Types of direct marketing system

According to the structure of bonus distribution, multi-level direct selling can be roughly divided into the following five types: differential system, matrix system, dual-track system, T90 system and mixed system.

1. Grading system (representing Amway), main year of birth: 1950s-1960s.

Grading system refers to a bonus system with multiple grades, which increases one level according to performance and expands income by grading. The grading system is the longest in the mainstream system in the world, with the largest number of companies. The first level is represented by Avon and Mary Kay, and the multi-level begins with Amway. As the originator of direct selling, Amway's system conforms to the seller's market that American merchants began to develop in the 1950s and 1960s, with relatively few materials. However, the gap between the rich and the poor in society is still very large. Ordinary people hope to make efforts to change their lives through their own hands, so as to get involved in commodity circulation and engage in circulation, form a personal wealth model dominated by companies (sellers) and centered on sales profits, and build their income on expanding consumer groups. This primitive direct selling system was very advanced at that time. Even today, after many adjustments, the system still retains its original characteristics:

This system sets a lot of "steps" for direct sellers as a driving force to encourage direct sellers to upgrade continuously. The more sales, the higher the climb, and the higher the corresponding reward. Its bonuses are mainly divided into two categories: 1 and sales bonuses. It is to obtain sales profits by selling products. This part of the bonus varies according to the sales volume; 2. Leadership bonus. Is to use "algebra" to calculate (each generation of performance refers to group performance rather than individual performance) the bonuses of leaders in organizational management and counseling. So it's also called the Organization Counseling Award. The grading system is a system to encourage product sales. Therefore, higher individual responsibility and group responsibility are set. Under the differential system, if you want to get high income, you must constantly expand sales.

The characteristics of the differential system include:

Allow detachment and return to zero. Resignation means that when the performance of your subordinates reaches a certain level, they can be promoted to the same level as you or surpass you to a higher level. Generally speaking, the personal performance before leaving the company is calculated by merging into the parent group, that is, the bonus is calculated according to the percentage corresponding to the performance of the whole group. Zero means that the performance is not cumulative and returns to zero on a monthly basis;

We can know that the characteristics of the traditional differential system are that it includes: retail gross profit, differential award, leadership bonus, dividend and welfare.

The traditional grading system has played a very positive role in the development of direct selling enterprises:

1, focusing on sales and team management;

2. The organization is stable, and the performance and income are gradually rising synchronously;

3. Middle and high-level income is rich;

Some disadvantages of differential system:

1. High operating cost: including time cost, capital cost, management cost and human resource cost;

2, the early start-up speed is slow;

3. More requirements for the horizontal line (solar line);

4. Team performance requirements (pressure) when receiving leadership bonuses.

5, it is difficult to make money at the primary level, with high turnover rate and higher income at the later stage.

Second, the matrix system (representing Melody), the main year of birth: 1970s-1980s.

Matrix system refers to the bonus system that limits the number of people in the front row, receives bonuses at a fixed depth, and the width and depth must form a matrix. It is characterized by consumers, no "group responsibility" and low personal responsibility. Therefore, if you want to make a lot of money, you must constantly develop the consumer market.

This system was born in the 1980s. The design concept of this system is: 1) stable and loyal consumers; 2) Higher income comes from deeper organizational networks; 3) The stable income comes from the fixed repeated consumption of the organization network; 4) Consumers help each other, and the strong help the weak. Matrix system focuses on the whole organizational structure and emphasizes a completely consumption-oriented organizational network.

The most important thing of direct selling is human reproduction. Under the sun line, it is ideal that a person should be copied into the front row, but the problem of poor management makes direct selling companies begin to seek institutional changes: 1) limit the number of people in the front row, so that direct selling companies can reduce management time and energy to bring good teams; 2) Change the zero-return system to the cumulative system, so that the system can better reflect the humanistic concept of "one point of input, one point of harvest", and even the overall performance will only rise; 3) Companies that are relatively easy to reflect returns are more likely to retain people by increasing the proportion of intergenerational bonuses. These three points can undoubtedly improve the enthusiasm of dealers efficiently, but from the management point of view, the biggest highlight is to limit the number of front rows and concentrate on managing your own front rows. In the case of a limited number of front rows, generally speaking, bonuses will be drawn according to a fixed depth, and a certain width and depth will form a matrix.

In Melaleuca's matrix, when you recommend the sixth person, you can only put it under your five front rows, which means that at least one person in your five front rows can get your direct help, and when you have enough ability, you can help you with more front rows. At this time, not only the superior can help the subordinate in the organizational structure of the team, but also the performance of the superior and the performance of the subordinate overlap in performance, which can actually help the subordinate, and the superior also needs to help the subordinate grow steadily in order to get more returns at the high position. From this perspective, it can be said that it is an improvement of the direct selling company system.

Management problems have caused the system reform, and the second wave of direct selling companies represented by matrix system has a great impact on the first wave of direct selling companies. In the top direct selling company 1996 revenue ranking in the United States, Melaleuca ranked first.

