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Sales SPIFFs: Sales Performance Incentive Funds Explained

Sales SPIFFs are an essential tool in the arsenal of every Sales Manager. When every deal won is a step toward both company goals and personal victories, the introduction of Sales Performance Incentive Funds (SPIFFs) can turbocharge your team's motivation.

Designed to ignite a fire under your sales force, SPIFFs offer targeted, short-term incentives that not only boost sales but also foster a culture of excellence and (healthy) competition.

Whether it's rewarding the sale of specific products or smashing through quarterly targets, SPIFFs are about turning the ordinary into the extraordinary.

Join us as we delve into the dynamic realm of SPIFFs, exploring how they can transform your sales team into an unstoppable force to be reckoned with. 

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What is a sales SPIFF?

SPIFF stands for ‘Sales Performance Incentive Fund’. A SPIFF is a short-term reward that sales reps can earn for achieving their assigned goals within a specific time frame. A SPIFF is an immediate bonus, so it is used to quickly inject motivation into sales teams, helping to improve short-term performance.

SPIFFs often refer to a specific incentive used to drive sales of a new product, as an upsell initiative or to coincide with a particular promotion.

The idea behind sales SPIFFs is that they offer a quick and effective boost to employee engagement, which drives improved sales performance. Ultimately, this brings businesses a strong ROI in the form of higher value sales and a reliable way to shift otherwise slow-to-sell products. 

One thing that sets a SPIFF apart from another type of incentive is its immediacy.

Sales pros don’t have to wait for the next paycheque or Christmas party to receive this incentive. 

A SPIFF could be monetary, but it doesn’t have to be. So long as it’s offered as an immediate bonus for meeting a particular goal, it counts. 


Sales Performance Incentive Fund


Where did the term SPIFF come from? 

Nobody quite knows, but the term SPIFF has been used for more than 150 years. Back when employee incentives were still a novel idea for businesses to dabble in, SPIFF referred to the commission that a salesperson could expect to receive for selling slow-to-shift stock. 

Last year’s bolts of fabric, for instance, would be assigned a SPIFF (unbeknownst to the customer, of course) which would be represented by a small mark on the label, promising the salesperson a bonus if they could convince a customer to buy it.

Ever since then, the term has continued to refer to immediate bonuses that sales teams can expect if they manage to meet a particular sales target.  


Do sales SPIFFs work? 

Absolutely. Why? Because sales pro disengagement is a little like a drain on an otherwise watertight business model. 

Sales targets in and of themselves are not necessarily motivating. Even a brand-new sales team is motivated by something – if not a tangible reward, then the ability to prove themselves and stand out as a top performer.

But the drive toward the top of the ladder can keep even the very best sales teams motivated for only so long. Whether they start to feel as though their efforts are going unrecognised, are off-kilter with the company’s goals, or feel that they are adrift with no clear development opportunities – or any number of other reasons – the fact is that no employee is immune to that sense of disengagement and demotivation.

Unfortunately, plenty of stats suggest that disengaged employees are in the majority. 

One particularly startling statistic shows that, in the US, 85% of employees are not engaged with the workplace. These employees inevitably represent the source of the drip – a pretty significant loss of revenue that can’t be remedied without decisive action at the source. 

The Workplace Research Foundation discovered that employees who feel engaged with the company they represent are 38% more likely to be above average in terms of productivity

In other words, you can’t compensate for employee disengagement elsewhere. Investing into other aspects of the business in the hope of boosting revenue and sales is just dancing around the point. 

How SPIFFs help sales and customer loyalty

SPIFFs vs sales commissions:
What’s the difference?

Distinguishing between SPIFFs and traditional sales commissions is crucial for designing a strategy that hits the mark. 

Both are powerful motivators, yet they play distinctly different roles in the sales ecosystem.

Sales commissions: The steady pulse of sales

Sales commissions are the backbone of many sales compensation plans. They function as a direct percentage of what the sales rep makes. 

