough people interested in the product, and thought NM wasn’t for her. She was reluctant to try again…but did.
And now this pickle…
The old line companies tha have lasted long term are all Breakway plans. Check it out. May not be the easiest but you don’t get jacked like Lulu. You are in business for yourself to build it for you and your family, not to build it for the company. They already have the deck stacked to them. Just my opinion and I am involved with a breakaway.
At least she learned about how binary plans really work for only $39.95.
Paul Eilers
http://www.UptownNaturalsNutrition.com
H Lulu,
Don’t wait for your left side to do something, it is time to be a network marketeer again and bring some new people in. You may need to learn some new ways but there are always people we prejudge and overlook that really need what we have. You have obviously been successful in the past and can be again!
Best Wishes
Binary plans have caused more problems than any other pay plan.
Although she has been working hard she is not making the money she should. She must depend on the efforts of others and they don’t have the motivation she has.
Although she is being showcased as a success, the money is not there. She must now try to build up the other side to begin getting paid. That is not fair.
I have to agree with the earlier anonymous post. Everyone’s comp plan (yes, even unilevels) have breakage, and guide you towards what it takes to reduce it and earn more commissions. Feel blessed that you have a super-strong leg, and as the earlier post said, start putting all your customers and new downline on the weak leg! If you really have over 150 people on the strong leg, and downline leadership there to keep it strong, then shift back to only support there (3-way calls, etc.) and get out and prospect hard for your weak leg!
I wish you the best!
LuLu’s experience is exactly what I have seen happen to people I know in binary’s.
I personally know a lady who was making no less than $2000 per month in a binary. In a few short months she lost it all because her downline quit. They couldn’t get that one leg going and had exhausted all their prospects.
Every binary I’ve heard of works basically the same way and from what I hear, it is very difficult especially since your upline only adds people on one side and you build the other on your own.
Imagine 10 people adding one person per month and you adding one person to the other side per month.
Will they ever be even so that you earn all you deserve on your efforts?
Brenda Bunney
http://MLMSuccessBunney.com
brendab@brightok.net
Dear Lulu:
I’m not sure why you refer to your company as
fledging? If you have concerns that the company is in trouble financially then you have a decision to make. You can do as others say and build out that “problem leg” or you could consider moving to another company.
There are lots of company’s with good products out there. Many of these companies are represented here in our NMC community.
If the fledging company who is keeping a good percentage of the distrbutorship profits because of the binary pay plan and is having financial problems of their own then you have a questionable future with this company. Remember 95% of all start ups fail within the first 5 years. And only about 1-2% make it past 10 years.
Decisions, decisions.
Lulu,
You stated that you chose to get involved again in MLM because you found a product you could get excited about. Yippee! That is critical for your success and you have checked that box.
What would happen if you stopped paying attention to the pay plan and started sharing the product with people who raise their hand and fit your customer profile?
Is the product strong enough to KEEP you involved and sharing the opportunity despite the pay plan?
If not, then continue using the product and perhaps go in search of another company to build within.
Being “tapped out” of local prospects is no big deal since there are always more people OUTSIDE your geographic area than inside. Learn and master the ways to find others EVERYWHERE!
If you really love the product, you can share that enthusiasm and balance those sides. If not, then it is okay to look elsewhere.
Good luck!
EXPECT Success!
Jackie Ulmer
Six Figure WAHM MLM Training BLOG
I second the motion to be happy that you have an upline putting people in one side of your business. People do get upset about how a power leg grows so much faster but they would step back and think about other compensation plans they would realize that if it wasnt a binary those people probably wouldnt be under them at all. Dont worry, be happy, step up your personal recruting until you find a builder! Good Luck!
Here is my feedback on binary’s.
From what I have seen…none of them are the same. It all (sorry) depends upon the “greed factor” of the company.
I have seen good plan, poor plans, and WOW plans.
If you are in a binary plan…but have no option as to where YOU place your people…then you may want to look for a Plan “B”.
Example of an ideal binary:
Your personal downline would be organized into a two-team structure. All of your efforts will be focused on these two teams only.
