SPIFF

Your Guide to Everything Spiff-tastic

[spif]

Spiffs are short-term incentives targeted at individual sales reps to accelerate sales of a particular set of products within a specific span of time. Also known as channel incentive programs and sales incentive programs, spiffs produce performance improvement, measurable results, and engaged participants.

Origin

An early reference to a spiff can be found in a slang dictionary of 1859. It was also used in the mid-19th century to mean a dandy or smartly dressed gentleman (hence spiffy, and to spiff up — to improve the appearance of a place or a person).

Today

These days, spiff programs are a fundamental element of sales management and can serve many useful purposes. Incentive programs can provide general motivation of the sales force, or they can improve performance in targeted areas.

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Improve Performance

If selected, implemented and monitored correctly, incentive programs increase performance by an average of 22 percent.

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Engage Participants

When asked to persist toward a goal, people increase their performance by 27 percent when motivated by incentive programs.

A program’s success and return on investment depend on how well it’s implemented. We’ve got the roadmap to get you started.

HOW TO CHOOSE AN AGENCY

Define Your Goals

The first step, the most important step, is defining your goals. The #1 mistake made by frantic companies is racing to implementation without clear, concise, written goals.

What should you consider when defining goals?

What factors are critical to the success of your business?

  • Sales
  • Market share
  • New customers
  • Pipeline generation
  • Employee enablement, training, education
  • Engagement of employees, customers, partners
  • Customer Service

Keep in Mind

The two most important perspectives to keep in mind as you develop and evaluate any spiff program are:

Sponsors

Will the executive sponsor of the incentive feel the program’s investment generated a satisfactory return?

Participants

If you were a participant in the program, would you put forth the extra effort required to take advantage of the earning opportunity?

Your Target Audience

Now, determine who can impact your goals and how. Start by making a list of who is in your target audience.

DEMOGRAPHICS

  • Employees or customers
  • Sales reps, channel partners, third-party agents
  • Age — average and range
  • Male / female
  • Average income
  • Functional role, job titles, and levels
  • Number of participants
  • Number of locations, stores or companies
  • Countries, regions, divisions

PSYCHOGRAPHICS

  • Level of buy-in or engagement presently
  • Current level of motivation
  • Capability to improve, learn or sell
  • Extrinsically or intrinsically motivated
  • Attitudes, interests, opinions

Engaged Participants

70% of American workers are “not engaged” or “actively disengaged”.

Move the Middle

This advice is counterintuitive — motivating middle performers fuels more sales growth than focusing on top performers. In the 20-60-20 breakdown, top performers are fewer in number. So, the company’s average performing sales reps, the “middle performers,” are actually your greatest opportunity.

Program Structure

An effective program structure, or incentive contest rules, must be designed to achieve your objectives and budget parameters. Tell the participants what you want them to do and what they will earn for doing it.

Program Types

EVERYONE CAN WIN

Open-ended
Programs

Enable all people who achieve program goals to earn awards.

TOP FEW WIN

Closed-ended Programs

Have a pre-determined, limited number of award earners.

TIER 1, TIER 2, TIER 3

Plateau
Programs

Provide awards at different levels of program achievement.
SEE THE PROS AND CONS

What Spiff?

Engagement
Burnout

Contest Duration

Research consistently suggests that spiff programs that are too short in duration often fail to achieve buy-in because it takes people too long to learn about them before they’re expected to act. Alternatively, longer-term programs can suffer from “program burnout” because employees simply lose interest. It usually makes sense to align the program with a buying cycle or the business’s financial reporting period.

Award Options

A common trap is for the award provider to select awards they prefer rather than awards the recipient would like.

Merchandise

Participants can select their award of choice for lasting trophy value

Prepaid Cards

Branding offers personalization; great for channel spiffs

Gift Cards

Best for short-term spiffs and employee reward programs

Travel/Experiential

Sharable rewards create memorable experiences

Determine the most motivational awards by asking

  • What will catch their eye?
  • What have they done or earned before?
  • What is the hot destination or cool gadget?
  • Do they have children?
  • Are they sports enthusiasts?
AWARDS MATRIX

Cash or Non-Cash?

Everyone asks: “What is better: cash or non-cash awards?” The mob of sales reps clamor, “Give me cash, not prizes.” Before launching a spiff program, Human Resources wisdom advises that basic, monetary needs must be met first by existing compensation structures. Conclusion: Cash is king for base compensation and non-cash spiffs add extra motivation.
SEE MORE BENEFITS

Technology Platform

Behind the scenes of your spiff program lies the backbone of its long-term success. More than just a pretty web design, the technology infrastructure and databases supporting your spiff are vitally important to its smooth performance, engaging UX (user experience) and ease of maintenance.

Tracking Your SPIFF Program

 EXCEL SPREADSHEETINCENTIVE WEBSITE
Participants<50>100
Total Rewards<$10,000>$20,000

A good technology solution will include these key elements

Key webpages:

  • Home
  • Program Rules
  • Enrollment
  • Current Promotions
  • Claim Form
  • My Account
  • Award Catalog
  • T&Cs
  • FAQs
  • Contact Us

Website deliverables:

  • Website development
  • Customization options
  • Content management systems
  • Online forms
  • Redemption or shopping cart functionality
  • Secure data center hosting and monitoring
  • Real-time reporting

Ignite Your Program

Ignite™ is Brightspot’s flexible SaaS platform that enables quick launch and provides robust technical options for your online incentive program website.
GET STARTED

Communications

Far too often, the incentive promotion strategy is an afterthought late in the spiff launch. Like any successful marketing effort, an effective spiff program needs a comprehensive campaign strategy.

TEASER

Hints at events to come and piques interest

GRAPHICAL EMAIL ANNOUNCEMENT

Delivers exciting announcement right to participant’s inbox

KICKOFF ANNOUNCEMENT

Don’t rely solely on email

KICKOFF EVENT

In-person demonstrates a commitment to the spiff’s success

POSTCARDS

Catch attention with a well-designed mailer

POSTERS

Themed super billboards embellish large spaces

MONTHLY STATEMENTS/ NEWSLETTERS

Frequent communication keeps program top-of-mind

GIVEAWAYS

Tangibles generate excitement – consider at kickoff and mid-way points

The Strategy

The #1 mistake is tiny communication or promotional budgets. The incentive becomes the best-kept secret.

Build the Budget

Properly designed, a spiff program will be self-funding with incremental gross margin on the increased sales volume. It pays for itself!

Key Budget Drivers

  • Number of participants
  • Percentage of participants
    achieving incentive levels
  • Duration of program
  • Average award amounts
  • Forecasted results

Estimated Program Budget

(based on percentage of profit contribution that the incentive program will generate)
.5 – 3.0% of total gross profit
5 – 10% of incremental gross profit

Rule of Thumb

Our incentive budget rule of thumb is 10% of total budget for each support component. For large programs or simple programs, the percentages could be lower. For programs that are small, short-term or complex, the percentage could be higher.

ESTIMATE YOUR BUDGET
Spiff Program Worksheet for 12.5 Steps to a Perfect Incentive Program

Ready to build your very own spiff program?

Let this Planning & Design Worksheet be your guide.

DOWNLOAD WORKSHEET

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