I know it can be quite difficult to maintain the motivation and attention of your sales crew. You cannot always rely on commissions and bonuses linked to long-term goals. This is why most sales managers make use of Spiff to bring their teams together around pressing goals.
This is because sales spiff programs offer the ideal reward to motivate actions and accomplish short-term objectives. A well-thought-out spiff can promote positive sales practices, healthy competition, and improved performance.
In this post, I will explain what a sales spiff is, provide best practices for running a profitable spiff, and explain how to set up a program that produces results that matter.
Key Points
- SPIFF stands for Sales Performance Incentive Fund.
- Sales managers typically use spiffs to increase sales of a specific product.
- SPIFF is used to reward employees who have shown outstanding sales performance.
- They can also be used to hold underperforming teams accountable to make their job better.
- Most businesses may not be able to attract top salespeople if they don’t have an incentive plan.
What is Spiff in Sales?
SPIFF (Sales Performance Incentive Fund) refers to a particular incentive that businesses use to boost sales, frequently during a campaign or product push.
Sales SPIFFs are designed to provide a rapid and efficient increase in employee engagement, which in turn leads to better sales results. In the end, your company can benefit from this with a solid return on investment through increased value sales and a dependable means of moving otherwise difficult-to-sell products.
I would like you to know that a SPIFF doesn’t always have to be financial. It counts as long as it’s provided as an instant incentive for achieving a certain objective.
Examples of Sales SPIFF
Here, I will introduce you to the main categories of sales spiffs:
#1. Cash spiffs.
This is a cash incentive that can be directly used by the sales representative. For example, during a week-long promotion, a corporation may decide to pay its sales representative an additional $40 for each premium subscription sold.
#2. Non-cash spiffs.
This form of spiff comes with incentives like gift cards, items, experiences, or other types of acknowledgment. For instance, you could give gift cards or concert tickets to your sales team in exchange for their bringing in a specific high-value customer.
Note that these transient rewards are tactical instruments that have the power to influence team chemistry and sales performance in your sales team.
What are the benefits of Sales Spiffs?
Martha is a sales representative at a big pharmaceutical company. She has been missing her targets, and this trend has become frustrating to her. However, her company is seeing the launch of a new drug on the market, how will they motivate Martha and her team?
Martha’s manager, Jim, considers the Spiff Program to revive her team. This will be effective in ensuring that there is enthusiasm for marketing the product. Through the Spiff program, the sales team will be incentivized to market the new drug thereby achieving the target in two weeks.
The company added rewards like enticing cash bonuses, travel vouchers, new gadgets, and shopping gift cards to the Spiff program. They chose the rewards based on the interests of Martha and other members of the sales team.
Now Martha is inspired to do better. To her, this is an opportunity to show her talents. The rewards have given her the drive to promote the new product with enthusiasm.
After two weeks of hard work and dedication, she has reached her goal. She has successfully sold the drug to the biggest hospitals in the city. The Spiff program has helped the company bring out the best in her and her team.
Proper implementation of sales spiff programs yields numerous advantages for individual salespeople as well as the firm. Here I will take you through some of the benefits of SPIFF to your sales team:
#1. Spiffs provide instant motivation.
Spiffs offer an instant bonus for a job well done, in contrast to conventional incentives based on quarterly or annual success. It motivates your sales team to work more when they have a sales incentive.
Note that your sales force will be more motivated if they can directly associate their efforts with an instant reward. Therefore, the possibility of receiving a bonus can improve employee morale, raise work satisfaction, and reduce attrition rates.
#2. It promotes healthy competition.
Sales spiffs infuse your team’s everyday operations with a lighthearted competition. Reps are encouraged to compete to see who can meet the predetermined targets or metrics earliest by offering well-thought-out contests, bonuses, and awards linked to spiffs.
Furthermore, when you build a very competitive atmosphere, you encourage a dynamic and upbeat sales environment where everyone is motivated to perform to the best of their abilities.
Read More: 5 Steps to Crushing Your Competition with Content Strategy, Professional Counseling: The Competitive Edge Your Business Needs and WHAT IS A COMPETITIVE ADVANTAGE: Definition, Types & Importance
#3. It enhances focus
As a sales manager, you can use Spiffs to concentrate the sales force on particular goods or other tasks that are not as productive. Hence, members of the team that can push those products to the market can get that SPIFF.
#4. Spiffs reward proactiveness:
How can you compensate a sales representative who goes above and beyond in providing exceptional customer service?
