Network Marketing Structure Part 2 Plr Ebook

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The Dreaded Demotion

Demotion is a marketing plan feature (that is usually not transparently stated in most marketing plans) that is very important to consider in evaluating a plan and pacing yourself month after month. Demotion means dropping from one position to a lower position or rank in a network marketing company.

For example, let’s say a Silver Rank Producer works hard to become a Gold Rank Producer. The next month he fails to reach his target and he drops back to a Silver Rank Producer. This normally results in a loss of potential income or even resetting his quota back to square one.

Demotion can also occur in certain plans where people are qualifying or challenging a certain position in a plan where they require distributors to produce large sales volumes in a short period of time. If they fail to reach their target, they do not necessarily drop in rank but they have to build their volume all over again. They may not lose all of their volume but retail some of it as they roll into another month to start qualifying again.

Downline Building Strategies

How can we use demotion to your advantage? It is often said in life that we are not pulled up to success but rather, we are lifted up to success by the people around us. This is even more so in network marketing because there’s no way you can succeed alone. You need the support of your downlines if you wish to beat your quotas and get to the next rank!

You must develop 2 very important factors within your network. TEAM RAPPORT and MARKETING PLAN EDUCATION. If you or your downline is in a qualifying phase, you must strategize with your entire team because volume needs to be created to achieve the target. Teach your downlines that if they support their upline now, they will become a good upline and in future, their downlines will support them as well. With everyone doing a little each day, achieving the target is not difficult.

If you educate your downline enough and they support you enough, they will realize that you as a qualifying upline is in a challenging phase and they will feel that your success is in their hands! They don’t want you to fail and will work hard to help you reach your target (while they earn most of the money because it is THEIR sales. They are merely helping you fulfill your ‘conditions’). Use demotion to build the urgency in your team!

Product Synergy

Demotion is not a worry for the distributor is he has a large customer base. On a personal level, the only real fear demotion poses is when they stop doing maintenance or cancel their auto-ship. This only occurs when the distributor is having financial struggles or is not making money from their business and they decide to stop buying products from the company.

Starting your Own Company

I will not touch so much on whether to design a marketing plan with or without demotions due to the subjective nature of network marketing product. But here is one basic rule to follow: Will demotion affect the distributor too much in a positive way or negative way? Only you know your own product and your distributors.

Push-up: Taking the Short Cut

Push up is a feature in some network marketing plans where a downline achieves a position higher than his upline and all his upline immediately gets ‘promoted’ to the same rank as that downline. Allow me to illustrate:

This diagram shows that as long as the person at the bottom reaches the rank, all his uplines gain the BENEFIT of being in a higher rank (but not the commission from the SALE). Certain push-up systems may differ. This diagram illustrates what is known as Single-Line Push-Up. Other forms of push ups may have other conditions.

Downline Building Strategies

Although push up may offer benefits for the upline, I personally feel that this form actually develops weakness rather than encourage people to look for downlines.

Network marketing is a copycat business where the downline will copy what the upline is doing. If the upline is ‘waiting’ for someone to push him up, the downline who joins will want to do the same and you will have a huge organization of people waiting for each other to produce the volume. Lead by example.

Product Synergy

In relation to the above, ultimately products must move in order to generate commissions. Having a higher rank through push up but no personal sales volume only looks good in the eyes of others (ranking wise) but deep down in your heart you know that you are not making money. If you do benefit from push up, focus rather on creating volume for yourself in that month because it costs less to buy products you can sell later due to the higher commission payout you are getting.

Starting your Own Company

A good plan to develop with a push-up system is one that rewards leadership and development of downline rather than having people wait for each other to create volume. A typical marketing plan today usually pays residual income to distributors who have successfully developed two strong legs rather than one. Don’t design push up systems which reward too much for finding downlines that either buy in to the position (hence letting the upline benefit without doing anything) or letting the downline do all the work while the upline gains without doing anything. Set the rank limit at something reasonable.

Turning Maintenance into Profit

Let’s face it. No one likes forking out money even when they are making millions. What is Maintenance? Maintenance is the sales volume a distributor has to buy from the company (or minimum group sales in some instances), in order to fulfill conditions set out by the company such as:

Prevent demotion

Generating group sales volume

Entitlement for commissions or overriding downlines

Eligibility for bonus pools paid either quarterly, half-yearly or yearly

Minimum order to maintain a high rank (leaders who are earning more are expected to purchase more products)

But the most important factor of all is that network marketing companies need to make money as well.

Regardless of whether the company determines maintenance to be mandatory (therefore they enforce auto-ship in order for the distributor to be in business), optional or have no maintenance at all, the key point to remember for all parties to be successful is that VOLUME must be created.

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