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The forced matrix plan was developed to leverage the positive characteristics of both the binary and unilevel plans. The tree structure is defined by the number of recruits allowed in the front row of each member as well as how many levels deep the compensation plan pays out. A typical example would be a 5 x 5 matrix in which each member can have 5 recruits in their front line and earn 5 levels deep in their network.
The upside of this plan is spillover. If a member recruits six people, the sixth person is placed on their second level. This gives one of their members a recruit that they did not need to personally interact with. A highly active member who recruits 30 people could have 2 full levels and five people in their direct front line with a full level one. Sales volume from the downline members, regardless of whether they were placed or recruited, will result in upline commission. A member could, therefore, do very little and get paid very well. When you listen to people selling this plan you will hear them extolling the virtues of spillover and how fast the network grows. On the surface, this is very attractive and there is no doubt that it appeals to a lot of people. I have witnessed rapid growth, but...
The goal of a compensation plan is to drive sales and identify and promote leadership. In this area, the forced matrix is very weak. For example, Mary recruits 5 people who each do the same. Mary’s sixth person, John, will land up in Mary’s level three. John finds himself under someone he may never have met. With no relationship, it is very difficult for John's upline to help him and John will probably be less than excited with having to ask a stranger for help.
To overcome this problem, most companies run a separate unilevel structure that tracks the direct recruit genealogy. They incentivize their members to train and motivate their recruits, even if they are placed several levels deep in the matrix.
There is another issue - what happens when the matrix is full? The spillover is placed out of the recruiting member's depth and they stop earning on them. So instead of a person recruiting 30 people and having them all on their front line, giving them a guaranteed maximum earning depth from each of their members, they could land up recruiting 30 people and having most of them in level 7.
The next issue when it comes to the forced matrix is network compression. If a member resigns there are 2 options. You can either leave a hole in the network or you can compress the network. Leaving a hole is highly demotivating for the upline as there are always numerous resignations within any network and it looks like the matrix is failing. Compressing the network is even more problematic as no level may have more than 5 frontline members. If a person has a full frontline and resigns, you now need rules to place these members in open slots in the matrix. It is messy!
Although we have clients who have adopted the forced matrix, I am not a fan. It seems to me that most of the rules in this plan are designed to overcome the drawbacks rather than drive behaviour. If you have an annuity product with no team management or sales skill requirements, and you are simply looking for rapid product adoption, then this may be an option. If you are trying to build a well-structured sales force, I would avoid the forced matrix completely.Click the link to check out the amazing NetReady MLM Management Software