The advantages of matrix system include:

1, easy to develop: when the recommended number of subordinates exceeds the provisions of the matrix system, the excess number will overflow to the subordinates, and the superior can help the subordinates;

2, easy to copy and manage: just tutor a few subordinates;

But we must also face up to the inherent shortcomings of matrix systems:

1, easy to absorb lazy people, almost all the achievements of the company and its subordinates are provided by the bottom, and the upper and middle people are in an inactive state of waiting for money;

2. The profit of excellent dealers is not high, the income of ordinary people is higher, and the time and energy invested by excellent people are not rewarded accordingly;

3. Speculation is high, and profit depends entirely on luck;

Growth is limited, and it is difficult for talents who want to gain more benefits to achieve high-goal benefits. These defects are doomed that the matrix system has not adapted to the development needs of the current direct selling market.

5. Advocating the mode of "equal wealth" makes people feel that it is better to wait than to wait, which is easy to dampen the enthusiasm of active dealers.

Third, the dual-track system (representing USANA) was mainly born in the 1990s.

Dual-track system refers to the bonus system that only two horizontal teams are developed and bonuses are obtained according to relatively few team achievements.

The characteristics of the dual-track system are:

1, it's easier to develop two people, and it's also easy to help get off the assembly line, and there is the idea of "sharing wealth";

2, the pressure is small and the management is simple, so the development speed is fast;

3. Increasing performance as the main source of performance cannot form a real sales network; Lack of management and unstable organization;

4. There is an upper limit on the weekly income, and the doubling speed of 2 is relatively small and slow. Most companies must have a K value when they develop to a certain extent. Therefore, the income of middle and high-level employees is limited, the system is less attractive to middle and high-level business personnel, and the short-term plagiarism mentality is strong.

At present, many dual-track companies have begun to improve the dual-track system, allowing direct sellers to open wide lines other than the second line, or adding other bonus types, including recommendation bonus or retail bonus, in an attempt to make up for some inherent defects of the dual-track system while maintaining its advantages.

The dual-track system is easy to form elephant legs. At this time, although the number of teams is large, it is difficult to meet the requirements of receiving bonuses. It has caused great performance precipitation. Now, in order to solve the elephant leg problem, some double-track companies have set up bonuses such as "global dividends", but they are just playing with concepts. Because from a certain point of view, the main profit source of the dual-track company is the performance precipitation of many operators' elephant legs.

Since the management change caused by the difficulty of "copying" has led to the system change, so that superiors can directly help subordinates with personal connections, is there any way to help offline better maintain and expand the team more efficiently? This needs to consider the survival rate of new team members. It is more important for direct selling companies to keep people than to hire people!

Based on the survival rate, the American Direct Selling Association made a survey and found that the successful recommendation rate of a direct seller was 2.87. The discovery of empirical theory indicates the further reform of the system: one person can only recommend two people to ensure the stability and survival rate of the team! Thus, in 1989, the American market pioneered the world's dual-track system, which triggered the emergence of the most controversial dual-track system in the development of direct selling companies.

The superior manages his own legs, and many of his contacts are vertically arranged below the lower level, which is helpful to the lower level in performance and contacts. Because subordinates can get the greatest help from superiors, the operation difficulty is reduced and the stability of the team is relatively increased. Use the binary tree shape in computer programming to manage the team, form efficient and orderly management, and maximize the performance and interests of superiors and subordinates. In addition, the dual-track company advocates a small amount of automatic consumption every month, decomposes the performance pressure of dealers, forms a real consumption-oriented direct selling model, and realizes the essence of the direct selling industry: "profit from consumption." Therefore, once the system was established, it immediately swept the whole direct selling industry like a breeze, which quickly had a great impact on the markets of the first two waves of direct selling companies.

Because of its low pressure, easy management and strong operability, the most famous dual-track company is USANA. Due to the absolute praise of its products in the industry, the excellent industry reputation of six products of PDR (United States Pharmacopoeia) and the stable and balanced cell reward plan, it became the only dual-track company to become a member of the board of directors of the American Direct Selling Association, and it was a dual-track company. In 2003, USANA's performance in North America in the first nine months has surpassed NuSkin (such as Ruxin), which has a global business of one billion.

The advantages of the dual-track system are:

1, optimized cable design, convenient for distributors to operate; It is easy for superiors to help subordinates.

2. Abandon the grading system of new and old dealers, and get income completely according to the performance of both parties.

3. Early income is relatively fast.

There are also many shortcomings, such as:

1, even the best cable design has the crisis of system explosion;

2. Raising lazy people can't give full play to the potential of direct sellers; Elephant leg phenomenon, can not get the corresponding reward. It is the most distressing thing for a dual-track publisher;

3. The phenomenon of capping can't make capable people get the bigger profits they want in a distribution right, and so on.

4. The team does not pay attention to sales and management, and the organization is unstable.

Four. The main birth year of T90 system: 1990s.

