Binary marketing used by our company is the most advanced MLM business system of the 21st century"... Phrases like these can often be found in brochures of MLM companies that use a binary marketing plan, or in other words, bi-marketing. I will note right away that the attitude towards this type of marketing plans is quite controversial.

And not only among those who reject MLM as a whole, but also within the networkers' community. Binary marketing is awarded with all sorts of epithets. It's called "dry shoulder", "lame marketing", and even "pure financial pyramid". In reality, binary, like any marketing plan, has its strengths and weaknesses. Oddly enough, while there are already quite a few methodological materials written about the so-called "classic marketing" (both in corporate materials of MLM companies and in literature on network marketing - for example, in the well-known book "Ten Lessons on Napkins"), almost no one writes about matrix marketing plans (be it binary, trinary, etc.) (except for companies actively using these schemes).

Let's try to fill this gap

Let's start getting acquainted with binary from general principles. Unfortunately or fortunately, there is no unified terminology in our industry yet. The same term in different companies can sometimes mean opposite concepts. Therefore, I will use the most common terms without adding any additional meanings to them. For example, multi-level marketing and network marketing in this article mean the same thing.

Any multi-level marketing is a matrix system. If an unlimited number of distributors are placed in the first line, it is a matrix with a number equal to infinity. If there are only three cells in the first line, it is "trinary". And binary implies only two spots in the first line, which can be occupied by only two people, respectively.

This can be graphically represented as follows:

binary marketing plan

Under each distributor, there can only be two distributors. And if we invite a third, fourth, etc. - where will their place be in the network? Anticipating, I will answer right away that the exact answer to this question largely depends on the specifics of a particular MLM company. Therefore, in order for all further reasoning to be clear, let's conditionally introduce certain terms and network construction rules.

1. As we have already mentioned, each participant in the system can only have two structures: right and left. Let's apply the term here - right and left branch.

2. Attracting to the network we will call "sale" (in companies that use binary, usually entering the business is accompanied by the purchase of products, for example, insurance). Although at seminars, I personally prefer to replace the word "sale" with "successful proposal."

3. Each "sale" occupies a free cell. Two distributors cannot occupy one cell.

4. In the case where there are two free cells, the computer will place the "successful proposal" either in the left or right. In each company, the placement rules are different, although there are no fundamental differences. Let's say, in our example, the "left-hand rule" is used. Thus, if both cells are free, filling will start from left to right. Example 1. You invited 3 people. (Peter, Olga, Jan) The arrangement is as follows:

5. Each of your new "sale" is placed in the more "weaker" (less numerous) branch. Therefore, if you invite a fourth person (Zoya), the structure will already look as follows:

This is one of the attractive sides of this marketing. In the advertising materials of companies, this is usually formulated as follows: "The computer itself balances your branches, as if cements them, so that your business is more stable and has harmonious development." These words "please the ear" of a novice, because everyone is pleased when not only the one who invited them to the business takes care of them, but the whole company as a whole. The novice is also explained another "advantage": he will not have to rack his brains about placing his new employees - the "central computer" will take care of them.

6Payments in binary are made depending on the amount of money received from your structure in the company. In some companies, this is expressed directly by adding up payments, in others (especially where all products have the same price) accounting can be based on the number of invites. For simplicity, let's take the second scheme. Let the conditions of the first fee be as follows: "As soon as 7 people are registered under you, you will receive your first reward." For the next 14 - the second, and so on several times until a predetermined amount. For example, the cost of the program that needs to be purchased to participate in the business is $500 (just in case, I remind you that this is not the marketing plan of any specific company, but just an abstract example). For the first 7 people, the payment will be $600. For the next 14 - also $600. For the next 14 - again $600. And once again for 14 people - $600.

So, when your network reaches 49 people, your total fee will be $2400. Moreover, to receive the reward, certain conditions are introduced, for example: you must personally attract at least two people. The other four (to receive the first $600) can be attracted by these two. Well, this is familiar to us from other marketing plans. And here we encounter the second advantage (or, more precisely, the next attractive feature) of binary: those long-awaited four people (and subsequent ones too) can be attracted not by your downlines (those under you), but by your sponsor.