Commissions are a marathon, not a sprint; it's about endurance, rewarding the long-term consistency and overall performance of sales professionals. 

Commissions create a stable, predictable motivation structure, encouraging sales reps to continually engage with all potential leads and close deals. They reflect the ongoing success and contribution of an individual to the company's bottom line, making them a fundamental part of the sales landscape.

Sales SPIFFs: The spark of immediate action

In contrast, SPIFFs are the sparklers at the sales party – bright, exciting and ephemeral. 

They are designed to achieve specific, short-term goals, such as clearing out old inventory, promoting a new product or pushing sales numbers over a particular period. 

Unlike the steady rhythm of commissions, SPIFFs create an immediate buzz, offering cash bonuses, prizes or other rewards for meeting short-term targets. They tap into the competitive spirit, pushing sales teams to pour extra effort into achieving well-defined objectives within a set timeframe.

Creating a strategic symphony

While sales commissions provide a continuous incentive, fostering reliable 'steady Eddy' sustained effort over time, SPIFFs are about capturing lightning in a bottle – creating a focused, intense push towards specific goals. So the key to a successful sales strategy is understanding how to harmonize these two elements. Sales commissions ensure a solid foundation, while SPIFFs offer timely boosts, keeping the sales team inspired and ready to leap at fresh opportunities.


How to get salespeople to really care

*Free guide*

With these actionable tips, your team will deliver peak performance so you smash sales targets.

The Magic of Non-Cash SPIFFs

The allure of cash bonuses as a form of SPIFF has long been recognised. Cash, with its universal appeal and flexibility, seems like an obvious choice. However, the true art of motivation lies in understanding the deeper desires and aspirations of your sales team.

This is where non-cash SPIFFs shine, transforming incentives into memorable experiences and coveted rewards that leave a lasting impression far beyond the ephemeral joy of a cash bonus.


The shortcoming of cash incentives

While cash SPIFFs offer the immediate gratification of financial gain, they often blend into the day-to-day expenditures of life, losing their motivational lustre over time.

The extra cash, though welcomed, can quickly be absorbed by routine expenses, from utility bills to groceries, diminishing its impact and failing to leave a memorable mark on the recipient's journey.


The Lasting Impact of Non-Cash SPIFFs

Non-cash SPIFFs, on the other hand, offer a realm of possibilities that cash simply cannot match.

They bring an element of surprise and delight, crafting experiences that become talking points and cherished memories for years to come.

For example, imagine the excitement of winning an exclusive weekend getaway to a luxury resort, complete with spa treatments and gourmet dining, or the thrill of securing VIP tickets to a sold-out concert of a favorite artist.

These are not just rewards; they are experiences that build emotional connections and stories worth sharing.

Moreover, non-cash SPIFFs tap into the unique passions and interests of each team member, making the incentive deeply personal and highly motivational. Whether it's the latest tech gadget for the tech-savvy, a private cooking class with a celebrity chef for the culinary enthusiast, or a rare signed memorabilia for the sports fanatic, these rewards speak directly to the individual's heart.


The competitive edge of creativity

The beauty of non-cash SPIFFs lies in their ability to fuel the competitive spirit with a more creative spark.

When sales teams know that an extraordinary and unique prize is on the line, their drive to achieve sales targets can significantly increase. The anticipation of winning something truly special and the prestige of being the top performer add layers of excitement and engagement to the sales process, making the competition more fierce and fun.


Retain business with a customer loyalty programme

How SPIFFs improve customer loyalty 

Better productivity and increased engagement on the employee side of the business are like the many ropes, cables, costume racks and prop tables that are housed behind a stage. The audience (in this case, your customers) will never look directly at them – or even think about their existence, ideally – but the effect of their being there will be tangible.
Without them, the show can’t go on. True, the actors are on-stage, but how good a performance can they put on when the lights aren’t working, the props are missing, the costume-changes can’t be carried out, and the scenery is falling down left, right, and centre? 