This plan would be nothing like what is traditionally referred to as a “binary” plan. It has been modified to benefit the distributor.
* There would be no “Cycles” in the plan.
* No “binary creep” (fluctuating payout amount)
* No hard “cumulative” sales requirements
You see, the two team structure is a powerful building strategy and when coupled with spillover and cooperative team building, it will create growth and significant financial rewards.
This plan will give beginners a real chance at success and it also allows experienced NetWork Marketers the ability to get paid what they are really worth.
Hope this helps.
Matthew Adams
Max International
I make a nice income with a plan that isn’t “technically” a binary, but I can only count my strong leg as 50% toward qualification. I do not know what a “breakaway” plan is. Perhaps it would help if we had some explanation of the general compensation plans, and get the skinny on what ones really work…
All I remember about binary plans was when they worked they worked VERY well. That is, WHEN they worked.
Our company abandoned them a few years ago when they re-vamped our compensation plan. One of the reasons is because in many countries outside North America binary plans are illegal. Must be a good reason for that. Something about people being able to buy their way?
I am glad that our company is doing it the way they are now (so is the DSA by the way!). From what I’ve learned is avoid the binary like a plague
In reading the last couple blogs re ‘types’ of plans, I think there is a lot of confusion in the marketplace and I’m willing to bet most (particularly new) NMers don’t even realize that there are different ‘types’ of plans. I am (was) one of them.
The first company I was with had the ‘legs’ thing. I did a lot of work, did not make any real money and eventually dropped out (I do still use some of the products … just don’t ‘build the business’). I had looked at a few other compensation plans and just didn’t like the way they paid or, if you will, the ‘mouse print’.
What I liked about the company I’m now with is that there was no fee to sign up or yearly renewal fees. With a 250 investment (over a two month period), for as long as I purchase products from this company, even if my order is only $50 a month, I will receive a 5% bonus check on the retail value of my own personal purchases; even if I don’t ‘build a downline’. They pay well for ‘customers’ as well. I love ‘finding wholesale customers’ as opposed to ‘retailing.’ I love this product madly so this company was a really good fit for me.
Although I know there are differences in the way company’s compensation plans are set up I never really realized they had names.
My vote is with Rebekah’s comment … Kim … how ’bout shedding some light … maybe a pdf document … maybe an MP3 … maybe even a class on all the different types of comp plans with their official names and which plans make you the most money or what to look for in a company.
Venetta
http://www.aloecare4u.blogspot.com
Picking-up on Brenda’s point of ‘It is very difficult especially since your upline only adds people on one side and you build the other on your own. Imagine 10 people adding one person per month and you adding one person to the other side per month.’
I’m not defending binaries, but the point here is one of being paid for your efforts – with whatever else is pushed your way being a bonus.
Any NM business needs the continuous introduction of fresh people – and that’s the NM-er’s job.
Dear Lulu,
Not ALL pay plans are created equal.
I understand if you just love a product and have to have it, but if you truly want to make money stay away from Binary plans. You will NEVER balance out both sides.
I happen to be in a 5 year old company that has the most dynamic pay plan I have ever seen. It is a unilevel with dynamic compression.
What is dynamic compression?
The plan pays from the bottom up, and compresses up until ALL 50% is paid out.
NO BREAKAGE!
I read earlier, anonymous posted a comment that ALL pay plans have breakage, not true.
Our company also has more people making high six figure incomes than ANY Fortune 500 company and we are only 5 yrs old.
I wish all the best, before you complain about NOT making money, do your due diligence and find a company with a decent comp plan.
Otherwise just enjoy your product.
If you would like to see our plan,
go to http://www.learncomplan.com
bob@xgopros.com
Stairstep Breakaway refers to Multi-level marketing compensation plans featuring two types of distributors: managers and non-managers. Stairstep Breakaway is the oldest and most common type of compensation plan.
No matter what use term the company uses to call their sales managers: ‘executive’, ‘platinum’ or ‘Regional Vice President’, upon achieving a certain performance criteria, a distributor becomes a manager and “breaks away” from his or her original manager. The original manager loses his or her managerial overrides and, instead, receives a percentage override from the sales of the entire breakaway organization.
