Sales spiffs: Definition, benefits and strategies

Keeping your sales team motivated and focused is a real challenge. Relying on commissions and bonuses tied to long-term targets isn’t always enough. Sales managers need better tools to unite their teams around urgent priorities.

Sales spiff programs provide the perfect short-term incentive to drive behaviors and achieve immediate goals. A well-designed spiff can encourage good sales habits, increase healthy competition and boost performance.

In this article, we’ll learn what a sales spiff is, best practices for a successful spiff and how to implement a program that gets meaningful results.

What is a spiff in sales?

A spiff (sometimes also referred to as a “spif” or a “spiv”) is a short-term incentive offered to salespeople as a reward for meeting specific objectives.

The acronym “spiff” has several meanings:

• Sales performance incentive fund

• Sales program incentive fund

• Sales promotion incentive fund

• Sales performance incentive fund

Sales managers typically use spiffs to increase sales of a specific product. For example, you could use a sales spiff to promote a new service or clear out old inventory.

You can also tie sales spiffs to other positive actions or behaviors, like making a certain number of calls or booking more sales demos.

According to the Oxford English Dictionary, the term dates back to 1891, with spiff meaning “to allow a certain sum as commission on (an article)”. For today’s sales teams, a spiff and commission both act as incentives for salespeople, but they serve different purposes.

A commission is a type of sales compensation plan that’s usually based on a percentage of sales and is a regular, expected part of a salesperson’s earnings. In contrast, a spiff is a one-time bonus offered for selling specific products or achieving certain short-term goals – not necessarily overall sales.

Sales commissions reward consistent performance, while spiffs target specific and immediate behaviors. Together, they motivate sales representatives in both the short and long term. Spiffs ultimately complement existing commission plans without replacing them.

There are two main categories of sales spiff:

• Cash spiffs. A direct monetary reward for the sales rep to use as they choose. For instance, a company might offer a sales rep an extra $50 for every premium subscription they sell during a weeklong promotion.

• Non-cash spiffs. Rewards like gift cards, merchandise, experiences or some other form of recognition. For example, you might reward a sales team with concert tickets if they acquire a particular high-value client.

These short-term incentives are strategic tools that can shape the trajectory of sales performance and team dynamics.

What are the benefits of sales spiffs?

When implemented correctly, sales spiff programs offer many benefits for both the individual salesperson and the organization as a whole.

An immediate motivation boost

Unlike other incentives tied to quarterly or annual performance, spiffs provide an instant bonus for a job well done. A sales spiff spurs reps into action, especially during slow periods or when the next quarter seems a long way away.

When your sales team sees a direct link between their performance and an immediate reward, they’re more motivated. In turn, the prospect of earning a bonus can boost morale, increase job satisfaction and lower turnover rates.

More healthy competition

Sales spiffs introduce a fun, friendly sense of competition into your team’s daily activities. Well-designed contests, bonuses and rewards tied to spiffs motivate reps to compete and see who can reach the specified goals or metrics first.

The heightened sense of competition can foster an energetic and dynamic sales environment, with each person driven to do their best. When everyone can see where they stand compared to their peers in real time, reps are more likely to put in extra time and effort.

Enhanced focus

Sales managers can use spiffs to encourage actions beyond selling. By choosing spiffs that align with the company’s current objectives, managers focus the sales team on specific products or other activities.

For example, a spiff might incentivize promoting a particular product, acquiring leads before a deadline or selling to a certain customer segment – something that’s harder to achieve with broader sales compensation plans.

Flexible reward scheme

Not all achievements fit neatly into the regular commission structure. For instance, how do you reward a sales rep who goes above and beyond in customer service, even if that doesn’t immediately translate to a sale?

Spiffs provide the flexibility to reward these behaviors and recognize your team’s positive actions. This adaptability encourages reps to explore different approaches to sales, enhancing the overall performance of the team.

Regular compensation structures are the foundation for sales motivation, but spiffs build on that by giving your team energy and focus. As a strategic tool, spiffs drive sales and foster a motivated, high-performing workforce.

Designing a successful spiff program, step by step

Creating an effective spiff program takes careful planning and execution. Follow these steps to see the benefits of spiffs in your sales organization.