Not a great performance at all.

A sales SPIFF isn’t for the customer’s eyes. Back in the 19th century, shop owners would mark SPIFF products with a vague symbol – a hieroglyph, for instance – to ensure that the message was received by the salesperson, but that the customer was none the wiser. 

But engaged salespeople – those who are truly motivated to push forward on sales targets and meet goals - are true brand believers. Their passion and advocacy ultimately shines through, and ensures each customer receives a memorable, enthusiastic experience that they will want to repeat time and time again. That makes the world of difference to a customer – and your business. 

Customer loyalty isn’t just predicated on the incentives you give them – although choosing the right rewards is certainly important. Beyond the incentives, you also have to create the sort of experience that inspires an emotional connection – something that runs a lot deeper than whatever deal or promotion you (or your competitor) are running. That means utilising the marketing channels available to you in order to maintain contact, giving them an experience that feels unique, rather than copy-and-paste, and optimising every element of their experience with your brand. 

Nielsen found that, in the marketing world, ads that elicited an emotional response generally led to a 23% spike in sales. That’s an incredible pay-off for targeting our emotional minds, and an excellent example of how easily driven we are by our happy chemicals. With an engaged sales team – one incentivised by a structured incentive programme – you can tap into that emotional connection further still, and reap the rewards.  


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SPIFF reward ideas

Now, let's explore some unique and engaging non-cash SPIFF ideas to ignite enthusiasm and drive in sales teams...

1. Recognition via company channels

Shining a spotlight on your top performers through recognition in company newsletters, social media channels or at annual galas can provide a significant motivational boost. This type of recognition celebrates their achievements in a public forum, enhancing their sense of pride and accomplishment.

2. Exclusive workshops and masterclasses

Offering exclusive access to workshops or masterclasses with renowned experts can be an exhilarating reward that builds strong bonds within your sales team. Imagine the motivational boost when your top performers get an opportunity to refine their skills with a cooking class from a celebrity chef or a creative writing workshop with a bestselling author. These experiences not only reward them but also contribute to their personal growth whilst delivering a great team-building experience.

3. Adventure experiences

For the thrill-seekers in your team, nothing beats the excitement of adventure experiences. Be it skydiving, hot air balloon rides, or off-road racing, these adrenaline-pumping activities offer unforgettable memories and stories worth sharing. Such rewards resonate well with the adventurous spirit, pushing the team to strive for these exhilarating moments.

Home & Tech

4. Tech toys and gadgets

From the newest smartwatches to drones, offering cutting-edge technology as a reward can spur a tech enthusiasm rarely matched by cash incentives. It's a way to keep your team updated with the latest trends and gadgets, fueling their tech-savvy souls.

5. Relaxation and personal development retreats

A rewarding experience that combines relaxation with personal growth, retreats focused on mindfulness, wellness or creativity can be a profound incentive. These retreats offer a respite from the digital overload and the frenetic pace of sales, allowing your team members to reconnect with their inner selves, return refreshed and ready to tackle new challenges.

6. Privileged access

Offering privileged access to exclusive company events, such as annual galas or even private luncheons with the CEO, can be a unique way to reward your sales team. It's a gesture that underscores their value to the organisation, providing them with networking opportunities and a sense of inclusion in the company's elite circle.

Each of these non-cash SPIFFs brings its own set of advantages, from creating lasting memories to fostering personal growth and enhancing team motivation.

By thoughtfully selecting rewards that resonate with your team's preferences, you can cultivate a culture of excellence and innovation, driving your sales force towards unparalleled success.

But no matter which format the rewards take, integrating SPIFFs alongside traditional commissions allows companies to navigate the delicate balance between long-term growth and short-term objectives, ensuring a sales force that is not only consistent but also capable of extraordinary bursts of achievement when it counts the most.

How to get salespeople to really care

*Free guide*

With these actionable tips, your team will deliver peak performance so you smash sales targets.


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