Sales SPIFFs: Sales Performance Incentive Funds Explained

What is a sales SPIFF?

SPIFF stands for ‘Sales Performance Incentive Fund,’ and we think it’s a fantastic way to energise your sales teams! A SPIFF is essentially a short-term reward that your sales reps can earn by hitting their assigned goals within a specific time frame. What makes SPIFFs so special is that they provide an immediate bonus, giving your teams that quick motivation boost they need to enhance short-term performance.

Often, SPIFFs are tied to specific incentives designed to drive sales of new products, encourage upselling, or align with a particular promotion. It’s like having a little nudge to help you focus on what’s hot right now!

The beauty of sales SPIFFs lies in their ability to quickly engage employees, which can lead to a noticeable improvement in sales performance. This not only benefits your team but also translates to a strong return on investment (ROI) for the business, as you see higher-value sales and a way to move those products that might be sitting on the shelf a bit too long.

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

Unlike waiting for the next pay cheque or a holiday party to receive a reward, your sales pros can enjoy the benefits of a SPIFF right away.

And while a SPIFF can certainly be monetary, it doesn’t have to be! As long as it’s offered as an immediate bonus for meeting a specific goal, you’re in the SPIFF game. It’s all about creating that excitement and sense of achievement in the moment.

Where did the term SPIFF come from?

Well, the truth is that no one really knows for sure! What we do know is that the term has been around for over 150 years. Back in the day, when employee incentives were just starting to gain traction in the business world, SPIFF referred to the commission that a salesperson could earn for moving those products that just didn’t seem to sell.

Take, for example, last year’s bolts of fabric. These would be assigned a SPIFF—without the customer being aware, of course! There would be a little mark on the label, signalling to the salesperson that if they could get a customer to buy that fabric, they would receive a bonus for their efforts.

Since those early days, the term has evolved but still represents those immediate bonuses that sales teams can earn when they hit specific sales targets. It’s all about giving that instant reward for a job well done, keeping the motivation high and the sales rolling in!

Do sales SPIFFs work?

Absolutely, they do! And here’s why: when sales professionals become disengaged, it’s like having a leak in an otherwise solid business model. That disengagement can really drain potential, and we want to keep our teams energised and focused!

Now, let’s face it—just having sales targets isn’t always enough to keep everyone motivated. Even a brand-new sales team has their own driving forces, whether it’s the tangible rewards or the desire to prove themselves and shine as top performers. But the excitement of climbing the ladder can only keep your best sales teams motivated for so long.

There are various reasons why they might start feeling a bit off track. Maybe their hard work isn’t getting the recognition it deserves, or they feel misaligned with the company’s goals. Sometimes, they might feel lost without clear development opportunities. The truth is, no one is immune to that feeling of disengagement or demotivation!

Unfortunately, statistics show that a lot of employees are feeling this way. One eye-opening figure reveals that about 85% of employees in the U.S. are not engaged with their workplace. That’s a significant portion, and it represents a major source of lost revenue that won’t improve without some proactive steps.

Research from the Workplace Research Foundation highlights that employees who feel connected to their company are 38% more likely to be above average in productivity. That’s huge! It shows us that we can’t just hope to compensate for disengaged employees by investing in other areas of the business. It’s really important to address the source of the issue directly. Investing in SPIFFs is one powerful way to re-engage your teams and boost morale, ultimately driving those sales numbers up!

SPIFFs vs sales commissions:
What’s the difference?

Understanding the difference between SPIFFs and traditional sales commissions is essential to craft a successful sales strategy. Both play vital roles in motivating your sales teams, but they do so in very different ways.

Sales commissions: The steady pulse of sales

Sales commissions are often the backbone of many compensation plans. They typically represent a direct percentage of what a sales representative earns from their sales. Think of commissions as a marathon rather than a sprint. They reward long-term consistency and the overall performance of sales professionals.

Commissions provide a stable motivation structure. They encourage sales reps to engage with potential leads continually and close deals over time. Because they reflect an individual’s ongoing contributions to the company’s success, they are a fundamental part of the sales landscape.

Sales SPIFFs: The spark of immediate action

On the other hand, SPIFFs are like the sparklers at a party—bright, exciting, and short-lived! They are designed to achieve specific, short-term goals. This could include clearing out old inventory, promoting a new product, or boosting sales numbers during a particular period.

Unlike the consistent rhythm of commissions, SPIFFs create an immediate buzz. They offer cash bonuses, prizes, or other rewards for meeting short-term targets. By tapping into the competitive spirit, SPIFFs encourage your sales teams to put in extra effort to reach well-defined objectives within a set timeframe.

Creating a strategic symphony

To devise a successful sales strategy, it’s crucial to harmonise these two elements. Sales commissions provide a solid foundation, ensuring a reliable and sustained effort over time. Meanwhile, SPIFFs offer timely boosts that keep your sales team inspired and ready to seize fresh opportunities.

In this way, commissions and SPIFFs work together like a finely tuned orchestra. Both are essential for driving motivation and achieving success in the ever-evolving world of sales!

The Magic of Non-Cash SPIFFs

We all know that cash bonuses are appealing. They have that universal charm and flexibility that makes them an obvious choice for incentives. However, the real magic of motivation comes from understanding what truly inspires your sales team.

This is where non-cash SPIFFs really shine. They turn incentives into memorable experiences and sought-after rewards. Instead of just a quick cash boost, these rewards create lasting impressions that resonate with your team.

Imagine a delightful dinner at a fancy restaurant, a weekend getaway, or even exclusive merchandise. These experiences can spark joy and create lasting memories. They show your team that you value their hard work in a unique way.