1. Define clear objectives

Start by identifying one or two short-term sales goals that need an extra boost, taking into account the broader business objectives. When your spiff program aligns with those goals, your strategy will stay consistent and you won’t confuse your team.

What do you want to achieve with your spiff program? Is it to showcase a new product? Boost sales during a slow period? Encourage your team to try a new sales method? Whatever you’re trying to achieve, your objectives will guide the rest of the program’s design.

2. Select the right rewards

If you want your spiff to provide a good incentive, you need to think about the reward. What will motivate the team? What can you afford?

For example, a new car would be a strong spiff incentive, though very few sales teams will have that kind of budget. But a mug with “World’s Best Salesperson” as a reward for landing a million-dollar contract is more likely to be an insult than an incentive.

For larger teams, consider having different reward levels based on performance. The tiered system caters to both top performers and those who are improving, which means more reps can get involved.

3. Determine your eligibility criteria

Decide who you’ll allow to participate in the spiff program. Will all sales reps be able to take part, or will you limit it to specific teams or experience levels? While it might initially seem like it’s best to have as many reps involved as possible, your eligibility criteria must align with your goals.

For example, if you’re trying to improve your lead generation, it makes sense to include all your sales development reps (SDRs) in the spiff. However, you wouldn’t want to distract your account executives and other people expressly hired to close deals with extra lead generation tasks. Your goals need to align with the participant’s responsibilities.

4. Decide on your timeframe

Define when your spiff program will start and finish. Spiffs are short-term incentives, so aim for a duration of a few weeks to a couple of months. A shorter period will likely limit the impact of the spiff program; longer durations risk losing momentum.

Consider tying the timeframe to key events or goals. For example, offer spiffs for two weeks leading up to the end of the quarter for a final push or run the spiff alongside a new product launch to maximize its effectiveness.

5. Communicate program terms clearly

Explain to your sales reps how the spiff will work. Participating reps need to understand every aspect of the program, including goals, eligibility, timeline and rewards. A kickoff meeting can serve as a valuable platform to introduce the spiff program, answer questions and generate excitement among the team.

Once you start the spiff, update participants regularly on their performance, standings and any changes to the program. A weekly or biweekly check-in gives you a chance to see how the team is progressing and address any concerns or challenges.

6. Celebrate

Once the spiff program concludes, distribute the rewards promptly and celebrate the entire sales team’s achievements. Hosting an event that recognizes your sales reps’ hard work fosters a sense of community and shared success.

Encourage the winners to share their techniques and strategies with the rest of the team. If anyone struggled, use this opportunity to offer personalized, constructive feedback. By valuing and acknowledging every team member’s efforts (not the results alone), you can build a positive, motivating and inclusive work environment.

7. Review and optimize

Keep a detailed record of the spiff program, including its design, outcomes and feedback. Review your results and ask yourself questions like:

• Were there any unexpected challenges?

• Did you achieve your objectives?

• What worked well?

• What could you do better?

The review can serve as a reference for future spiff programs while improving performance.

Best practices for sales spiff programs

Designing and executing a successful sales spiff program takes thoughtful planning and consideration. Follow these best practices to ensure your sales incentive program motivates reps and gets meaningful results.

Get input from your sales team

Your sales reps are the ones who you’re trying to motivate with a spiff, so involve them at every step.

In the planning stage, ask them about their strengths and weaknesses. What would be a reasonable sales goal? What types of rewards would motivate them to reach that goal?

By involving them from the beginning, you can not only get their buy-in but also tailor the program to their needs and preferences.

After the program concludes, check in with the team and ask for feedback. How did the spiff impact their work? Was the program clear or did any part of it confuse them? Was the program over too quickly or did it drag?

This feedback can give you valuable insights to use in future spiff programs.

Track your spiff program with a CRM

Modern customer relationship management (CRM) software like Pipedrive has features that make it ideal for managing your spiff programs. By using your CRM to track any metrics tied to the spiff, you reduce the risk of error while providing real-time updates to the sales team. That makes the process more transparent.

Leveraging a CRM also enables you to pull reports easily and analyze performance data from the spiff program once it wraps up. You can identify trends around which reps responded most actively to the incentives or how different reward structures drove behaviors.

