SPIFFs otherwise known as Sales Performance Incentive Funds are contests that essentially accelerate sales. Even though SPIFFS are usually short-term incentives, it’s important to know that they help you to achieve long-term goals for your revenue and they also help you with your business growth too. SPIFFs are really an investment though, and you need to make sure that you thoughtfully plan out everything and that you also execute as much as you can so that you can execute the most ROI possible.
What is a channel incentive program?
A SPIFF is essentially a time-sensitive program. It’s geared towards channel partners and it’s fully designed to boost your sales. SPIFFS is also ideal if you want to try and strengthen your relationships between sales and your resellers. The main reason why you would create SPIFF programs is so that you can boost your overall performance and so that you can push some of your products. You can also engage your salespeople this way too. If you want to make sure that your SPIFF program for your partners is the best that it can be then you can find out everything you need to know, right here.
Why Should you Set Up a SPIFF Program?
A SPIFF program can easily give you long-term visibility and it can also give you a lot of name recognition too. It’s ideal if you want your product to stand out, and it can help your salespeople to push products more often. It can work wonders for you and it can help you to stand out from your competitors too. The best example comes from the 1990s. When the PC came out, salespeople needed to be encouraged to give demos of products. Early Apple and even IBM used SPIFF incentives so that they could cut out Texas Instruments from PC sales. When you use it as recommended, for short periods of time you will soon find that you can drive your sales numbers and you can also exceed your sales goals too. Most of the time, your SPIFF will be set up by the vendor and it will reward the salesperson for certain sales. It may be that you offer £10 for every product that is sold in a specific weekend, for example. The sales figures are then sent to the manufacturer who will then deliver a cheque. If 100 were sold, the SPIFF would be £1,000.
What is a SPIFF Commission?
So on paper, SPIFF looks great, but there are a few things that you need to know about it. SPIFF can be costly. If you aren’t careful then you may find that things add up very quickly and you need to make sure that you can afford the commission. If you have salespeople who cannot afford what they have been promised then this can cause trouble and this can spill over to cause legal issues at a later date as well. When you’re looking at SPIFFs, it’s a good idea for you to set a budget of around 3-7% of your total incentive program.
What can be Measured with SPIFF?
With SPIFF, you can measure the sales of specific product lines or even services. You can also measure specific markets that you can target or even specific channels. It’s also possible for you to measure the desired revenue or even the percentage increase you have experienced in sales. Mapping out goals or plans with your SPIFF program way ahead of time will give you the structure you need and it will help you to embark on your journey much more efficiently. Choosing the best reward amount for your partners is essential. Ideally, you need to look at between 5 and 25% for the first year.
How Do You Set a Good SPIFF Program?
If you want to make sure that you are setting up the best SPIFF program then you need to look below and follow this simple guide.
1. Define your Goals
The first thing that you need to do is try and define your goal. You need to set aside time so that you can pre-plan everything you possibly want to achieve. You need to start out with questions that are all tied with your goals. You need to look at how you are going to incentivise your partners so that you can reach your goal and you also need to define the metrics you want to use to measure the performance overall. If you want to try and set appropriate goals then it’s helpful for you to take a good idea of the stock you have right now. You also need to look at the points of your business that are the weakest. Think about it, which products or services would benefit you the most if you had a partner incentive program? If you know that the summer is a slow time then you may want to actively structure your SPIFF so that you can get a bit of extra push. On the flip side, you may want to do it during the busiest period, so that you can capitalise on the maximum amount of momentum.
2. Create a Marketing Strategy
You need to make sure that you pre-plan your marketing strategy if possible. It’s also important for you to plan out your communications strategy around your SPIFF program too. A lot of organisations make the mistake of launching their program and then they market it as an afterthought. You have to make sure that you prepare for your program ahead of time and you also need to make sure that you are putting in the work too. If you want to market your strategy then you need to tease your upcoming SPIFF launch and you also need to send out email announcements too. Virtual kick-offs are also ideal, along with special announcements.
3. Select Incentives
Choose the best method of compensation for the participants who may well be taking place in your incentive program. At the end of the day, SPIFFs are usually based on rewards, so the price that you are choosing is critical to how effective your plan is. If your participants are really not excited about your offer then they may not participate and they may not have the motivation they need to succeed. This is why cash is such a brilliant choice for SPIFF. There aren’t many people out there who wouldn’t be truly excited about having a bit of extra income. Some companies at the end of the day, create prepaid credit cards that continually disperse money to an account as the rep closes deals, so this is a fantastic way for you to ensure that your team is being rewarded.
4. Choose your Participants
Choosing people to participate in your program is very similar to what you do when you target a buyer’s persona in a marketing campaign. Choosing participants is way more than just choosing specific partners. You have to make sure that you are taking into account the individual persona of the people who are participating and you also need to think about their motivations too. You have to make sure that you have a firm grasp of who you are targeting too as this will help you to create a channel partner incentive that is fully tailored to them while also giving them an incredible amount of incentive. If you want to understand your target SPIFF, then think about their age, their gender, salary, seniority, payment structure, and job title.
Bottom Line
So a SPIFF program can easily give you some incredible results and it can also help you to keep your revenue in check too. If you can create an effective program then this can help you to map out your goals, your marketing, your rewards, and even your participants. When you execute everything correctly, you will soon find that you can motivate your partners while also being able to build incredibly strong bonds. This will help you to achieve success and it will work wonders for you in the long-term.