Let's go back to our example:

Jan and Zoya are attracted by you and, quite naturally, they are included in your volume. But Jan is positioned under Peter, and the computer will count this "sale" of yours towards Peter's total volume too. That is, you (Peter's sponsor) have attracted one newcomer to his structure.

Thus, your volumes are composed of:

1). From your personal sales.

2). From the sales of people attracted by you.

3). From a portion of your sponsor's sales (which entered your "legs").

When the sponsor explains this feature of binary marketing to a newcomer, it sounds like a song: "See what a collective business it is. Not only does your sponsor receive rewards from your work, but you also earn fees from the active work of your sponsor. And the more active the sponsor works, the more you earn." But here one must always remember the rule described in point 5. Namely: the sponsor's sales "spill over" only into the weak "leg".

Thus, a paradoxical situation arises: if you want to receive something from the sponsor, you must be a "weak branch" for him. It can be said more simply: "If you start working actively, this privilege is not for you." Without a doubt, during the process of recruiting, this is not told to the newcomer. And that's understandable. Because if the newcomer understands this, he will "freeze" and wait for the sponsor to build his structure with his sales. This is the first spoonful of tar in the sweet barrel of binary.

Let's move on.

7. As we have already noted, to receive a fee, a balance of branches is necessary. The most common is 35% in the weak leg, 65% in the strong one. In the case of receiving the first payments for 7 people, you need to have 3 people in one structure and 4 in another. Even if your structure has 1000 people, but in the weak branch there are only 2 people, you cannot count on any fee until a third participant appears in the weak structure. The balance system in binary is as much of a stimulus as mandatory monthly purchases for a certain amount in other marketing plans. Undoubtedly, this can be considered as another downside. But, on the other hand, there are advantages: the absence of balance is the powerful force that makes you work more actively, personally attracting all new participants to the network.

Another positive aspect of imbalance is that in a situation where one leg is developing strongly (we understand that an active leader has emerged there), your efforts are paid 2-3 times more significantly than with more or less equal legs. This means that with imbalance, all your efforts are directed towards the development of not two structures, but one. In the example with 1000 distributors (2 in the weak and 998 in the strong legs, with the established balance of 35% to 65%), payments will be made according to the following scheme: you attracted one person to the weak leg - you will receive $600. Then you will receive subsequent rewards for every 5 people.

Therefore, from a practical point of view, a strong "imbalance" in legs is good. The sweet story of "easy" earnings in binary sometimes makes such an impression on a novice, exhausted by the struggle for a piece of bread, that he simply does not have time to understand the intricacies of this system. A dialogue like this occurs: - Do I have to pay $500, attract only two people, and I will get $2400? - Yes! But you will get even more if you buy a "family triangle".

Entering the binary system with three cells really sharply increases income with the same amount of work. But in which case should you build a "triangle", in which case a "pair", what "positions in the structure" to buy, and for which category of people to draw structural diagrams?.. By the way, there are very interesting "tactical" techniques for building a structure in binary.

In some companies, there are products of different prices. Let's say a certain company offers three products that cost $100, $240, and $500. And the conditions are the same: to receive fees, you only need to make 2 sales, but for a total of $500. Practice shows that in this example, 90% of sales will be for one hundred dollar products. And for this, you already need to make not 2, but 5 personal sales. Unfortunately, I have formed the opinion that five hundred dollar programs are introduced into the network to justify precisely this well-established rule in the binary market - only two sales.

By the way, these "two sales", especially in combination with the "family triangle", are often a huge obstacle to the development of structures. Remembering "just two sales", some newcomers act like this: besides themselves, they also enroll a couple of their relatives. And as soon as they meet this condition (they made two sales), they quietly wait for their fees. Encouraging them to take active actions can sometimes be very, very difficult. "But you said that only two sales need to be made. I made them. Where are my fees?" And as a result - misunderstanding, resentment, and disappointments. We all understand that if a "magnificent French cognac" is being sold on the market for 15 rubles, it's better not to buy it.

