There are numerous logics and methods to incentivize and compensate the distributors in an MLM Business. However, a few of them have gained popularity due to their widespread appeal. Matrix MLM compensation plan is one among them.
By offering predictability, well-knit cohesive units, and a focused growth strategy, Matrix compensation plan empowers small and young teams to achieve a stable and sustainable growth.
This blog dives into the distinct characteristics, advantages and limitations of the Matrix MLM Plan.
Table of Contents
Understanding the Matrix MLM Compensation Plan
The Matrix MLM Plan Type got its name from the pattern of new placements made in the organization. Its chasm is a grid with fixed width and depth, often represented by width x depth.
For example, a 3 x 3 matrix allows 3 frontline distributors under a sponsor. It allows a depth of 3 which means the number of levels for which the sponsor earns commissions. Some common matrix grids are 2*2, 3*3, 4*4 etc.
The fixed width and depth helps teams have an overall clarity and a well-defined scaffold within which the distributors operate. This helps in setting goals, strategic planning and simplified understanding of the number of distributors required in the downline, milestones to be achieved and potential of the earnings.
Benefits of the Matrix MLM plan
Structured Growth and Predictability:
- The framework of the Matrix MLM Plan has a fixed width and depth, enabling a structured growth pattern unlike the haphazard growth seen in the other plans. It makes it easier to visualize and contain the growth without compromising stability or increasing the risk.
Easy Goal Setting:
- With an established structure, the members are aware of the goals and can prepare a plan to reach there stably and progressively.
Enhanced Team Collaboration:
- Since everyone benefits from the collective effort of the matrix unit, there is enhanced collaboration and team spirit.
Spillover Benefits:
- The surplus recruits from an upline are placed in the next slot in the matrix, offering support to the downline members.
Balanced Growth Opportunities:
- The Matrix MLM Plan Type offers a seamless and consistent earning opportunity across all levels preventing concentration of wealth on the top and reduction of it towards the lower rungs.
Equal Earning Potential:
- This equanimity in the earning opportunity keeps the entire team motivated without risking potential of the team.
Motivation Across All Levels:
- With each level offering potential earnings, the members are incentivized for the growth of their downline which fosters a collaborative and supportive environment.
Manageable Units:
- The fixed width and depth limits the number of direct recruits that a member needs to contribute, requiring them to focus on sales rather than recruitment. This fosters a healthy growth of the brand. A Forced Matrix Plan limits the number of direct recruits and the depth to which commissions are calculated, prompting the members to build a healthy sales strategy.
Structured Placement:
- The complexity of the placement is reduced in a Forced Matrix MLM Plan due to automatic placement of the new recruit on the next available spot.
Stability and Retention:
- The Matrix MLM compensation plan is mostly employed in products that are preferred to be subscribed and renewed frequently. Hence, the stable earnings that come through commissions earned from subscriptions offer a stable income source. Additionally, the structured team fosters collaboration and enhanced team engagement increasing the distributor satisfaction and retention rates.
Consistent Earnings:
- The Matrix plan allows a predictable and consistent earning contributing to loyal team and long-term commitment from the members.
Training and Development:
- Since the structure is intuitive and predefined, the new recruits are easily trained due to effortless understanding. This seamless and easy onboarding practice enables the team to easily understand their role in their team and goals to be achieved.
Scalable Growth:
- Due to spillover and normal growth of the team, the newer members are required to start new matrices allowing consistent growth and earning opportunities.
Cumulative Benefits:
- The income generated from various matrices builds over the time and becomes the long-term earning potential of the members.
Comparison with Other Compensation Plans
Binary vs Matrix MLM Plan
- The Binary MLM Plan and Matrix MLM Plan differs a lot. The Binary MLM Plan progresses in a two-legged pattern with an unlimited number of levels. This comes with a lot of levels, higher earning potential and possibility of rapid growth. However, the commissions are based on the performance of the weaker leg hence balancing both legs in their performance becomes of utmost importance, which demands strategic planning and vision. Hence, a Binary plan is often opted by MLM distributors with good experience in the field.
- Matrix MLM Plan on the other hand offers predictability and restricts the number of levels based on which a member can earn. It reduces the risk associated with the Binary plan, increases stability and boosts the team engagement and collaboration while compromising on the rapid growth or higher earning potential held by the Binary plan.
Unilevel vs Matrix MLM Plan
- Unilevel plan is one of the most basic MLM compensation plans. It allows a distributor to employ an unlimited number of frontline distributors. Hence, the member earns from their own commissions and the commission of the entire downline. This offers a flexible placement of new recruits without any limitation in width and depth. However, managing such huge structures is challenging which may render the successive downlines dormant or without required support and training.
- Matrix MLM Plan enables the ease of managing a fixed member team without having to worry about a haphazard growth. Though this also limits the earning potential, each distributor has enhanced control over their team and can set a calculated plan of growth.
Conclusion
A Matrix MLM compensation plan brings stability, sustainability, predictability and a well-knit team to the table. This helps an organization in their early days due to increased control over the team and limited risk.
By employing advanced analytics, ease of streamlining the business operations and live updates of the sales activities, a good MLM Software such as the Integrated MLM software can help an MLM venture navigate any challenge that comes their way in the application of Matrix MLM Plan.
Book your free demo today to experience the ease of applying a Matrix MLM Compensation Plan to your unique network marketing venture. Hence, the clarity and scalability of an MLM Matrix Plan makes it a popular choice among the enthusiasts of long-term sustainable success.
Frequently Asked Questions
How does spillover work in a Matrix MLM plan?
Spillover is the process where the distributors benefit from the efforts of their sponsor or upline member. Let’s say upline member X has an extra recruit. Due to the nature of a Forced Matrix Plan, the new recruit is placed in the next available slot which may be under X’s immediate downline member, Y.
Here, Y benefits from the recruitment incentives through the efforts of X, though X is also eventually benefitted from the performance of X’s downline. To ensure that the earning potential is maximized, it is important to fill the placements strategically and proactively.
Can I earn from multiple matrices simultaneously?
Once a matrix structure is completed, the members can start a new matrix and empower it to become an alternative source of income. This increases the stability in the earning potential of members which builds their commitment and motivation.
What are the typical matrix dimensions in an MLM plan?
The typical matrix dimensions are
- 2×2 which requires a total of 6 positions to be filled.
- 3×3 which requires a total of 39 positions to be filled
- 2×5 which requires a total of 62 positions to be filled
- 4×4 which requires a total of 340 positions to be filled
How do I maximize earnings in a Matrix MLM Plan?
By filling all the positions strategically and efficiently along with supporting, training and building an environment of cohesion, a member can maximize their earnings.
This would boost not only sales activities and earnings but also recruitment prospects and generation of new matrices for enhanced sustainability in the income potential.
