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The word “spiff” – meaning to make something better or more stylish – was a verb before it morphed into a noun, and then the acronym SPIFF. But they’re all related.
“Let’s spiff you up” and “You look spiffy” evolved into Here’s a spiff to move some product nobody seems to want. Sources as diverse as London’s Pall Mall Gazette in 1890 and Time magazine in 1947 refer to the slang term as an immediate bonus to encourage sales of specific products.
Decades later, business folks made it stand for Sales Performance Incentive Fund, although some say Sales Performance Incentive Funding Formula, to justify the extra F.
They’ve become an important element in helping organizations boost sales or achieve sales targets. Usually, SPIFFs are short-term incentives that motivate individuals or teams to make a final push to reach a goal.
They can also be a key element in interactions outside your company. The right Channel Partner Incentives help them make you their top priority.
Like other sales incentive programs, they’re often dispensed in cash, above a structured commission, but they don’t have to be. Think creatively: merchandise, gift cards, trips, unique experiences, the latest electronic gadget, extra time off, or whatever employees tell you they really want.
Over the years, SPIFF programs have evolved to increase their return on investment and improve sales. But there’s no single way to implement them, and no consensus that they always work, especially if they’re not handled right.
Potential Downsides to Consider Before Jumping Into the SPIFF Pool:
There’s a lot to consider before starting a SPIFF program, and many factors to implementing it wisely and fairly, and managing it well. That’s where Online Rewards comes in. We have two decades of experience designing SPIFF programs for hundreds of companies ranging from Macy’s to Nielsen to Blizzard Entertainment, then refining them to meet each company’s goals and needs.
No SPIFF program is alike, but we base them on a checklist of best practices that we’ve earned and learned. Here are some guidelines for company leaders, as we set up and administer the program together:
The set of your SPIFF program goals plays a vital role in determining how to design your sales incentive program and effectively carry out SPIFF Program management. Most sales directors know that the primary aim of SPIFF programs is to increase share, improve customer service, or build a stronger pipeline.
Sales models of many businesses have rapidly evolved due to changes in policies and how most businesses operate. SPIFF incentive programs should have a set of clearly defined goals that should be achievable and in line with current industrial practices. Before implementing any sales incentive program, examine whether your company needs to modify policies or behaviors to meet the objectives.
It is essential to know your audience and understand their motivation. Sales executives should also find out how best to reward their audience. Aside from that, it is also critical to know the type of reward that will be most beneficial to the group and provide the most motivation. The more you understand the people you want to influence, the better the odds of success for your SPIFF program.
The truth is that money or cash rewards are the kings of all award types, especially for salespeople because they are driven by commission. Most salespeople respond better when they know that a cash bonus is on the horizon. They are also more focused on receiving immediate gratification after closing a deal. Cash rewards take away the complexity that is involved in choosing a reward that will suit everyone.
But that’s far from the only option. It may be challenging to find the right type of merchandise or experience that will meet the diversity of needs of each salesperson as well as the right channel partner incentives. That is why it is vital to know your audience so you can select the most suitable award types.
As a practice, sales directors should find out if they are giving participants enough time to know about the program’s existence and have a proper understanding of the rules. Your audience may feel less involved if your SPIFF incentive programs are too short. The impact of the program may not meet your intended expectations. Similarly, a long SPIFF sales program may also cause entitlement or burnout among participants.
The appropriate duration to run SPIFF sales programs is less than three months max. Heads of sales should also avoid running over two SPIFF incentive programs annually to prevent burnout and entitlement mentality among their audience. It is also advisable to avoid SPIFF programs with annual cycles, and it is not wise to start or end a year with SPIFF incentive programs. Instead, you should have a short build-up time, but that doesn’t mean you should skip promotions.
If you want to launch the best SPIFF program, you should consider setting your budget between 3% to 7% of the total program cost. The amount of money you are allocating for this program depends on the level of importance you place on achieving your sales SPIFF programs’ goals compared to other incentives you have in the mix. Your primary focus should be on optimizing your total incentive budget without neglecting your overall objective.
Step 7: Develop proper guidelines for your SPIFF incentive programs
If you have proper guidelines for your SPIFF sales program, you may have a higher chance of meeting your end goal. When setting your SPIFF program guidelines, you should consider factors such as participant eligibility, reward collection, payment and approval process, and the available support for the program. Picking the right targets for Channel Partner Incentives is key as well.
It is also advisable for sales directors to set the end and start dates for submitting claims and the expected duration of the program. Your SPIFF program management team can prepare these guidelines. Your guidelines should be concise and clear to avoid frustration and confusion, which is the norm in most poorly organized SPIFF programs.
One of the most critical aspects of achieving success in your sales SPIFF program is to measure your success in line with your primary objective. To achieve this, a VP of sales ensures that they carry out the implementation of Key Performance Indicators (KPIs) associated with the program. The most vital KPI to consider is your return on investment. Find out the cost of implementing the program and weigh it with what you achieved after implementing it.
Ensure that you tie this comparison to your budget and goal. Measuring your success should also come while running the program and not just at the conclusion phase. Your KPI should also provide a way for you to measure the level of engagement of your audience and how the SPIFF program influences the way people view your brand. Another KPI to consider is submitting and processing claims, and the time it took for winners to get their rewards.
With these steps and other actions designed with you in mind, our experts at Online Rewards can help you start rolling out your SPIFF program. We’ll factor in elements such as claim processing, auditing, and submission guidelines, as we help you introduce the program to your sales teams, integrate it into your company’s overall plan, and then execute it so you’ll know you’ve made the right choice with Online Rewards.
SPIFFs are just part of our wide range of incentive and loyalty marketing solutions that have made Online Rewards an industry leader for more than 20 years. More than 450 companies use our technology-powered programs to create consistent, valuable, measurable, and meaningful employee interactions, reinforce company values, engage and motivate team members, and inspire the company loyalty essential to today’s business success.
We’ll help you set up the ideal sales incentive program for your workforce, as well as Channel Partner Incentives. Our fulfillment program includes inventory management and warehousing capability, and a system to deliver digital rewards such as store gift cards and prepaid debit cards almost instantly, because nobody likes waiting around for an incentive.
Ready to press the button? Here it is: Contact Online Rewards.
Online Rewards is a full-service software agency delivering versatile, powerful rewards solutions to clients worldwide. Since 2002, we’ve designed, developed, and supported impactful rewards and incentive programs across diverse industries and applications.
