Network Marketing Sales Motivation Techniques
Multiple level marketing or MLM or network marketing is a marketing arrangement where the sales force is compensated both for the sales they make directly to customers and for the sales made by other sales people whom they sponsor. Each individual sales person can build a sales organization referred to as a “down line”. A successful sales person will build a hierarchy of multiple levels that forms a pyramid shape. A portion of the sales revenue will paid to each level of the organization. There are a variety of compensation structures among multiple level marketing companies.
The network marketing does not sell its products or services in a retail store. Products are sold directly to customers and are not sold in traditional retail outlets. The are sold without traditional media advertising. Many different types of products are marketed through network marketing. All sorts of everyday products like laundry detergents and household cleaners, cell phone plans, gold coins and just about anything you can think of are sold. There are many different compensation models and organization models. The most common compensation structures are the uni-level, stair step breakaway, matrix, and binary plans.
Multi-level marketing is a legitimate business organization. Many people have built very successful business organization using a network marketing organization. Studies done by experts at leading universities have demonstrated the effectiveness of multi-level marketing techniques. You may encounter some negative attitudes toward network marketing by those who do not understand them and who believe some myths. It is best to simply ignore these attitude. Success is the best antidote to negativity. There is great potential success in starting your own multi-level marketing business.
The simplest structure is the uni-level plan. You can sponsor one group called a “front line.” Every distributor you recruit is part of your front line. There is no limit to size of your front line. Multiple levels of a sales organization are formed as your front line associates recruit their front line and so on down the hierarchy. Normally, commissions are paid to a certain depth, usually between five and seven levels deep.
A structure that emphasizes volume sales is the stair step breakaway compensation plan. Similar in structure to the uni-level plan, you have one front line group. When a member of your group meets certain sales quotas they will break away from your group and form their own group. You will still receive an override commission from the break away organization’s sales.
A forced matrix plan imposes a maximum number of front line associates and sets a limit to how many levels deep will pay commissions to you. Once you have attained the maximum number of associates, new recruits are located in the next available position in the down line. This organization modal stimulates team member cooperation and organization building. The smaller the front line maximum the more attention you will get from your front line.
A binary plan is a forced matrix plan where you are allowed only two front-line associates. If you add more than two associates the excess is placed at levels below your front line. This event is called “spillover” and it is an attractive feature of the binary plan because you need to only sponsor two associates to qualify for the compensation plan. A limitation to the binary plan is that it requires your two down lines to be balanced in the number of sales.
MLM or network marketing affords an opportunity for anyone to start a business with very small capital investment. It has been a path to financial freedom for many people without the advantages of wealth or education. It is an opportunity available to anybody. All that is required is the drive and desire.