Forced Matrix Compensation Plans

 

A forced matrix compensation plan, or matrix compensation plan, operates much like a uni-level plan does, but with one main difference. Each distributor can only sponsor a certain number of frontline distributors. Any additional distributors must be placed further down in their organization – such as their second level – and under another distributor.

Forced matrix compensation plans are typically described by two numbers: the width times the depth. This means a 3 x 8 matrix allows you to sponsor 3 frontline distributors and pays 8 levels deep. Any distributors that you support beyond your first 3 must be placed underneath others in the matrix. A 5 x 7 matrix is 5 broad (front line) and 7 levels deep. On paper, a forced matrix comp plan looks like a "perfect" example of a uni-level compensation plan. Here is what a completely full 3 x 5 matrix looks like:

Advantages of a Forced Matrix

Limiting the number of frontline distributors causes a couple of essential changes. First, there is less emphasis on recruiting a large number of people. Instead, you recruit a specific number and then focus your efforts on helping your downline sponsor more distributors. The matrix comp plan encourages more teamwork than a uni-level comp plan. The narrower and more profound the matrix is, the more this effect is felt. For example, a 3 x 10 matrix puts more emphasis on teamwork than a 6 x 6 matrix does

Second, since some people will sponsor more than the maximum number of distributors, the concept of spillover comes into play. In a 3 x 8 matrix, you can only have 3 distributors on your frontline. The fourth distributor you sponsor will spill over into the matrix and be placed under one of your frontline distributors. Spillover is significant in narrow width plans, such as a 3 x 8 matrix, but much less critical in a comprehensive width plan, such as a 5 x 5 matrix.

Disadvantages of a Forced Matrix

One drawback of the matrix compensation plan is that most programs require you to fill your front line of distributors before building under anyone. If your first 2 recruits are local friends or family members, it would be great if you could place them one under another so everyone can work together to build that leg–making underneath the person at the bottom. However, you can't do that most of the time, although some plans allow sponsor placement. Without sponsor placement, they would be sidelined from each other and would be competing instead of collaborating.

Another disadvantage occurs when distributors drop out. If they haven't sponsored anyone, then you can just start building again at that spot. However, if they have supported other reps, their vacancy now creates a "hole" in the matrix that you can't plug. This is a position for which you can never get paid. But there's a catch. Some matrix plans feature compression, which will pull one (or more) reps up from below to fill the hole. Your matrix is again full – or at least empty at the bottom where new agents can join.

Lastly, like a uni-level compensation plan, the forced matrix limits the depth you are paid. Everybody knows that a significant portion of a mature team will be below the bottom level in your matrix.

To Succeed in a Forced Matrix

Maximizing a forced matrix compensation plan comes down to the details. In theory, the plan looks perfect. Things can get out of whack if the plan is poorly designed. Look for a fully compressed plan so it eliminates the holes when reps drop out. Avoid narrow width plans (such as 3 comprehensive) because they tend to feature too much spillover from the upline, which gives the heavy hitters an advantage over most other reps (the same issue as in a binary compensation plan, discussed next.) Lastly, look for a plan that requires a certain level of the personal building (either volume or sponsoring) from your own efforts (excluding spillover) to avoid attracting the "welfare-minded" distributors who rely on spillover.

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Matrix Compensation Plan Bonuses

To make Matrix Compensation plans more attractive, many companies that employ them have "Infinity" and "Roll-up" Bonuses. While these are valid and real, you need to understand precisely what is required to achieve them. There are many cases that these bonuses are only available or possible for a select few. With countless variations of these types of bonuses, you must take it upon yourself to truly understand what they can mean to you and your income.

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