Personally, all the binary systems I have experienced and seen die an ugly death. As a distributor, it doesn’t really reward you unless you go recruiting, not that there is anything wrong with that, but if your primary activity is recruitment, it attracts the regulators and government. There are very few (I know a few) that are binaries and have survived up to today.
In the Philippines, there were about 10 to 20 different companies and they all had binary plans.
When you start talking to a regular businessman about left side and right side, or A and B, … they get confused.
But when you say, you get 10% of the sale, and 5% of the sales of your distributors, they can easily understand that.
The most easily understood plans are Unilevels and fixed Matrix plans.
But for me, the most advantageous plans long term are stairstep breakaways. Almost all the 20 year old companies are stairstep breakaways.
I agree with Matthew re the differences in binary plans.
They certainly are not all the same.
I returned to network marketing only recently after living in another country for over 10 years and found an entirely new arena … so have done a lot of research… and some of it painful trial and error.
My very first NWM company was AMWAY back in 1967 which was and is,I believe a breakaway.Even though I became a Direct Dist and “broke” a direct I didn’t make much money.
However, I loved AMWAY and still do because it introduced me to the world of dreams and money.
Even though Amway was NOT the company where I made the residual income which enabled me to live MY dreams for sooooo many years I still appreciate what Amway has done for all of us in this industry. (If you dont know what I am talking about do some research.)
I am in the same company as Matthew, Max International, and I just love it and everything about the plan and what the product is doing for me and ones I care about. Max especially rewards those of us who enroll customers who are called Preferred which is indicative of their status.
It DOES reward the new person IF the newbie is willing to WORK and talk to people which is what makes this NWM world spin. Because on the pay leg there is a 10% payout so the strong leg DOES count.
What is so very important about THIS pay plan for me is the long-term potential for that RESIDUAL INCOME which I have experienced for over 20 years!And this is a good one.
That is what one needs to be looking at for REAL WEALTH…in my opinion.
Of course, one must trust that the company will be around to pay this out so we must do our research.. which I have done.
Delayed gratification is an adult virtue and I don’t always have it either.. but in this.. because I KNOW what it is having lived it… I do have it.
NWM is the greatest adventure EVER!
Mary
Thanks to everyone for their input. I guess I was kind of vague on what kind of help I was seeking. This “fledgling” company is in it’s pre-launch phase, is already independently of the representatives well funded and has a fair binary compensation plan. My real dilemna is figuring out how BEST to find those outside my area to recruit into my left side. I have no intention of sitting back and “waiting” for my left side to do all the work for me. But every time I add a new member to my left that seems they’ll be a heavy hitter, they go flat. My biggest challenge is finding those people to add. THAT is really where I’m at a loss. Is there a good venue for seeking these people with common goals out?
Whatever the pay plan, most everyone in network marketing runs out of warm market contacts – sooner or later. It seems to me this dilemma isn’t about the pay plan; it’s about how to build a cold market business. Now it’s time to learn how to successfully build a cold market group of business partners. There are so many ways to do this. Of course, since one leg is weaker, put all of your new people there, assuming you can control where they are going. Good luck!
This is a description of the NuSkin compensation plan, which is a breakaway.
(1) When you start, you are part of your sponsor’s group. You only get 6% of your front level volume . . . nothing deeper.
(2) When you achieve a certain group volume, you “break away” from your sponsor, and now get an additional 9% on everyone in your downline, regardless of how deep . . . a big pay raise . . . but . . .
(3) When someone in your downline builds their volume to a certain level, they break away from you, and you only make 5% on their volume.
So, you can see when someone breaks away, they get a pay raise while their upline gets a pay decrease.
Here are the plusses and minuses:
+ When the rep breaks off and gets a pay raise, it is very motivating.
+ When someone breaks off of your group and the volume you get paid on decreases, it motivates you to build more
+ It builds a very stable organization. Once you break away, you are very motivated to keep your volume up, because if you don’t, your pay falls back from 9% of total volume to 6% of front level
+ Because of the above point, the plan really encourages reps to find customers to maintain volume.
