Winning Sales Spiff Strategies Drive Performance

Sales spiffs are simply a type of sales incentive to motivate sales reps and teams to hit specific targets. Spiff programs have been used by companies over the years to promote sales and engage sales representatives. The term spiff is an abbreviation for several expressions:

• Specifically promoted items for fast selling
• Sales performance incentive fund
• Sales promotion incentive fund
• Special pay incentive for fast sales

Ultimately, a sales spiff is designed to increase employee engagement, drive sales, and encourage reps to close more deals. Common types of sales spiffs rewards include cash bonuses, gift cards or vouchers, travel incentives, commissions or higher commission rates, product incentives, and recognition and awards.

What makes a spiff different from a regular incentive program? While both share a common goal of motivating and rewarding sales reps, there are a few key distinctions.

Spiff programs typically use a shorter timeframe, intended to create a sense of urgency whereas regular incentive programs usually span over longer periods of time. A spiff program focuses on particular sales goals or products with short-term objectives.

The effectiveness of sales performance incentives can be attributed to several psychological factors influencing motivation. Because spiff programs create a sense of urgency and excitement, sales reps are encouraged to achieve immediate goals, resulting in higher concentration and effort.

Spiff incentives tap into extrinsic motivation by offering tangible rewards and instant gratification. A spiff fosters both competition and camaraderie among sales teams. The opportunity for reward can spark healthy competition and increased teamwork.

Choose the right sales spiffs

Not all sales spiffs are created equally. Consider your company's unique needs when determining which sales spiff program to implement. Choosing the right spiff program is important for motivating salespeople and achieving company goals.

Aligning spiffs with sales goals

First, any type of incentive program needs to align with your overall sales goals. Your sales team has specific targets and milestones they need to hit over the course of each sales quarter and year. Introducing sales performance incentive funds should align with your main goals and objectives to keep the company on track.

Start by identifying key performance indicators (KPIs). Setting clear and relevant KPIs keeps sales teams focused and motivated. These KPIs need to be measurable and directly tied to the desired outcomes of the incentive program.

Consider your spiff goals: what do you want to achieve with this incentive?

Consider different metrics such as number of units sold, revenue generated, new customer acquisition, or customer retention rates. Each metric you choose should be measurable and attainable.

Tailoring spiffs to your sales team

After defining your main goals and KPIs, consider how you can tailor spiffs to your sales teams. Each sales rep is unique, so the key to developing an effective spiff is to understand your employees' preferences and strengths, along with areas for improvement you wish to target. Here are a few tips for tailoring spiffs to your sales team:

• Understand your sales team: Develop a firm understanding of your sales team's dynamics and performance.
• Consider team structure: Based on sales team groups or territories, tailor your spiffs to meet different goals and challenges.
• Involve the sales team: Engage sales representatives in the spiff planning process by seeking input on what motivates them and which goals will drive top performance.
• Diversify rewards: Offer a variety of rewards to cater to team members' diverse preferences. This ensures all members of the sales team stay engaged and actively participate in the spiff.
• Focus on team building: Encourage teamwork and collaboration to improve team morale and strengthen your overall sales efforts.
• Address skill development: Spiff programs should not only incentivize hitting sales targets, they are also an opportunity to motivate employees to develop new skills.

Executing effective spiffs requires strategic planning. Keep spiffs simple, clear, and timely while balancing your short-term and long-term goals.

Simplicity and clarity

Seek simplicity and clarity in the development of spiff incentives. Avoid complex rules and conditions. Making spiffs overly complicated could potentially discourage team members from actively participating. Create a simple set of rules that clearly outline the steps toward receiving a spiff reward.

Spiffs should be clearly communicated to the sales team to ensure everyone is aware of the program and how they can participate. Hold a sales meeting with the spiff program on the agenda to spark interest in the program.

Timeliness and urgency

Set appropriate timeframes for spiffs. The main differentiation between spiffs and regular incentive programs is the timeliness and urgency associated with spiffs. One objective for implementing spiffs is pushing products or services fast. Set the time frame for a specific period once the program starts.

Creating a sense of urgency will drive performance. One way to do this is by offering an immediate bonus or reward. Unlike other incentive programs which require time to acquire various rewards or recognition, spiffs are designed to provide instant recognition and help close deals fast.

Balancing short-term and long-term goals

Align your spiff strategy with both short-term and long-term goals to provide a sense of purpose for the movement. While spiffs are generally designed to encourage immediate results in the short term, they can also fit into overarching, long-term objectives to promote sustained performance.

Short-term goals are required to increase immediate performance and achieve quick wins. A spiff can be implemented to increase sales or move excess inventory within short periods of time. However, long-term goals lead to lasting success and growth. Planning spiffs within the context of your long-term goals ensures your company is working towards growth and better performance over time.

Sales spiffs are a great opportunity for motivating and encouraging employees but it's also important to track performance to determine effectiveness and guide future spiff planning. There are several tools and techniques for measuring spiff performance that can help you refine your initiatives in the future to achieve even higher success.

Implementing a tracking system

Developing a tracking system for sales performance is essential for measuring employee engagement and sales results. Make measuring spiff performance easier than ever by utilizing sales performance software and tracking tools.

Tracking software, such as a CRM system, sales performance management tool, or custom spreadsheet helps you organize and visualize performance over time.

Ensure accuracy and fairness in your measurement efforts so you obtain reliable and actionable data. One way to do this is by setting clear and objective criteria for measuring sales performance. Clearly communicate criteria, goals, and rules so each sales rep understands how their performance will be tracked and rewarded.

Analyzing results and adjusting spiffs

Based on your sales quota, you can identify successful spiffs and make data-driven changes for continuous improvement. Steps for analyzing results include:

1. Collect data related to the spiff initiative, including individual and team performance.
2. Evaluate achievement by comparing actual performance against targets.
3. Calculate the return on investment (ROI) of the spiff by comparing the revenue generated with the cost of the incentives.
4. Look for patterns and trends in the data to determine which spiffs led to the most significant improvements.
5. Analyze the participation rate of sales reps to measure engagement.
6. Gather feedback from participants to learn what went well and what can be improved in the future.
7. Identify various challenges that occurred during the spiff period.
8. Implement data-driven adjustments to future spiffs by modifying incentives, changing targets, or adding new rewards.

Recognize and celebrate success

Effective sales spiffs are great for driving sales and generating revenue, but they also provide a great opportunity for recognizing and celebrating success within your sales teams.

Successful companies foster an environment of encouragement, support, and praise to keep salespeople engaged and motivated. Spiffs can also provide a sense of ownership of the sales process and make sales reps feel like valued members of your company.

As your business continues to grow, make time to stop and celebrate success both small and large. Explore other sales and marketing resources to help you develop a winning sales strategy. Tracking your spiff performance and measuring the impact of your sales efforts is easier than ever thanks to intuitive reporting and metrics tools from Mailchimp.