If we are offered a "two-week full vacation at an international resort" for a hundred dollars, where just the flight costs $500, we will consider it wise to decline. And as participants in a truly real public business, we have long known: to succeed in this business, it is necessary to work, and work a lot. To educate and motivate, to help and support those who follow us - regardless of the marketing plan format: quad, turbo, trinary, binary, or "sunshine".

How Binary Started in Russia. 1996.

The meeting place - as always: a Moscow kitchen. The time - as always: past midnight. The atmosphere - as always: clubs of tobacco smoke mixed with the scent of expensive cognac. The purpose of the meeting: to assess the opportunities of a new company with an unusual marketing plan - binary. By two in the morning, no one understood anything, except that all participants were on the threshold of a new venture. Four active and successful networkers, disappointed by the incorrect replacement of their MLM company's product with another, felt that finally the moment had come for them, which in network marketing is called the "golden rain". And it was associated with transitioning to a completely unknown new company. Especially since it used a new reward system that promised that "just make two sales and... a few thousand in your pocket". No one believed in the "freebie" option, but the hard-earned sense of luck, developed over many years of hard work, vibrated and resonated in everyone. "By the way, Lyana, Zinaida called in the evening. Will you take her into your structure?" - the leader of the group, Alena, sounded condescending. "Why would I need her. She can't build structures, but she can complain about her life for days... If Garik wants, let him work with her."

The indisputable advantage of binary

Zinaida was exactly as she was described. Without understanding anything, she immediately paid several hundred dollars. For two hours, she tormented Garik by saying that "she has no money, debts are not repaid, she has nothing to eat, and, in general, she is very ill right now." With experience in network marketing and being an honest guy from birth, after half an hour of conversation, Garik actively tried to dissuade this elderly, sick, and worn-out woman from the reckless step of joining this binary business by investing several hundred dollars. Especially since "she has no money, debts are not repaid, she has nothing to eat, and, in general, she is very ill right now." Zinaida left, but... on the same day, she independently paid not only for herself through the bank but also "made two sales," registering her husband and son. Trouble never comes alone. Garik's troubles continued. His already paid distributor Konstantin, demanded his $400 contribution back a day before the computer shutdown. Garik to Alena, the head of the structure: "Help return the money to Konstantin," Alena to Garik: "Return the money yourself, and register his wife in his place."

Not knowing the algorithm for building binary marketing, Garik submitted documents "alphabetically." After registration, Garik's structure looked approximately like this:

All strong leaders with numerous structures fell "under the wife" of Garik. Zinaida, her family, as well as several "freeloaders" - in the weak. The result of the first fee: Garik - $900. His wife - $1800, a personal letter of congratulations from the company president, a gold badge with diamonds, and the assignment of a manager status. Everyone familiar with binary marketing knows that the balance of power legs can only be "leveled" with additional personal sales. And that's what Garik did. Participation fees in the binary were paid legally through bank transfers. Therefore, Garik's bank operators knew him well, as he appeared in the bank daily, helping his binary "proteges" make transfers. The company also legally credited bonuses to the distributors' personal accounts. Garik's next bonus was $900. And in the place where his wife was registered - $2700.

Handing out the next reward, the bank cashier asked Garik's wife: "We know that your husband works very actively. But why are you paid more?" "If he worked even more actively, he would also receive as much as I do," murmured the lady with the gold badge on her lapel. When Konstantin found out that he could have earned more, he did not refuse this business, he did not regret it. His wife already gnawed at him. This story is true. It once again shows the peculiarity of binary marketing - the one who receives large bonuses is not the one with the larger structure, but the one whose structure has a certain balance. (By the way, for tax authorities, I will report that both Garik and his wife were registered as entrepreneurs and honestly paid the required taxes). But the most amazing thing was yet to come.

After suffering for two months, Zinaida appeared at the company's office with the aim of "selling" her three positions for any price. Since "she has no money, debts are not being repaid, she has nothing to eat, and, in general, she is currently very ill." It should be explained here that some binary companies allow the "reassignment" of distributor positions to other names.

