GRRRRR!!! One of the most frustrating things when you begin network marketing is learning the lingo (ie. terminology, definitions, language). I can remember going to pretty much every time I came to an online business site, advertising site, etc. (OK, so I still do from time to time…lol!!). So, without further ado, I’ve included below a list of the most common used terms in network marketing that you NEED to know!!
Begin building the brain cells… & enjoy!!
Achievement Level: A rank or title that is achieved by moving a certain amount of product per month & / or recruiting a certain number of distributors who themselves have attained a certain designated achievement level.
Affiliate Program: An Internet business, such as Richdad.com, that allows people to become affiliates simply by providing a link on their Web sites to a corporate home page, & pays affiliates a commission percentage on all sales made through that link.
Autoresponder: A Web site or a service Aweber that e-mails information automatically to anyone who clicks on the responder.
Binary: A type of compensation plan that limits your frontline to two people & pays out weekly on one of the two legs of your organization.
Branding: A name, logo and all other visual information connected with your product or service.
Breakage: Sales volume generated by you or your downline for which you receive no compensation.
Breakaway: An abbreviation for “stairstep / breakaway,” one of the four major types of compensation plan. It can also refer to a distributor in your downline who has met certain minimum monthly qualifications & has consequently “broken away” from your group.
Breakaway Leg: The organization or downline of a breakaway distributor.
Bonus Pool: A special fund set aside by a network marketing / mlm company, from its profits, & distributed as a special incentive to qualified sales leaders.
Bonus Volume: See BV.
Business Builder: A distributor who is actively prospecting & gathering customers, as opposed to one who is simply buying product at wholesale for personal use.
Buy-Back Policy: The money-back guarantee offered by all reputable MLM companies to distributors. Generally, companies will pay 70 – 100% of the wholesale price on any product that a distributor purchases, but then decides to return, for whatever reason.
BV (Bonus Volume): An alternate expression for point volume (PV) or business volume (BV). It is a value used by MLM / Network Marketing companies to calculate overrides & commissions, based upon the wholesale price of the items for which overrides & commissions are being paid.
Circle of Influence: The people who are closest to you & who constitute your warm market. Also, those who might be easily influenced by you because of your reputation in a particular profession or community. (Related to Warm Market above)
Cold Market: Prospects outside your circle of friends, family, and associates.
Commission: The percentage you earn from the sales volume of your organization.
Commissionable Volume (CV): An alternate term for bonus volume.
Compressed Plan: A pay plan that stacks or “compresses” the bulk of its commissions on the front end.
Compression: When a distributor quits or is terminated, his downline moves up one level, thus filling the empty space he left, and “compressing” the company’s downline by one level.
Conversion Rate: A desired action taken by the recipient of your email. This can be as simple as clicking on a link, downloading something from your website or making a purchase.
Confirmed Opt-In: Also known as a “Verified Opt-In”. Basically, The recipient has verifiably confirmed permission for their email address to be included on a specific mailing list, by confirming (responding to) the list subscription request verification (confirmation email). This is the standard practice for all internet mailing lists, it ensures users are properly subscribed from a working address & with the address owner’s consent.
Cost Per Acquisition (CPA): The amount paid to have someone take a particular action. Example: I paid $100 for an advertising campaign which drew 2 new customers who purchase my product. My CPA was $50.
Cost Per Click (CPC): Related to “Pay Per Click (PPC)”. The amount paid to have someone click on your link to visit your website or a particular landing page.
Depth: The number of levels in your MLM / Network Marketing organization.
Direct Selling: A form of selling whereby independent MLM / Network Marketing representatives, working on commission, sell face-to-face outside of an established retail location.
Distributor: A person who contracts independently to sell products or services for an MLM / Network Marketing company.
Downline: All the people recruited as distributors into a network marketing / MLM company constitute that company’s downline. Your downline consists of everyone whom you recruit, who is recruited by your recruits, and so on.
Drop-Shipping: The practice of shipping product directly to customers from the company warehouse, rather than through an independent distributor.
Duplicability: The extent to which an MLM / Network Marketing opportunity can be easily mastered by new recruits.
Duplication: The process of replicating business builders in your downline.
Group Volume: The total volume of wholesale purchases made by your personal group in a given month.
Heavy Hitter: A top sales leader in an MLM company.
Home Meeting: An opportunity meeting held in a distributor’s home.
Hotel Meeting: An opportunity meeting held in a rented hotel conference room.
Hyperlink: A website address placed into a message that is clickable by the recipient. Example: you come upon a website that has a highlighted, underlined message/ phrase that’s clickable in the middle of a paragraph or it’s just a stand-alone phrase; this is referred to as a “hyperlink”.
Infinite Bonus: A feature that theoretically creates infinite depth in a pay plan.
Infinite Depth: A feature of some compensation plans allowing distributors to draw earnings from deeper levels, below their ordinary pay range.
Inner Circle: The coveted “know it all” group of marketers & gurus that claim to make 6 figures or more a year (based on the opportunity & its reputation, this IS possible).
Leader: A top achiever in an MLM / Network Marketing downline.
Leg: Besides one of the 2 body parts that help move you from one spot to another (:-p) A downline within your downline, usually headed by one of your frontline “Leaders” distributors.
Level: The vertical position of a distributor in your organization. If you recruit someone, he is enrolled on your first level. His recruits will be on your second level, & the recruits of his recruits on your third level.