– Your first few checks are peanuts.
– If someone does “fall back” is can be very demoralizing.
Walter Reade (from Wisconsin)
http://www.NetworkingTechTips.com
PlanBDeveloper said: Our company also has more people making high six figure incomes than ANY Fortune 500 company and we are only 5 yrs old.
Two questions:
(1) How do you define high six figure incomes?
(2) What is the total number of these people in your company?
If you don’t know the answer to these questions, you are just repeating a claim that cannot be substantiated.
Actually, don’t worry about the numbers. The comparison is wrong.
You should be comparing your company to other network marketing companies, not to Fortune 500 companies.
I know of one NM company that has over 700 people making six figure incomes (the average being $480,000 a year!).
Does that make their comp plan better? If not, then how does your comment shed any light on your company’s comp plan?
Walter Reade (from Wisconsin)
The first thing you need to do is qualify your prospects before signing them up, they need to be informed of what is expected of them to be successful. The mindset of throwing them in and seeing if they stick needs to stop, and that is the mindset of the MLM. It gives a bad name to the industry. You need to be more selective in who you bring in your business, remember this is a business, a (if your in the right company) multi-million dollar business. As far as running out of prospects cause your in a rural area is no excuse. We have many big money earners in my company coming from small towns and many in the same small town.
You just have to keep bringing in new people. I know I don’t ever count on anyone to do anything. Those that will, just do it. There will be those that need help and will come to you wanting advice. It happens to me too.
I am in a binary myself and I don’t count on my sponsor or upline to put people in, but I do know the people who are below me are loving the fact that they can see all the people I am putting in, at least on the one leg I am building right now. It does create quite a stir for people to see the new people coming in that they will be able to get paid on that business volume because of where they are placed in the comp. plan.
It does sound like you need a very strong but affordable marketing plan and I know you can do it if you put in some effort with online marketing. Not all online marketing has to cost you money. If it doesn’t cost you money, you are investing your time. Don’t forget to “brand” yourself in the process in case this pre-launch company doesn’t make it for the long haul.
Dear Lulu:
Re: Warm Market vs Cold Market
May I suggest a good book to read? Try Bob Burg’s Endless Referrals before you dive head first into the cold market. It’s called cold market because people can be very cold in their reception of your offer. Unless you are using the 12 Tips form Kim’s Manifesto.
You should never run out of warm market referrals. We have a very simple business cycle. We introduce people to the juice. They get a remarkable result and they naturally start telling others. Sixty Eight percent of all our sales last year were to customers only. Many who reorder month after month. We have had some of the best leaders come into the business from the customer base because of the power of the juice. They realize that not only have they gotten a benefit but so have their friends and they realize they have an opportunity for endless referrals. People come into the business because of the power of the juice not because they were hyped by the big money claims.
Much Success
Do you know what has really been a blessing about this thread?
Since Kim has been my mentor…pay plans like the ones listed here are secondary to me. Why? Because I am focused on my customers. The pay plan is just a bonus to me.
You see…if the company is a generous one…they will pay me handsomely for the customers that I do bring in.
I am now in a company that does that (it took 20 years of searching).
Yes, we are a binary…but it was modified to benefit the distributors. That is where the payvplan should be focused. Look at your plan…if YOU are not the focus of the plan…re-think your place.
Remember Kim’s odds…1 in 1,000 you will find that superstar. 2 in 10 will be your customer…a vital key in your business.
Every company is perfect…till you join it.
Matthew Adams
Max International
Lulu said she has done some Google advertising so I assume she has tracked the keywords that were working for her, so, the next step would be to create traffic using the “free” methods and focus on the keywords that got the highest conversions.
In other words, using signature lines, blog’s, forum postings, cross postings, commenting on other blogs, and creating articles, she can leverage the research she has already paid for. She knows the keywords that work, just focus on those.
Another factor in taking it to the next level is to ensure she has a “capture” page that does convert well. Is she offering something the web surfer would trade his/her name and email for?