In simpler terms, in binary it is possible to "buy" - "sell" a structural position. Garik placed $1200 in front of Zinaida on the left (the cost of her entry into the business), and on the right - printouts of her earnings for 2 months. Not believing her luck, Zina reached for the money. "Before making a move in life, think!" - Garik firmly said and, covering the money with his hand, pushed the printouts of her earnings towards his distributor, where the figure of $1800 was printed. Zinaida recovered immediately. And the next morning, a magnificent, energetic, and self-confident woman in the prime of her life appeared in the office. I often told this story while conducting seminars in binary companies. Thereby emphasizing one of the advantages of this type of marketing. Namely, the first success, even if seemingly undeservedly obtained due to the sponsor's activity, is uplifting. But according to the law of harmony, everything comes back in full. For "the hand of the giver never empties." And this story confirms that. Zinaida created a numerous and well-trained structure. And now, in Garik's earnings, there was a certain contribution from Zinaida's highly professional work. But in order not to give readers a "honeyed" impression of this article, it's time to add another spoonful of "tar."

Show me someone who has reached the top.

By the laws of the genre, in binary, no one will ever be able to reach the top of their career. I am not referring to the types of network marketing where binary is used as an initial "springboard" start. In simpler terms, when companies use binary at the first stage and then "classic" marketing. Considering many factors, and primarily "imbalance," distributor fatigue, and the conditions for advancement on the binary career ladder, at a certain stage, the leader's development stops. They reach their material peak.

To make it clearer, we need to go back to the first part of the article, where we discussed the conditions for advancement to the first level of the binary. At the second level, payments are made not for the number of people who join the network, but for the quality of employee training. In simpler terms, rewards are paid for "successful employees." These are usually those who have moved to the next level. In this case, the second level. Let's call them managers. So, when a certain number of managers appear in your structure (and again, maintaining a certain balance on both "legs"), only then will you start receiving something. I know many people whose structures have hundreds of distributors, but they do not receive any payments. And only because there are few who have obtained the "manager" status. Therefore, certain techniques for building binary structures emerge, such as the "family triangle," buying leadership positions over the region, or "continuous building under a leader." For now, let's stick to a simple conclusion: in traditional binary, the main money "lies" on the first level.

Discounts by the kilogram.

The most common products of binary marketing are service programs. These include membership in various clubs, short-term insurance programs, etc. In other words, things that require additional contributions over time. These "second" contributions can also be seen as attracting a new participant. In some companies, these subsequent payments are accompanied by the addition of an extra "working" position in the structure. This position can also be "developed," earning rewards according to the marketing conditions. However, in most cases, those who renew their participation for another year already have a whole "bunch" of positions. It's no wonder that in one of the discount companies, there was a common joke: "We buy discounts by the kilogram." So, our fellow citizens acquire discounts by the kilogram, insurance policies in packs, club memberships in bags. And even under these conditions, there is a limit to the rewards for the "main position." A good friend of mine once asked me to help her devise an algorithm for building her structure. Being a leading figure in one of the binary companies, she was the first to reach the third career level (her company had seven career levels). After working actively for two years, she hadn't earned a cent for three months. A simple calculation showed that to receive the next $800 fee, her network (again, maintaining balance) needed to recruit 1326 people. In other words, for each person invited, she had to receive 60 cents. Her expenses for trips to regions amounted to over $1000 per month. Without much thought, she "bought" a few more "discount kilograms" and started building her business anew. But to not end this article on a minor note, I want to highlight another positive feature of binary marketing.Bi-marketing is a great school for beginners in network marketing. The apparent simplicity of the business ("just two sales", "spoon-feeding" from the sponsor, "extension" for another year with the provision of a new "working" place, etc.) attracts quite a few people to it. And after working hard until the first fees, these participants in our industry truly become MLM specialists. And at this stage, some companies offer distributors to smoothly transition from binary to a "neighboring" project, which is built on "classic" marketing with payments already for each personal sale. Those who no longer need to explain the difference between network marketing and the "domino principle", for some reason called a "pyramid" in our country, smoothly transition to the "neighboring" project.

Source: Igor Sidorov

Features of a binary marketing plan