Lukewarm Market: Prospects who are neither in your warm market nor your cold market, but somewhere in between. Can refer to people whom you have spoken to once or twice or people referred to you by others in your warm market.
Marketing Plan: An alternate term for compensation plan or pay plan.
Massive Action: A sustained, one time barrage of prospecting activity.
Matrix: A comp plan that limits the number of people on your frontline, usually to two or three. Be careful of these, because many can be scams or a waste of time that get you & your business NOWHERE!!
Max Out: A comp plan is said to be maxed out when you have put enough people in place, moving a sufficiently high level of monthly volume, to qualify you for the maximum level of commissions available in the plan.
MLM/ Multilevel Marketing: Generally, an alternate term for network marketing. It can also be used to distinguish those particular network marketing plans that permit distributors to draw income from more than one level.
Momentum: The phase of a network marketing company’s growth when sales & recruiting begin to grow at an exponential rate.
Monthly Volume Requirements (MVR): An alternate term for qualifications.
Multi-Affiliate Program: An affiliate program that allows affiliates to recruit other affiliates & to be paid multilevel commissions on sales of their recruits.
Network Marketing: Any form of selling that allows independent distributors to recruit other independent distributors & to draw a commission from the sales of those recruits.
Opportunity: The chance to join a mlm / network marketing distributorship, or another term for the distributorship itself.
Opportunity Meeting: A recruiting rally or business briefing held by MLM distributors for the purpose of presenting the opportunity to prospects.
Organization: That portion of your downline from which you are allowed to draw overrides & commissions. It includes all distributors placed on levels that fall within your pay range.
Organizational Volume: Monthly sales volume generated by your organization, through product purchases from the company.
Overrides: The monthly commission you receive from your breakaway legs.
Payout: The percentage of a company’s total revenue that it pays out to distributors, in the form of overrides, commissions, and bonuses.
Pay Plan: An alternate term for compensation plan.
Pay Range: All levels of your downline from which your comp plan allows you to draw overrides & commissions.
Personal Group/ Downline: All distributors in your pay range, whom you have personally sponsored, but who have not broken away.
Pre-Launch: The period just before an MLM / Network Marketing company’s official launch.
Prospect: A potential customer or recruit.
Prospecting: The process of seeking customers or recruits for your Network Marketing / MLM business.
Personal Sales Volume (PSV): The volume of product that you personally sell in a given month.
Personal Volume: The volume of product that you buy at wholesale from the company in a given month.
Point Volume: An alternate term for bonus volume.
Qualifications: Monthly quotas that distributors are required to meet, in order to qualify for a given achievement level. Quotas are usually set in terms of group & personal volume. Occasionally, there are recruiting quotas, requiring that you bring a certain number of people onto your frontline each month.
Recruit: A prospect who has agreed to join your downline as a distributor.
Renewal Fee: A yearly membership fee paid to an Network Marketing / MLM company, in order to maintain your status as a distributor.
Retail Profit: The spread between the wholesale price you pay for product, & the retail price at which you sell it to your customers.
Roll-Up: A feature in some plans stipulating that if you fail to qualify for commissions in a given month, because you did not meet your quota, you are declared inactive, & will receive no commissions from your downline that month.
Saturation: The theoretical point at which a network marketing / mlm company runs out of potential customers & recruits, & stops growing.
Sifting & Sorting: The practice of quickly identifying the most promising prospects & focusing your recruiting efforts on them, while ignoring the rest.
Sponsor: A distributor in an Network Marketing / MLM company who recruits & trains another distributor.
Stairstep: An alternate term for an achievement level, or for a stairstep / breakaway compensation plan.
Stairstep / Breakaway: A type of compensation plan that requires distributors to meet monthly volume quotas, in order to qualify for an ascending series of achievement levels, or “stairsteps.” When a distributor reaches a certain level, he “breaks away” from his sponsor’s group.
Stockpiling: The practice of buying & hoarding more product than you can possibly sell, usually in an attempt to meet excessive monthly quotas, to qualify for commissions. Logically NOT a smart thing to do.
Teleconference: A recruiting rally or business briefing that is broadcast by telephone. Prospects are told to phone in at a certain time to hear the event.
Three-Way Calls: A prospecting technique that allows distributors to build a downline while training recruits. When a raw recruit wants to interview a new prospect over the phone, he/she will 3-way his sponsor into the call. The sponsor gives the presentation while the recruit listens & learns.
Two-Level Plan: Another name for the compressed plan, derived from the fact that many compressed plans stack the bulk of their commissions on the first two levels.
Unilevel: A type of compensation plan in which you must qualify for achievement levels, but in which people in your downline cannot break away.
Upline: All of the people above you in a network marketing / mlm organization. Also, an alternate term for sponsor.
Warm List: A list of personal contacts drawn up by new recruits that constitutes their warm market.
Warm Market: All potential prospects for your business whom you personally know, either because they are family members, friends, or business associates. These are the BEST prospects to market a new product, service, or opportunity to that can GUARANTEE you sales because they trust your knowledge & experience!!
Web Form: A form located on a web page making it possible for someone to fill it out and begin the opt-in subscription process.
Width: The number of people in a distributor’s frontline, or the number of people allowed in a distributor’s frontline by the rules of the compensation plan.
