4 Tips to Maximize Spiffs
A quick tour of the Internet will tell you that many companies use SPIFFs … or Special Performance Incentive Funds to drive sales. A SPIFF is usually a contest or short-term incentive that utilizes an award to drive a behavior or goal. The award can be either cash, cash equivalents (gift or cash cards), or tangible awards like appealing merchandise or travel that will motivate behavior and goals like:
Increased sales or profitability
Specific products or high profit sales
Sales behaviors that will lead to higher sales or profitability
Addition of an element of fun and excitement
Frequently SPIFFS also return widely varying results. Below is a quick guide to designing a SPIFF that will give you the results you are counting on.
The most important SPIFF design element is always the outcome. What exact outcome do you want to occur? More volume? A specific type of product sale? More activity? Higher profits? Greater loyalty?
Who is it that can impact this outcome…top performers, middle managers, new hires, distribution network, sales support staff?
How difficult will it be for them to attain your outcome? Factor this answer against how badly you want the outcome to determine your reward budget. The harder and more desirable the outcome, the higher the individual reward needs to be.
A good spiff is not a general call to sell more. It targets one specific goal or behavior within a limited time frame. The point of a SPIFF is to focus the attention of participants on your chosen outcome.
Goals and behaviors can be individual, team based
Sell 20 cases of product X in September
Meet 10 new customers in the next 2 weeks
Increase your personal volume by 10% in the 3rd quarter.
A SPIFF is only as effective as your communication. Participants will lose interest without immediate, specific feedback on how well they are doing. It is probably not possible to over communicate. You need to report:
Individual progress to goal
Ongoing company or product results
Top performers and their success stories
First time sales for specific participants or anytime a participant does something new that results in a sale
Big wins for the company and participants
Every time you communicate any element of the SPIFF progress, you are tapping into participant motivation, competition and engagement.
Finally, think of a SPIFF as a “jump-start” for unique, situational behavior. When participants begin to rely on SPIFFs they lose their effectiveness. Extra effort is reserved for the next big sales push. The result is spiking sales cycles and a dependence on SPIFFS to control them. To avoid these cycles, use SPIFFS moderately and refer to #3…ongoing, continuous progress communication.