Spiffs provide you with the freedom to commend these activities and highlight the good work done by your team. This flexibility pushes sales representatives to experiment with various strategies, which improves the team’s effectiveness as a whole.
10 things to know about the SPIFF program
Challenges with SPIFFs and solutions
Here I will look at some of the challenges of implementing Spiff in your organization, and I will provide solutions to overcome those challenges:
#1. Low-value Spiffs.
When you offer low-value rewards, like gift cards, you will not be able to create enough drive and excitement.
- Solution: Your salesmen should value the incentives you provide. You can use surveys or ask questions during performance reviews to find out what drives them.
#2. It leads to unhealthy competition.
You can create a toxic workspace that hinders productivity when you offer SPIFF to just the highest achievers on the team.
- Solution: Ensure that SPIFFs are set up equitably to give every qualified participant an equal chance to participate. Achievable goals shouldn’t prioritize the skills or networks of some vendors above those of others.
#3. Unrealistic goals
When you set very high or low goals, it will sap your team’s motivation. This is because when it is too high, it might not seem possible. However, when it’s too low, your team may conclude that it isn’t worthwhile.
- Solution: If it makes sense for your team chemistry, you can set a target that everyone can achieve and foster healthy competition. Next, you should establish a reasonable deadline for completion along with distinct, attainable benchmarks.
Read Also: A Simple Breakdown of Objectives vs Goals and How to Set Them
Now that we have found solutions to the challenges of the Spiff program, lets go forward to look at the best ways to implement an effective Spiff program for your sales team.
How to implement a Spiff program
As I earlier stated, creating a compelling SPIFF will boost team output and assist you in hitting sales goals. Now, let’s examine the essential actions you ought to take while putting a SPIFF program into action:
#1. Set a clear goal.
With your SPIFF, what goals do you hope to accomplish? Your incentive strategy should start with a well-defined goal, but you also need to know how to get there. Don’t forget to give a deadline, important milestones, and who can participate. Give your salespeople a specific number of products to sell, set a deadline, and let your staff know about the campaign.
Your team will have easy access to the data if you incorporate your SPIFF objectives into your CRM platform. Teams may evaluate progress towards targets and prospective profits with ease by using dynamic dashboards when you integrate your CRM with sales incentive pay management software.
Read Also: CRM Tools For Small Businesses: Free Tools And Application, CRM MANAGER: What They Do & How to Become One, and How To Select A CRM Solution For Your Small Business
#2. Select alluring prizes.
Rewards are only effective when they benefit your team. Although cash is king, you should also think about providing other high-value incentives, such as travel vouchers and paid time off for vacations. For maximum impact, customize the awards to the tastes of your staff. Therefore, I will advise you to find out what your sales representatives will like to see. You can do this through a survey or questionnaire.
#3. Be aware of your spending.
Offering SPIFFs that are above your budget will negatively influence your budget, so it’s crucial to avoid doing so. Therefore, you should only make use of Spiffs when you want to spur your sales team to accomplish one or more goals in a year.
If you wish to read more about budgeting, read the following articles: WHAT IS A BUDGET? All You Need To Know, BUDGET MANAGEMENT TOOLS: Definition, and Best Budget Management Tools and BUDGET RULES: What You Should Know
#4. Express yourself clearly and often.
You should make sure that everyone in your sales team is aware of the SPIFF’s objectives, guidelines, and deadlines. For instance, a sales representative should know the number of new leads, demos, meetings, and concluded transactions that they need to reach the goal. It will be simple to assess their progress when you follow up with them in this manner.
#5. Follow up on the progress.
Finally, you should examine the effect of completing an SPIFF on your sales results. If it is effective, it can serve as a model for your sales team to achieve future goals. If not, you can try again with some modified settings.
What is the difference between a Spiff and a Bonus?
A spiff is an incentive that motivates your sales representatives to achieve specific goals within a short timeframe. A bonus, on the other hand, refers to the compensation that employees get for their performance or contribution to the company.
Is a Spiff a commission?
No, Spiff is not a commission but a short-term sales incentive that you offer to your sales reps when they reach specific targets or goals.
What is a Spiff payment?
A spiff payment is a cash reward that your sales reps receive when they meet their assigned goals and objectives within a specific time frame.
What is the difference between a SPIFF and a SPIV?
While SPIV is an acronym for sales performance incentives, SPIFF stands for sales performance incentive funds. Both are identical in theory and big companies or businesses encourage their sales by providing incentives to the teams. However, the majority of SPIFFs are for short-term or urgent objectives.
What is the full form of SPIFF?
The full form of SPIFF is Sales Performance Incentive Funds.
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