In this piece of content, you will find out what a spiff is and why you need to know about it.
.png)
So, before diving right into the question, what is a spiff in sales? Let's understand what it stands for:
SPIFF or SPIF is used to increase the victory of suggestive selling and can be defined as:
A spiff is slang for a quick bonus for sale. Generally, spiffs are paid directly to a salesperson for selling a particular product, either by a manufacturer or employer.
Spiff stands for Sales Program Incentive Funds. It is incentive program companies use to drive sales. When commodities are not selling well, or if stock items need to be sold or cleared, the company runs a campaign.
Or, when a sales sprint is put in place on a sales team, the business will implement a spiff program to increase sales during a specific period.
These campaigns can run for days, weeks or even months, depending on how many products need to be moved or the target revenue number. Spiff programs permit the sales team to earn cash or other incentives.
A spiff is bonus money. When salespeople reach a certain plateau in sales, they are awarded "push money." At the end of the campaign, the salesperson can cash in on their rewards by turning in their sales receipts for verification.
Nevertheless, this type of Spiff is not tax-free; it must be reported on a 1099-misc tax form when the annual amount surpasses the IRS limit for the calendar year.
Regardless of which type of incentive program you choose, you must be ready to put in the time or partner with a third-party incentive program company, which will strategize, implement and manage the Spiff program.
Some SPIFFs and SPIVs cost more than others, and they may require more time than you have or are willing to give.
Before you decide to offer a spiff or spiv program, be sure to seek a third-party expert to know you are choosing the right one from the start.
Now, that you know what is a spiff in sales, then let’s talk about incentives.
Sales Promotion Incentive Fund can deliver merchandise like smartphones, tablets, or a smart television to capture the attention of sales teams.
The incentive will drive the salespeople to work extra hard to sell those hard to move items. At the same time, incentives do not need to be expensive; trendy things will work.
They can be company swag, in-store banners, product brochure displays, branded apparel, or even commonplace items like cameras and multi-purpose tools.
Spiff participants are great at choosing their incentives, so why not offer them a choice of awards? Getting them into the groove of things initially will help the program run smoothly.
Spiffs can promote several types of incentive awards. Awards are earned when participants make a set number of purchases or sell "X" number of dollars during a particular campaign.
Cash is favoured over a loyalty points system because money has an instant gratification value. Spiffs are meant to be fun for participants.
In the early years, spiffs were used to help launch Apple computers, and IBM used spiff programs to keep their brand more potent in the public's eye.
Salespeople during this era earned incentives to demonstrate the use of these computers. With any program, when an incentive doesn't satisfy an employee's need, the program fails to deliver on its promise.
This failure can leave a negative impression on a great product or company.
Other types of programs include:
Let's say you have a short-term goal that you need to hit within a few weeks. Any purpose doesn't land neatly at the end of the quarter or the year. If you have a tight deadline to hit any specific goal, that's where spiffs shine.
The real benefit of spiffs is they can take many forms: a gift card, an extra vacation day, a catered happy hour. You could also make it a simple cash prize!
Spiffs will help:
Employee disengagement can cause problems for many businesses, and it can be tough to keep employees efficient and invested in sales goals.
Since spiffs provide an immediate reward upon completion, they have been known to increase employee participation. Also, they provide healthy competition in the workplace.
If your business needs to meet a goal in a short amount of time, spiffs are the way to go. They allow sales reps to meet their quotas quickly and contribute to overall sales needs.
Spiffs are an essential part of your sales incentive program, but they should not be your program's primary focus. If so, they might prioritize other, more important goals for the organization. However, a successful spiff program can help usher new prospects and accelerate customer signups.
Spiffs aren't perfect. They should only be used as bolt-ons to mainline incentive programs. Spiffs should only be used to address specific and unique business needs.
Here are some risks and issues associated with spiffs when misused.
In addition, if spiffs aren't paid correctly, some reps are incorrectly disqualified, or spiff funds run out, your representatives may feel cheated out of a commission, which will backfire.
The answer is simple. Companies use spiff programs to increase their profits. Some merchandise does not have loyal patronage, especially non-name brand items.
Therefore, when new brands hit the market, they need to be appropriately introduced to the public. In that situation, the manufacturer can offer the retailer a certain percentage of the profit to boost product sales.
Advertising alone is not enough. There has got to be an incentive involved that benefits the sales team, the store, and the manufacturer.
For instance, if two-year-old dishwashers aren't selling as they should, this can look bad for the manufacturer. And it could look like the sales team is not trying to push these dishwashers out of the store.
Manufacturers offer an incentive to the sales teams if they rapidly move their merchandise. The incentives motivate the sales team to offer customers an additional percentage off, free or lower-cost delivery/installation.
Or, perhaps, a larger bundle of items for the same price. Whichever is more significant to the consumer.
So, I am sure you must have learned what is a spiff and why companies use it.
Now is the time to go and implement it in your business. Come on, go and use this technique and tell whether it helped?