By focusing on what truly excites and motivates your sales professionals, you can transform incentive programmes into something truly special. Non-cash SPIFFs not only encourage performance but also foster a sense of belonging and appreciation within your team. Let’s embrace the magic of these rewards and watch our sales soar!

The shortcoming of cash incentives

We can all appreciate the appeal of cash SPIFFs. They provide that instant gratification of financial gain, which is certainly nice! However, there are some downsides to relying solely on cash incentives.

Over time, cash bonuses can blend into our everyday lives. They often get absorbed by routine expenses, like utility bills and groceries. This means that the excitement they bring can quickly fade away. Instead of motivating us, the extra cash may lose its sparkle and become just another part of your regular budget.

When we think about it, cash doesn’t always leave a lasting impression. It’s easy to overlook how we spend it, and it doesn’t create memorable experiences. Instead of feeling special, it can feel more like just another financial transaction.

That’s why it’s important to consider other forms of motivation. By exploring non-cash SPIFFs, you can create incentives that truly resonate with your team. These rewards can be unique and memorable and lasts longer than any cash bonus.

The Lasting Impact of Non-Cash SPIFFs

Non-cash SPIFFs open up a world of possibilities that cash simply can’t match. They add an element of surprise and delight, creating experiences that your team members will cherish for years to come.

For instance, imagine the thrill of winning an exclusive weekend getaway to a luxury resort. Picture spa treatments, gourmet dining, and relaxation in a beautiful setting. Or think about the excitement of securing VIP tickets to a sold-out concert featuring a favourite artist. These aren’t just rewards; they’re unforgettable experiences that create stories worth sharing.

Non-cash SPIFFs also allow us to tap into the unique passions and interests of each team member. This makes the incentive feel deeply personal and highly motivational. For the tech-savvy, a brand-new gadget can be a dream come true. For the culinary enthusiast, a private cooking class with a celebrity chef can be the experience of a lifetime. And for the sports fanatic, receiving rare signed memorabilia can be incredibly special.

By choosing non-cash rewards, we can connect with our team on a more emotional level. These experiences not only motivate but also strengthen your team’s bond.

The competitive edge of creativity

The beauty of non-cash SPIFFs is that they can really fuel your competitive spirit with a creative spark. When your sales teams know there’s an extraordinary and unique prize up for grabs, their motivation to achieve sales targets can soar.

The anticipation of winning something truly special makes a big difference. It’s not just about the prize itself; it’s also about the excitement and prestige that come with being the top performer. This adds extra layers of fun and engagement to the sales process.

Imagine the buzz in the office when everyone is vying for a fantastic reward. The thrill of competition pushes everyone to put in their best effort. You begin to think outside the box and explore new strategies to reach your goals.

With non-cash SPIFFs, you create an environment where everyone feels inspired to excel. The creativity involved in these rewards makes the competition fierce yet enjoyable. Let’s embrace this competitive edge and watch your sales team thrive as they chase after amazing experiences together.

How SPIFFs improve customer loyalty

We know that boosting productivity and engagement among your employees is crucial for success. Think of it like the many ropes, cables, costume racks, and prop tables hidden behind a stage. The audience, which in this case is your customers, might never see these elements or even think about their existence. However, their presence has a tangible impact on the overall performance.

Without these behind-the-scenes supports, the show simply can’t go on. Yes, the actors are on stage, but how well can they perform if the lights are out, the props are missing, and the scenery is a mess? Not very well at all!

Similarly, sales SPIFFs are not meant for the customer’s eyes. Back in the 19th century, shop owners would use symbols—like a hieroglyph—to mark SPIFF products. This ensured that the message reached the salesperson while keeping the customer unaware.

When your salespeople are engaged and motivated to meet their targets, they become true believers in your brand. Their passion shines through in every interaction, creating memorable and enthusiastic experiences for customers. This makes a world of difference and encourages customers to return time and time again.

Customer loyalty isn’t solely built on the incentives you offer—although selecting the right rewards is important. Beyond incentives, you must create experiences that inspire emotional connections. This goes deeper than any promotion you or your competitors might run. You need to utilise available marketing channels to keep in touch, offering experiences that feel unique rather than generic.

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.

SPIFF reward ideas

Now, let’s explore some unique and engaging non-cash SPIFF ideas to ignite enthusiasm and drive within your sales teams!

  Recognition via company channels

Shining a spotlight on your top performers through recognition in company newsletters, social media, or at annual events can provide a significant motivational boost. Celebrating their achievements in a public forum enhances their sense of pride and accomplishment. Everyone loves to be acknowledged, and this type of recognition can really lift spirits and encourage others to aim high.

  Exclusive workshops and masterclasses

Offering exclusive access to workshops or masterclasses with renowned experts can be an exhilarating reward. Imagine the motivational boost when your top performers get the chance 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 while delivering a fantastic team-building experience.

  Adventure experiences

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

  Tech toys and gadgets

From the latest smartwatches to drones, offering cutting-edge technology as a reward can spark a tech enthusiasm that cash incentives often can’t match. It’s a fun way to keep your team updated with the latest trends and gadgets, fuelling their tech-savvy souls and making them feel valued for their interests.

  Relaxation and personal development retreats

A rewarding experience that combines relaxation with personal growth can be hugely beneficial. Retreats focused on mindfulness, wellness, or creativity offer a much-needed break from the digital overload and the fast-paced sales environment. These retreats allow your team members to reconnect with themselves and return refreshed, ready to tackle new challenges with renewed energy.

  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 you 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.

Ultimately, integrating SPIFFs alongside traditional commissions allows you to strike a delicate balance between long-term growth and short-term objectives. This ensures a sales force that is not only consistent but also capable of extraordinary bursts of achievement when it counts the most!