Using SPIFF to drive sales outcomes

July 21, 2022
Diya Mathur
Diya Mathur
Diya Mathur
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Table Of Contents

It’s 2022, and suddenly the world is all brand new. Hopefully, the worst is behind us and we all are gearing for the accelerated pace of change, so are the organizations that saw the biggest and the most unexpected slump of the decade. With new growth plans and goals in sight, brands across industries are adopting innovative solutions and strategies to make up for the lost sales in the past year.

One of the incentive-based programs that gain a lot of attention during uncertain times is SPIFF. In fact, a lot of companies I consult have enquired about it and if it is the right way to drive sales, rather, amplify the system to meet the unmet goals. So what exactly is SPIFF? How does it work? And when should you implement this for your organization?

Let’s find out…What is Spiff?

SPIFF or SPIF, is a short term sales-incentive program used by organizations with the aim to drive immediate results. "If your sales reps successfully schedule X number of demos in a week or sell products worth $10,000 in a fortnight, they’ll be entitled to special rewards, which is of course, above and beyond their regular incentives.

Most powerful spiff rewards are monetary, but things like concert tickets, short trips, career development training, as well as recognition can also serve as the basis for creating effective Incentive Compensation Plans. Basically, anything that can make your salesperson go "spiffy" works in the favor of the organization. A quick fact: One in five employers started the SPIFF Reward Program in the last 12 months.

Why use SPIFFs?

To Incentivize Engagement Low morale or disengagement can lead to low productivity that can have a negative impact on your bottom line. SPIFF Incentive System works because it leverages human behavior. Organizations that embed incentives into the everyday life of their team members are at least three times more likely to see increased employee engagement.

To Meet Short-term Sales Needs With only 25 days left for the year to end, Sales Manager Patrick announced a special reward to encourage sales reps to meet and exceed their goals. Did it help? Of course, it did! Most sales reps in the team closed 10% to 20% more deals than usual. The best performer who actually won the reward exceeded the sales quota by 40%. That’s the power of immediate reward systems. Need I say more?

To Support a New Product or Service Release New product launches are challenging. 34% of sales reps have confessed that they don’t feel motivated to sell new products, especially when the existing line of products is bringing them decent sales. Here SPIFF can boost momentum for a successful launch.

It can be a Moneymaker for a Reseller SPIFF doesn’t just work in an employee-employer environment, but can also be beneficial for reseller businesses. Similar to shelving fees where manufacturers pay to place their products on retail shelves, resellers can demand manufacturers to pay SPIFF to employees who make maximum sales for their products. This can be a good strategy for you wherein you’d be saving a substantial amount on employee incentives and rewards.

How to set up SPIFF effectively

The key to the success of a reward program lies in the way it’s implemented in the system. Everything that you do in an organization should be well-thought-out and must, under all circumstances, align with organizational goals. Most importantly, don’t announce incentives on a whim.

Understanding the requirement of the organization, its current position in the market, as well as the potential of sales reps in your team, would help you determine the rewards that would keep both parties happy and satisfied, aligning with the concept of on-target earnings. Over-promising and under-promising are the two biggest triggers for failures when it comes to SPIFF, highlighting the importance of setting realistic on-target earnings to ensure fairness and motivation.

Secondly, clearly communicate the objectives and expectations with your team. So if you have a team of 10 reps selling a SaaS platform, a clearly defined goal could be to get at least 500 demos a month cumulatively. Last, but most importantly, choose the right time frame.

Since the objective of a SPIFF Program is to boost sales in a short period of time, an effective strategy would be to determine an appropriate amount of time to attain the strategic aim. This can be based on employee engagement levels and historical performance data — both can be easily captured with a comprehensive sales and incentive tracking system.

SPIFF — Problems and Solutions

Just like everything else in the world, SPIFF Incentive Solution comes with its own share of problems and solutions. No reward system is perfect. At least I haven’t come across any yet. Every time a new incentive program is introduced in the system, a lot of challenges arise, but a good Sales Leader knows how to make them work in the favour of both employees and the organization.

Let’s take a look at a few problems that you may face while implementing this short-term incentive program, and what can you do to overcome them.

SPIFFS can create tension between employees – Of course, everyone wants to have the biggest slice of the pie, but only a few have the potential and the hunger to grab it. This can engender an “all or nothing” mentality, which can create unnecessary stress in the team. So if you see toxic competitiveness taking roots in your team, it’s your duty as a manager to arrange a counselling session and divert their attention towards cumulative productivity.

Too many SPIFFS can eat up your budget – For a small and medium corporation, introducing SPIFFS too frequently can negatively affect the bottom line. Use SPIFFs only when you want to boost sales to a level that strikes a good balance between cost and returns.

They can make reps dishonest – When Sales People get over-enthusiastic about their product and determined to win the SPIFF, it is tempting to bend the truth a little to meet the targets. The simple answer of how to handle dishonest employees is: speak to them, if they don’t mend their ways, get rid of them. This guide will help you identify dishonest employees, and when to let them go.

So should you try SPIFF to boost sales?

As I said, it needs careful planning and implementation for it to be successful. Encouraging employees to deliver above and beyond their usual can be challenging, especially in today’s uncertain times. Most of them could also be facing lingering insecurities and would do anything to stay on top of their manager’s list. So if you think, introducing SPIFF to the team will help you boost employee engagement, as well as sales for the organization, make sure that you plan ahead of time to tackle all potential problems that come along and be prepared to deal with uncertainties.

Before you decide to introduce a SPIFF program, be sure to seek professional advice to ensure successful implementation. If you are not sure about the type of spiff your company needs, you can consult our experts and get a few ideas on how to manage the program from start to finish.


Diya Mathur

Diya is a Product Marketing Associate and content writer specializing in Incentive Compensation Automation. Diya has honed her ability to bridge the gap between intricate software functionalities and accessible, reader-friendly content. Her articles are a testament to her dedication to breaking down intricate SaaS solutions into digestible insights that cater to both tech-savvy professionals and those new to the software landscape.