Just my two cents worth.
Cenay Nailor
One criticism of binary plans is that you are never paid all the commission you’ve earned. Is that true? Let’s take those programs that pay 10% commission on the volume in your lesser leg, mentioning no names beings with A, ends with L and has GE in the middle ….
You’re never going to get 10% on all your volume, are you? You’re going to get 5% max, probably less as you haven’t balanced the legs. It’s just maths so there’s no point in complaining about it.
What if the company flushes volume? Is it volume that someone else put there anyway? Then you never earned it in the first place. I’d just like to introduce a dig at a certain weight loss patch company here (too many letters to do what I did above). If your credit card payment for your autoship fails (which it can do for any number of reasons) do they put it through again in a few days like every other company? No – they flush your volume and you lose it. Nice. Really makes you want to do business with these people.
Lots of people in one leg that you didn’t put there? Count yourself lucky. You now only have to do half the work of some poor sap who got under an upline who does zip.
I’m not trying to defend binaries. I hate them. Not because the company gains – let’s face it, the companies gain from whatever we do – but because they’re too complicated to explain to prospects and your team gets disillusioned and confused by it all. Who needs it? We just want to sell to customers and earn commission.
planbdeveloper,
In response to Walters’ comment above.
1) Q: How much in sales does your business do a month?
A: David has been in XanGo™ for 4.5 years and his business does $22 million in sales per month. For those of you that think that’s impressive allow me to blow you away.
David’s business does more sales in a month than Oreo Cookies, and he built it from his bedroom with no risk, no employees, and no liability.
2) Q: What do you say when people ask if XanGo™ is such a good product why didn’t they use traditional business to distribute it?
A: The top 7 nutritional supplement company’s in the country are network marketing companies. That’s right, GNC is number 8!!! What would you do if you were XanGo™ coming out with a new supplemental health beverage? The top 2 cosmetic companies in the country are network marketing companies. Revlon is # 3!!
3) Q: What do you say to distributors that are cross recruiting you into another company?
A: I just give them the facts. Over 700 people making over $10,000 a month. Over 70 people making over $50,000 a month. 12 people making over $100,000 a month. Two people are making over $200,000 a month.
That is more people making more money than any other company in the world, including Microsoft, Dell, and Starbucks and all this is after less than 5 years in business. The proof is in the pudding.
planbdeveloper,
In response to Walter again.
If you look at the top 4 companies in network marketing.
We are number 4 in total sales with only 1 product and we are only 5 yrs old.
The only companies that do more business are …….
Avon Mary Kay, and Amway.
Where are you listed?
Hope this clarifies things for you.
I do not care to bicker with anyone.
Everyone is entitled to their opinion, but NO ONE is entitled to be wrong about the facts.
Have a fantastic day.
Bob
I’m okay with facts, but a couple of these just don’t line up.
For example, I work for a Fortune 500 company . . . people making $10,000/mo are a dime-a-dozen . . . the lowest level of management. I’ll see if I can’t get a count, but it’s over 700. And we’re not even that high on the Fortune list.
Second, Amway, Avon, Mary Kay, and Nu Skin are all over $1 billion in sales. I can’t find anywhere where Xango has released their 2006 sales figures. Can you verify that they are over $1 billion in sales? Otherwise, they are not #4.
I’m not here to bicker . . . just want to make sure claims are backed up. 🙂
Nothing against Xango, either. Not a competitor to me at all. In fact, one of the Xango execs was a college buddy of mine. We still keep in touch.
Walter Reade (from Wisconsin)
Walter,
Avon Mary Kay, Amway etc. are billion dollar compaies yes.
I was talking about U.S. sales only.
Sorry about the slip. We are number 4 in U.S. sales!
Bob
I’m in a binary and I think it’s a great idea. Why do some of you feel that people are not getting what they have worked for….hello people, the bigger leg is usually from OTHER people… this is a bonus, not hard work from themselves. So, in essence, the hard work is what is shown in the lesser leg, the leg that you do all your own, unless those in your downline are working it too.
not sure why everyone is against the binary.