An MLM business is governed by the compensation plan it follows. Interestingly, the compensation plan has a huge say in the overall growth of the MLM business. Now, compensation plans are of many types, some are straightforward like Unilevel while others are complex like Forced Matrix or Breakaway plan. In this post, we will discuss the MLM breakaway plan.
We will understand its basic workings, the potential benefits and risks involved, and the strategies that could help you be successful with a breakaway plan. Therefore, if you are interested in the Breakaway Plan in MLM, this post will provide complete information. Let’s dive in then!
What is the Breakaway Plan?
As the name indicates a breakaway MLM plan is where a distributor breaks away along its team when it reaches a certain criteria, let’s say a rank or set number of downline members. Now, the breakaway doesn’t push the team out of the network. It just detaches from the admin and places under the admin a separate group.
This group acts as a separate downline under the main recruiter or admin and continues to earn commissions. The breakaway compensation plan appears a bit complex and indeed it is considered an advanced plan. However, it offers ample opportunities for distributors to be a leader and create more growth opportunities for themselves as well as for the downline members.
Breakaway Plan Key Components
Similar to other compensation plans, breakaway plans also include some key components. It regulates the network structure, compensation, rank advancement, and when the breakaway will happen.
In any case here are the key components of the breakaway MLM plan;
- Ranks or Levels – One primary component of the breakaway plan is ranks or levels. Distributors can achieve ranks after completing certain requirements like sales, recruitment, etc.
- Group Structure – Distributors within the MLM organization are arranged in a group structure or teams. Each distribution has its own downline including people they have personally recruited.
- Breakaway Point – The breakaway point is the most critical component of the breakaway MLM plan. It represents the point or certain criteria when distributors can break away from their upline and become independent leaders. However, this requires competing specific requirements like attaining certain ranks, recruiting a certain number of people, or maintaining a minimum sales number.
What are Stair Step Breakaways?
The term stair step breakaway comes from the fact that the plan represents steps like hierarchy. Remember, that members have to work for rank advancement.
For example, let’s say there are 5 levels of ranks.
When distributors add 15 members it will move up in rank. Again when the distributor adds 25 members, it will further advance in rank, achieve higher status in the network, and receive higher commission. This will go on till level 5 where the breakaway will happen and the distributor will be detached from the upline. The growth of the distributor takes a step-by-step progression till the breakaway points. That’s why the name stair step breakaway plan.
Benefits of the Breakaway Plan
Although complex, the MLM breakaway plan brings to the table several advantages. Let’s check them out;
There are redefined ranks in the breakaway plan. There are unique perks and benefits associated with each rank. As members climb up the rank they receive more commission, additional incentives, and bonuses.
One of the primary benefits of the Breakaway plan is that it promotes leadership development. The goal here is to build a successful team and climb up in the rank. Members hone their mentorship skills and provide support to the team which ultimately leads to leadership development.
Motivation to the Team
Distributors and team members know they can break away and become a leading group themselves. This motivates team members to work harder and increase sales. It leads to better productivity and accelerated growth within the MLM organization.
As each distributor seeks to jump ranks, build a solid team, and break away, it leads to faster network growth.
High Scalability for the MLM Company
The breakaway plan facilitates seamless scalability within the MLM company. Distributors break away and begin working as individual groups, which enables MLM companies to expand their reach and accelerate their sales efforts. Furthermore, businesses don’t have to rely on a few members for sales efforts.
Potential Drawbacks of the Breakaway Plan
Breakaway plans offer several benefits but it’s not devoid of drawbacks. For MLM businesses and distributors it is vital to understand the potential downside of breakaway plans too;
Too much competition
In the breakaway MLM plan, distributors face intense competition. It’s because the plan involves ranks and members have to compete to reach higher ranks and better commissions. It could strain the distributors too much and may discourage them from putting in the effort.
The MLM breakaway plan is complex no doubt. Distributors have to constantly monitor their performance as well as their team. Furthermore, they also have to track rank advancement, changes in payouts, etc. which add up to the complexity further.
High Recruitment Pressure
For rank advancement and breakaway, distributors have to recruit certain numbers of people. This emphasis on new members could divert the focus on recruitment only, rather than product selling and customer satisfaction. The recruitment pressure could severely impact the growth prospects of the MLM business.
The stair-step breakaway plan is a perfect way to regulate growth and keep the MLM team motivated. Furthermore, it provides excellent opportunities for distributors to push through the ranks, rise within the organization, and earn higher compensation. On top of that, the possibility is always present to break away from the upline and be a leader with a fledgling downline.