Among the various types of marketing plans in the MLM industry, the matrix plan stands out with its unique structure and approach to developing a network of partners. What are its key features?

What is a network marketing matrix plan

Matrix marketing, also known as a forced or limited matrix, is a type of compensation plan in MLM business characterized by clear limitations on the depth and width of the partner structure. Matrices can vary, for example, 3x3, 5x5, 3x7, etc. The first number indicates the number of partners on the first level (the width of the structure), and the second number indicates the number of levels to which the structure can expand (the depth of the matrix).

In an MLM matrix plan, distributors initially fill their first levels, and all subsequent participants they recruit are automatically placed in open spots on deeper levels. For example, in a 3x3 matrix, each participant must personally recruit three partners for the first level, and the rest move below, with a depth limit of three levels. As a result, the matrix will have the following structure: the first generation of the distributor - 3 people, the second - 9, and the third - 27.

This type of compensation MLM plan involves team filling of matrices by all participants. The more people invited into the structure, the higher the likelihood of receiving substantial rewards. This motivates distributors to recruit more newcomers, fostering the growth of your MLM company.

To enhance the productivity of the structure and the business as a whole, matrix marketing plans include several types of rewards:

  1. Matrix bonus - this is awarded when sponsors fill their matrix with downline members. Each distributor receives this reward only when all the cells of the matrix are filled. Additionally, each "cell" in the matrix must be active—performing the necessary minimum action, such as achieving a sales volume. If anyone fails to be active, the commission is not paid. Therefore, every leader in your structure has a genuine incentive to train and assist newcomers.

  2. Sponsorship bonus - this is paid for recruiting newcomers into the MLM company's network structure and motivates your partners to actively recruit.

  3. Matching bonus - this is a "payment from payment" bonus. When a member of the structure receives any commission or other reward, their sponsor receives a percentage of that amount.

  4. Level advancement bonus - one-time reward given to distributors when they advance to higher levels within the structure. This advancement occurs, for example, when a distributor recruits all participants into their first level and completes it.

  5. Matrix closure bonus - this is paid to the leader after fully filling their matrix.

Commission payout percentages at different levels in an MLM matrix plan usually vary—the higher the level, the greater the rewards. Additionally, you can incorporate extra bonuses into the marketing plan to further motivate your partners to actively engage in their work.

 

Types of matrix plans

Depending on the structure, construction principles, and filing requirements, there are several types of MLM matrix marketing plans:

  1. Split Matrix

These matrices fill from the bottom up: a new participant initially joins at the lowest level of the matrix. When all cells are filled, the matrix splits into two new ones, and each participant moves up a level. The leader receives their reward and begins building a new matrix. At each stage of progressing through the matrix, distributors need to build a team and perform specific target actions to maintain the activity of the structure, including motivation and team management, achieving sales targets, and recruiting.

  1. Fixed Matrix

A participant joins at the top of the matrix, which then fills from the top down. Once all the cells are filled, the matrix closes, its participants receive their rewards, and they move on to filling a new matrix. There is only one stage here, which involves building a team and closing the matrix.

In comparison, under identical conditions, a split matrix will develop more slowly, but such a structure is more stable and creates a supportive culture that attracts and retains more partners.

  1. Hard matrix MLM plans

A sponsor must invite a company-approved number of distributors—no more, no less. If the first generation of the matrix is already filled, overflow occurs: the newcomer is placed in the open cells under previously invited participants. No one can start filling a new matrix until the current one is complete. This system helps maintain teamwork, but the strict limitations can put pressure on partners, increase their attrition rates, and slow the expansion of your MLM company’s structure.

  1. Soft matrix MLM plans

These plans offer more flexibility, allowing for an excess of participants. Sponsors can invite more people than needed to fill the matrix, counting on the fact that some of them will meet the required sales volume and necessary cells will be activated. This approach promotes rapid growth of the partner structure, but it is less organized.

The matrix marketing plan is considered the champion for quickly expanding the partner structure of MLM companies, as it encourages active recruitment and teamwork. Despite this significant advantage, MLM matrices also have their pitfalls, including:

  • Reputational risks. Matrix marketing plans are often associated with pyramid schemes, which can create distrust among your target audience and negatively impact the reputation of your MLM company, hindering its development.

  • Lack of longevity. Matrix marketing relies heavily on a continuous influx of new partners who purchase and promote the company's products and recruit newcomers. If recruitment slows down, the structure's growth stagnates, negatively affecting the income of existing partners and demotivating them. This, in turn, leads to distributor attrition and the gradual collapse of the company.

To avoid these pitfalls, MLM companies do not use the matrix bonus plan in its pure form. Typically, its elements are combined into a hybrid MLM plan, or a 2xN matrix is used, resulting in binary marketing. Only under these conditions can the desired success be achieved and a dynamically growing network business be built.

The FlawlessMLM team creates unique marketing plans tailored to the specific characteristics of the target audience, product, and launch region, as well as the goals and wishes of each of our clients, ensuring the successful development of their business in the network marketing market. Contact our experts for consultation, and we will help create the best bonus plan for your MLM company.