A business model that relies on a network of distributors and agents to market and sell products is known as Networking Marketing. It is also known as Pyramid Marketing or Multi Level Marketing.

A famous business model in the industry, it has been successfully adopted by companies like Amway, Tupperware, and Avon, etc. The process of network marketing is quite simple. It has three main stages or procedures to make money.

  • Generate leads
  • Recruit New Distributors or Agents
  • Build and Manage the Network

Network marketing depends on meeting new people, building relationships, and generating sales. But, there needs to be a proper system or pattern to keep track of the distributors, referrals, and sales. The people involved will get a commission for the sales. They are not paid salaries and are not the employees of the enterprise.

To cater to such businesses, various companies have released MLM or Network marketing software. This software helps enterprises streamline their business model and align the parties involved in a proper hierarchical pattern. Enterprises can maximize their profits with minimum investment. The businesses that follow the network marketing business model rely mostly on word of the mouth advertising and do not spend millions on regular promotions.

The best network marketing software will enable enterprises to manage their business flow smoothly and easily. The various features will help in staying up to date about the leads, statuses, and compensations.

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The software should allow the integration of other software solutions and should be scalable. Any business is bound to grow and expand. Having software that can accommodate the thriving needs of a business is always beneficial to the enterprises. Customization is another aspect that needs to be considered when choosing network marketing software.

Though the standard software that is available suits the needs of the businesses, the enterprises will want to add new features or tweak the existing ones to make user-friendly. Features such as,

  • Providing a payout management system users and admins who are a part of the system,
  • Using virtual money storing systems such as E-Wallet,
  • Allowing the admins to set and update the commissions,
  • Supporting, developing, upgrading, and processing vouchers,
  • Supporting custom MLM compensation plans,
  • Adding new members through referrals or direct registration,
  • Integrating with e-Commerce systems,
  • Being able to use it from any location through a web browser,
  • Integrating with web apps and websites,
  • Supporting other custom requirements such as multilingual systems, and multi-currency systems, etc.

Help enterprises in effectively managing their network. The compensation plans are created based on how the commissions are calculated and divided and how the referral system works. These plans also can be customized according to the business model followed by the enterprise.

 

Let us take a look at some of the compensation plans used by various enterprises.

  • Binary Plan

A simple and popular structure, this plan has two branches (right and left) for every user or agent in the network. The agents are encouraged to recruit two more (though it is not limited) and motive the new recruits to recruit more agents and so on.

 

  • Matrix Plan

Also known as a Forced Matrix plan, this model is structured in the forms of 2*2, 3*5, etc. It is easy to manage as the width and height of the model are already fixed. In a 3*5 matrix, the first level has 3 users, the second has 9, the third has 27, the fourth has 81, and the fifth (final level) has 243 users.

 

  • Australian Binary Plan

Though it is the simplest plan, not many enterprises use this model. The Australian Binary plan is also known as a Tri-Binary system as it is similar to the Binary plan except in one element. Along with the left and right sub-trees, another tree or branch can be added at the extreme ends to include a third user to the same level.

 

  • Board Plan

Also known as a Revolving Matrix plan, this is yet another famous plan used by enterprises. It has either 3, 5, or 9 members. The members work together as a team (board). Once the board has the required number of members, it is split into sub-boards. The board with top affiliate members get rewards and is promoted to the next level. The remaining board will have to be filled up again.

 

  • Generation Plan

This plan is also known as Gap Commission Plan or Repurchase Plan. It is used by the enterprises which deal with consumable products. The levels are developed horizontally more than vertically and allow a user to generate any number of leads.

 

Conclusion

The network marketing software will help enterprises in growing their business with an increased pace. Along with customization, the companies also provide support services to keep the software updated regularly.

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