Understanding the Forced Matrix Plan
Matrix PlanThe Matrix Plan, also known as a Forced Matrix Plan, is based around a compensation structure that has a set width and depth for which distributors are compensated. Although there are many variations to this compensation plan, the basic concept remains the same.
The basic structure of this compensation plan is normally identified by a simple equation that distinguishes the width and depth of the plan (i.e. width x depth). For example a 3 x 5 plan suggests you can only sponsor a maximum of 3 frontline distributors and you have the potential to earn commissions up to 5 levels deep.
Because there is a limited width to this compensation structure, distributors are encouraged to assist their downline members to help their organisation grow. Additionally any new recruits that are sponsored after your frontline is full must be positioned under one of your existing downline distributors. This process is commonly referred to as spill over which is also used in the Binary Plan. The main advantage of this concept is that it creates an element of team work where some distributors within your organisation can work together and mutually benefit.
The Forced Matrix structure allows distributors to sponsor new recruits deeper into their downline once their frontline is full. Traditionally these new distributors were automatically placed into the next available position, however more recently, plans have been developed to allow distributors to decide where they want to position these new distributors. This recent modification has made this structure more appealing, as it gives distributors more control over their business and it increases the amount of teamwork.
One of the main advantages of the Matrix Plan over the Unilevel Plan and the Stair Step Breakaway Plan is once your frontline is full, your focus now changes towards developing your frontline distributors and assisting them to find and train their frontline distributors and so on.
A potential setback of the Matrix Plan is that generally the amount of commissions paid on each level is variable. Therefore there is more incentive for distributors to assist some levels of their downline but not others. Additionally, some plans are quite wide and may require you to fill 6 or more frontline positions before assisting your frontline to develop their organisation. Another drawback to the variable commission rate is while it does offer some incentives it can be hard to explain to potential prospects. You could have the best company in the world but if the compensation plan is too hard to explain or understand it can make it very difficult to convert potential prospects.
A study conducted in the network marketing industry in the late 80's discovered the average network marketer sponsors less than 3 distributors. This makes it very difficult for the average distributor to fill their frontline, especially some of the wider matrix plans. Since this study, compensation plans have been developed to help even the average networker to be successful. Such improved plans include the Binary Plan, which only requires you to sponsor 2 frontline distributors making it achievable for even the average network marketer.
When reviewing compensation plans, in particular the different Forced Matrix structures, you should be aware that the narrower and deeper the plan, the more supportive your upline distributors will be. For example a 2 x 12 plan encourages more teamwork and support from upline distributors than a 6 x 4 plan. Having said this, the variable commission rate should also be considered as some wider plans have an incentive for distributors to focus their efforts towards assisting different levels of distributors.
To make Forced Matrix Plans more attractive, some companies have added infinity bonuses and rollup compressions allowing hard working distributors to earn commissions on levels specified outside the depth of the plan. Because every compensation plan is different we wont go into these details as they are not necessarily applicable to all Forced Matrix Plans. It should however be considered that whilst a number of these bonuses are very attractive, only a small percentage of distributors will be successful enough to earn them.
In summary the matrix compensation plans have the potential to be very rewarding to both new comers and gun recruiters particularly once you get to understand the compensation structure in its entirety. Like most compensation structures this model does offer the potential to earn a very high income if you are willing to put in the work. However as discussed elsewhere in this chapter we strongly encourage that you dont join a network marketing company based purely the compensation plan. In particular the products, the practicality of the business model and whether the company has a proven track record should also be considered.
Learn more about the Stair-Step Breakaway pay plan.
Learn more about the Binary Pay Plan.
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