The full English name of T90 is "Trend 90 Uni-Level", which can be called "Trend 90 hierarchy" when translated into Chinese. T90 is actually a variant of differential system, which was founded in 1990s, even later than the two-way system. FORMOR company in America is the representative of this system.

Advantages of 1 and T90

From the bonus system, T90 system has its own characteristics. A representative T90 system is designed as follows: according to the integral, the first generation will raise 15%, the second generation will raise 45%, and the second generation will reserve 60%. Structurally, there is almost no precipitation. No matter how many front rows there are, the company can only get 60% of the first generation and 15% of the second generation, and there are few direct sellers on these two floors, so the precipitation is quite limited. From this point of view, its advantages exceed the high precipitation design of many other systems.

T90 system is actually a reform of differential system. All traditional grading systems allow direct sellers to expand the front row infinitely, but this design is obviously a great waste of network resources. Many types of modern hierarchy, especially T90, fully consider such factors, and only require a few lines of success (even only two lines) to reach the highest level. The high distribution ratio of the second generation ensures the stability of the early performance bonus of direct sellers, so it is a system with both width and depth.

Like all grading systems, T90 pays attention to individual repeated consumption, and its performance bonus comes partly from newcomers and more from individual repeated purchases of network members. From this perspective, it is more in line with the spirit of modern system design.

T90 system is rapid in the initial stage, rich in medium-term income and stable in high-level income.

2. Defects of 2.T90

Of course, T90 also has its own shortcomings. The design concept of T90 system is the idea of wealth sharing, which means that 90% of people engaged in direct selling can succeed, which is actually impossible. Even in the binary network structure chart with radix 2, the number of members without subordinate departments often accounts for more than half of the total number, and in any bonus system, only a few people always make money. In addition, the system also hoped that the direct seller could get nearly 90% bonus in the initial stage, which T90 did. But correspondingly, when the total allocation ratio of two systems is the same, the more allocations in front of one system, the less allocation ratio behind it. The direct sellers of companies adopting T90 system will recover their funds quickly, but it is more difficult to accumulate wealth.

A typical OPP of T90 system will definitely talk about the comparison of yield with other systems within two generations. It takes the first generation of four people and the second generation of 16 people as models. Under the same performance (the same net turnover), Herbalife, which was established in 1980 and adopted the ladder system, earned 100 USD. Melo, founded in 1985, adopted the matrix system and earned 140 USD; Mulida for mixed shifts is $84; If the new one is $100; Two-way Usana is $200, and T90 bonus company is as high as $780.

The reason why the sand table deduction of these companies will produce such an amazing disparity is because of the different sample selection and calculation methods. The so-called "attack one point, not as good as the rest." In fact, this is the success of T90. The interest rate that can really explain the problem and judge the overall superiority of the system should be calculated according to the overall performance, such as how much bonus you can get if the total performance reaches 654.38+00,000.

Verb (abbreviation of verb) mixed system: main year of birth: the beginning of this century.

The hybrid system is the reform and innovation of the above-mentioned system, which takes the differential system as the core, but overcomes three shortcomings of the traditional differential system and combines the advantages of the above-mentioned system. It is a new system and can be considered as a mixed differential system because it is based on differential system.

This system was founded at the beginning of this century, and the representative enterprise is American New Century Company.

As a relatively mature market system, the mixed system has the following characteristics:

1, which has an entrepreneurial bonus and a strong development momentum in the early stage.

2. Difference and algebraic addition coexist. That is, while receiving the difference bonus, you can also receive the algebra bonus;

3. Organizational Development Bonus: Bonus is to help you build a stable and huge organization and cultivate excellent leaders from the organization.

4. Leadership development bonus. It is specially designed to encourage direct sellers to sprint to a higher level. The general dividend ratio is determined by the percentage of global performance;

The hybrid system has the following advantages:

1, focusing on sales and team management;

2. The organization is stable, and the performance and income are gradually rising synchronously;

3. Middle and high-level income is rich;

4, the early start is fast; Vigorously promote it in the medium term; The later period is conducive to management and replication;

5, the width of the line is small, and there is no pressure on team performance.

In the bonus system of Unicity, in addition to the above features, there are two distinctive patents. Unicity applied to the World Direct Selling Association for $80 million.

① Horizontal compression

In Unicity's bonus system, there are always only three offline organizations for all awards and different bonuses. The uniqueness of horizontal compression lies in allowing and encouraging you to establish more than three organizations to get the maximum benefit. Horizontal compression is to add OV (organizational performance) of all offline organizations except two organizations to form a large offline organization, so that you can get a higher bonus.

② Multiple bonus (delivery bonus)

When you become a member of a certain level of Unicity, the company will send you a member as your downline, which makes it possible for you to set up a new organization within your own organization and you can get extra bonuses. In this way, we can increase, extend and develop infinitely.

Hybrid systems also have their disadvantages:

Because it is a combination of various institutional advantages, it is generally more complicated and difficult for newcomers to understand.