The insights and reports collected in your CRM provide an invaluable starting point for fine-tuning and optimizing your spiff initiatives.

Offer a mix of rewards

Cash might be a universal motivator, but sometimes non-cash rewards are more impactful. With a diverse reward system, you can cater to your sales team’s different preferences.

For example, one sales rep may want more coaching and training opportunities, while another might appreciate some extra time off to spend with their family.

When sales reps can select rewards that are personally meaningful and fulfilling, they’ll have more motivation to participate in the spiff. This tailored approach enhances the perceived value of the rewards and creates a sense of appreciation and job satisfaction in the team.

Keep it fair

Put procedures in place to guarantee impartiality. For example, use concrete sales metrics rather than subjective assessments to track progress. Additionally, consider implementing a mechanism for resolving disputes or clarifying ambiguities in the program rules.

If some sales reps feel the spiff program favors certain individuals or teams, that will decrease motivation and lead to resentment. Being completely transparent about how you run the program builds trust, so more people are likely to participate.

It might mean extra work up front, but these practical steps help keep the spiff program fair and improve team morale.

Test things out with a pilot program

Before launching a company-wide spiff program, consider piloting it with a smaller group. A pilot program allows you to test the mechanics, gather initial feedback and make any necessary changes before a full rollout.

Look at the pilot as an opportunity to experiment. Try different incentive structures, rewards, metrics and communication methods. The goal is to optimize program design based on real data and user experiences. With evidence from the pilot that the program drives results, you can scale across the sales organization with confidence.

Potential sales spiff pitfalls and how to avoid them

Spiff programs can be powerful motivators, but they can also introduce unexpected issues. Here are some potential pitfalls, along with tips on how to avoid them.

Focusing on individuals at the expense of teamwork

A bit of friendly competition can be a strong motivator, but it can turn into conflict if it’s not managed properly. Spiffs focused on individual performance might discourage teamwork, leading to an environment where team members are reluctant to work together.

Design your spiff programs so they reward both individual and team achievements. For example, offer bonuses for the best-performing teams or for collaborative efforts that lead to significant sales. Include team-based spiff goals to incentivize helping teammates succeed.

Encouraging the wrong behaviors

Spiffs are versatile tools that you can personalize to the sales team and the business, but you need to think carefully about the message you’re giving teams.

For example, sales reps might focus exclusively on the products or services with spiffs, neglecting other equally important offers. Reps might even end up prioritizing spiff goals over long-term customer relationships.

Keep a balanced view by rotating the products or services you promote with spiffs. Ensure your rewards support overall business strategy while always keeping your customers as the priority.

Sandbagging sales

Sales spiffs can drive a short-term burst of activity, but they can also backfire if sales reps know in advance when a spiff will happen.

For example, sales reps might delay closing deals that are already in progress until a spiff program launches so they can increase their chances of winning first place. By unintentionally encouraging reps to wait until the spiff is active, you’ll see dips and spikes in sales performance data that don’t reflect actual trends.

Prevent sandbagging by announcing spiff programs spontaneously, without following an obvious pattern. Track sales data around spiff launches and have candid discussions with reps about ethics if unusual patterns emerge.

Overcomplicating the program

It’s easy to get carried away when designing a spiff program, adding different rules and criteria as you try to fine-tune your results. Unfortunately, a complex program with too many rules and conditions can confuse sales reps and reduce participation.

Keep the spiff program as simple and transparent as possible, with straightforward objectives, metrics, rules and payout criteria. Check with your sales team often to get their feedback and address any confusion early on in the process.

By being aware of these potential pitfalls and addressing them proactively, businesses can ensure their spiff programs are both effective and friendly. That way, they’ll drive sales without introducing unintended challenges.

Final thoughts

View spiff programs as part of a broader sales incentive ecosystem. While spiffs address immediate goals, they also complement long-term compensation plans, team-building initiatives and training programs. The holistic development of a sales team is the ultimate goal, where everyone feels valued, motivated and equipped with the right tools.

By keeping a pulse on team feedback, monitoring sales patterns, and staying updated with industry best practices, managers can ensure their incentive strategies remain relevant and effective.