By Indeed Editorial Team
Achieving sales and keeping high client volumes increases the revenue and success of an organization. Many organizations offer various incentive programs to motivate sales representatives and reward hard work. SPIFF refers to a short-term sales incentive tool that provides bonuses to representatives who meet their goals.
In this article, we discuss the definition and uses of SPIFF in sales occupations and include a list of tips for implementing SPIFF strategies.
What is a SPIFF?
The acronym SPIFF refers to a short-term sales incentive strategy that offers monetary bonuses for sales professionals who achieve a specific goal. Many organizations offer SPIFF incentives based on goals such as sales quotas, client contract agreements, sale closures and demonstration bookings. The meaning and acronym for SPIFF can vary according to the organization or use, but all refer to incentive strategies used to increase sales. Here are some common acronym meanings for SPIFF:
-
Sales person incentive forms
-
Sales performance inventive funding formula
-
Special performance incentive fund
-
Specific price incentive for final sales
-
Special pay incentive for fast sales
Why use a SPIFF strategy?
A SPIFF strategy allows you to motivate and celebrate the sales team as they work to meet a goal. Some advantages of using a SPIFF incentive program include:
Increasing sales numbers
A SPIFF program provides tracking and objectives for sales numbers and increases. Incentivizing a quota with a financial or appealing reward offers additional motivation and can improve sales numbers by engaging sales representatives and increasing their determination. Many organizations offer SPIFF strategies during promotional periods, lower-earning sales quarters and new product releases. Implementing a SPIFF program can offer many benefits for an organization and its sales team.
Establishing goals
Implementing an incentive program begins with setting and communicating the goal to the sales team. Creating a practical sales goal can increase sales and results by providing a realistic standard for employees to strive toward and a motivating factor to promote their efforts. For a SPIFF program, the goal encourages sales representatives to expand their normal work while remaining realistic and achievable.
Valuing employees
Offering an incentive for the sales team or other employees who work to meet new goals shows the appreciation and value of hard work. Acknowledging professionals who work to meet special goals or provide extra effort for sales and profits can increase morale and create a positive work environment. Incentives and financial compensation also show appreciation and improve the motivation and attitude of professionals working to improve quotas and sales.
Maintaining engagement
Maintaining the engagement and efforts of employees and sales teams can increase the productivity and effectiveness of sales teams. A SPIFF strategy provides a reason for employees to engage in their work, seek clients and pursue sales opportunities. The motivation and objectives provided by a SPIFF can increase and maintain employee efforts and profits.
When to use SPIFF strategies
A SPIFF strategy works to increase sales over a short period by motivating sales teams to reach higher than average quotas and goals. Here are some common situations and times when a SPIFF strategy is most useful:
Introducing new products
When an organization introduces new products or services, they aim to establish a customer base that can provide referrals, sales and reviews. During the beginning stages of new products, the organization may offer a SPIFF incentive program to motivate sales professionals to make sales, schedule demos or pursue sales leads. The SPIFF increases sales and also provides representatives with an opportunity to practice pitches and strategies for new products or offerings.
Near the end of the quarter
If a sales team achieves lower than average sales numbers during the first portion of a sales quarter, managers and leaders may use a SPIFF to increase the motivation and quotas for the end of the quarter. This final push can help boost numbers and profits to reduce negative reports from executives or auditors looking at the quarterly numbers. Using a SPIFF at the end of the quarter also improves the morale and engagement of the sales team by adding a financial motivator and sense of accomplishment.
During slow seasons
Sales numbers and seasons in many industries undergo regular sales and buying cycles that create higher and lower profits or earnings. During the slower portions of the cycles, adding a SPIFF strategy can motivate sales professionals to make extra efforts and sales to maintain regular or higher numbers. Overcoming the decrease in interest or sales activity during slower seasons can increase profits and help an organization overcome competition, risk and loss.
Tips for implementing SPIFF programs
Here are some tips you can use for implementing SPIFF programs to increase sales:
-
Choose an incentive: The majority of SPIFF strategies recommend financial bonuses and incentives for those who achieve their goals, but other sale incentives often include vacations, time-off or merchandise. Choosing an incentive that fits the organization’s budget and motivates the sales team can increase the motivation and success of the SPIFF strategy.
-
Ask for feedback: Asking for feedback from the sales team at the beginning and end of the SPIFF program can help you establish better goals and incentives. Ask sales representatives to recommend quotas, motivators and processes that increase profits and sales to find a compromise that works for everyone.
-
Set a time frame: SPIFF refers to short-term sales strategies. Setting the time frame for achieving the sales goals allows you to determine realistic goals and motivates the sales team to produce higher numbers in that period.
-
Define the goals: Defining the goals and quota for a SPIFF incentive ensures that everyone understands the objectives and requirements to earn the bonus or prize. Create a realistic goal and communicate it clearly to sales teams to provide them with a motivator and an objective to strive toward.
-
Provide steps or tips: As a manager or leader, setting a goal and providing actionable steps, procedures and tips for achieving it can increase the motivation, understanding and morale of the sales team. After establishing the quota or objective, offer resources or training that help make the goal realistic and can improve sales operations even beyond the SPIFF’s period.