A sales performance incentive fund, also known as a spiff, is a temporary sales incentive strategy used to motivate sales reps to meet specific, short-term sales goals. Similar to traditional sales contests, spiffs are often financial incentives, but companies can also opt to give away things such as prizes, vacations, or gift cards. However, unlike traditional sales contests, spiffs last for a very limited period of time and reps are rewarded immediately for meeting the goal outlined.
Benefits of a Spiff
Some of benefits to implementing a spiff include:
- Incentivizing Sales Reps: Implementing a spiff can spark immediate motivation among your sales reps to increase their sales efforts. Spiffs encourage friendly competition among reps and provide an immediate reward to the rep who is able to reach the determined goal.
- Achieving Short-Term Sales Goals: A spiff can help support efforts to meet short-term sales goals such as selling off remaining inventory, pushing contract renewals, or supporting a new product or service launch.
- Increasing Brand Presence and Market Reach: A spiff can be a great opportunity to tap into new sales territories. If your company has just expanded into a new region or territory, implementing a spiff that motivates your sales reps to generate new leads in the area will help spread your reach in that area.
Tips For Implementing a Spiff:
Establish a Goal and Define Objectives: When starting a new incentive program, start with a clear goal for your sales reps to achieve. Your goal should complement your reps’ current strategies and tactics. Aligning your goals with the needs of your team ensures that you are setting your team up for success from the beginning.
For example, say you work in car sales and you have four vehicles that have been sitting on your lot for over six months. In order to make room for newer, more desirable inventory, you could establish a spiff that would give a sales associate a $500 bonus if they are able to sell any of those four remaining vehicles.
Communicate Expectations: As outlined in our tips for successful sales contests, it’s important that your sales reps have clear expectations on what is required of them in order to win. Your reps should understand the who, what, when, and how of the program. Anticipate any questions that your staff may have before implementing the program. If you do receive questions from your sales reps regarding expectations, communicate your response to the entire team so that everyone is on the same page.
Determine Participant Eligibility: In some cases, it may make sense to only include a certain group of sales reps in a spiff program. Participation in the program may be determined based on seniority, department, territory, or other variables. If there’s a challenge or obstacle that is only affecting one specific set of sales reps, you will only want to focus on that group to produce the results that you want.
Determine the Incentive: As mentioned above, spiffs can be anything from money, to a vacation, a new TV, or a gift card. To effectively motivate your team, choose an incentive that your employees will want and will work hard to get.
Set a Timeframe: You need to set clear parameters with your team when it comes to how long the incentive program will last and how long they have to meet the goals outlined. You can make the program last as long or as short as you want, just be sure that your timeframe is attainable with the expectations outlined. Remember, a spiff is meant to be a short-term incentive, so in order to produce the best results, don’t make the timeframe too long.
Allocate Budget Accordingly: Before implementing a spiff, make sure that your budget can support the additional cost. If you’re purchasing a specific prize, it’s generally a good idea to purchase it beforehand so that you can immediately reward your reps as they meet your goal. If your program is built around monetary incentives, make sure that you can afford the bonus amount and that you can deliver it by the end of the program.
Measure and Share Success With Your Team: After asking your employees to dedicate extra time and effort to meet your sales objectives, your team will appreciate that you communicate the successes as result of the incentive program. Giving your sales reps complete visibility into how their work impacts the company can be beneficial to keeping your team motivated after the spiff has concluded.
Reach Your Sales Milestones
Spiffs can be a great way to motivate your sales team and temporarily boost sales. However, make sure that you manage your expectations from the beginning. A spiff might not have a long-lasting effect on your sales growth, but it can be just the thing to motivate your team to reach a short-term milestone.
Once you have established the goal for your spiff, Core Commissions’ software can help you create a dashboard to track your reps as they work to meet these objectives. Core’s employee portal also gives your reps complete visibility to their sales with live data. Contact us for more information about how Core Commission can help track your sales and streamline your sales reporting.