What Does Network Marketing Mean?

Network marketing Examples is also known as network, multilevel, or referral marketing. The idea is that those who have already tried the product or service become one of its leading promoters after having a good experience.

That is why we speak of networks because sales will make between the distributor’s identical acquaintances (friends, neighbors, colleagues) and not between the wholesalers of a department store or retailer who have a much more significant presence, reach, and infrastructure.

9 Examples Of Network Marketing

One level

When it comes to a level, the company hires direct affiliates who will take advantage of discounts and sales commissions. There are no subordinates under them, and they receive compensation directly.

Two-Tier

In the case of two-tier models, a level will create below the first affiliate. Thanks to the recruitment of a team of distributors that they choose. Each group receives different benefits, and a recruiter gets commissions from distributors.

Multilevel – Network Marketing

Multilevel - Network Marketing

In the multilevel scheme, several levels will form downwards. In this way. The first affiliate accesses the benefits of all the people below him and, as the chain descends, the benefits decrease until they reach the base.

This last business model has generated controversies because certain companies that implemented it did not demonstrate to execute it transparently. Their collaborators obtained very different results from what they will initially promise.

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Single Payment

It occurs when compensation is given only for the first purchase make a referral. It will use in high-selling products or services that offer customer service as part of their differentiator; for example. When opening a bank account, you get a welcome gift or the exclusion of an account management fee for a specific time.

Pre-Sale Remuneration

In this model, distributors receive compensation only for approaching an interested person about the product or service before formalizing the sale.

Post-Sale Remuneration

Unlike the previous one, the post-sale one gives the reward until the transaction has concluded. Usually a percentage of the income (previously agreed according to a series of rules) generated by the sale.

Mixed Remuneration

It is also possible to combine the last two, depending on the company and its offer to its customers. The compensation will attract interested people who meet a requirement before the sale (such as sharing their contact details) and then by obtaining the transaction.

One-Sided

Also known as “compensation of a band,” it consists of giving a commission or reward to the person who makes the sale. Since its definition refers only to the side that receives the benefit. It can also be one level, mixed remuneration, or single payment.

Two-Sided

Finally, the existence of a one-sided model implies the two-sided, or «double band compensation. As in the previous case, I Can combine it with one of the other types (one level, mixed remuneration, or single payment). Both parties receive a reward, such as when Uber offers a special discount to a referral and another referred.

Now that you know more about what network marketing is and how it works, you can more confidently choose the strategy that best suits the needs of your company and the goals you want to achieve.

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