Since the mid-19th century, Spiff programs (Special Payment Incentive for Fast Sales) have been a staple in corporate engagement—widely regarded as the most popular and effective form of incentives that are used in modern business.
Unlike other incentive programs that can be on the confusing side, Spiff programs are simple to understand and—for the most part—don’t intimate sales personnel to disengage from reward-based opportunities due to eligibility complexities.
1.) What’s the Point?
Like most things in life, maintaining solid organization, blueprinting strategies, and brainstorming objectives are a key component to seeing something/anything become successful.
Diving headfirst by deploying spiffs for channel partners without a clear direction or tangible objectives in place is a recipe for disaster.
Sure, this process may seem obvious, perhaps even rhetorical. However, there is a sheer level of spiff programs without a framework of defined goals. For example, what themes matter most to the success of your business; what you’re trying to achieve:
- Enter diversified vertical markets?
- Improve partner transparency and longevity via reward?
- Minimize partners’ DSO (Days Sales Outstanding) percentage?
- Increase the level of accounts receivable?
- Bring lucidity into the indirect sales funnel?
- Advance partner training/ customer service for end-customers?
- Acquire higher market value?
Although it’s important to have clearly defined objectives, it’s also imperative that you don’t overbook yourself with too many goals. Limit your strategy’s focus on three or less tangible objectives.
2.) Put Yourself in Their Shoes
Through my experience, stepping into the mind of partners is one of the most effective strategies in stimulating motivation regarding spiff program engagement. If you were on the other end of the spectrum, what sorts of incentives would capture your interest? Remember, although every individual on this planet is different, we all share an eerily similar reward system. So, if you wouldn’t participate in an incentive, chances are most others won’t.
3.) Aim for the Mediocre
In the channel, divide your channel partners based on best, average and worst sales performers.
Once divided, customize your spiff programs so that it is targeted towards the average or middle performers. You would think this strategy is counterintuitive since deploying spiffs for top performers would mitigate the least risk. However, those partners don’t need the added incentive. You should be applying your energy to the middle demographic, as there is room for them to improve. Thus, increasing the stream of revenue throughout your entire sales funnel.
4.) Objectives Program Parameters
Ambiguous eligibility requirements and subjective program guidelines are the two biggest factors that contribute to the failure of spiff programs. Therefore, design a program that is objectively structured. Meaning, your program should paint a black and white image that leaves little to no room for interpretation.
Examples of FAQs:
→ Program Structure
- Unrestricted Programs — Eligibility for reward(s) applies to all partners who achieve the required objectives.
- Restricted Programs — Only a selective group of partners or sales personnel can obtain rewards based on a pre-determined quantity of winners.
- Phase Programs — Rewards are allocated at different stages of the selling process; for example, a reward for acquiring a lead without conversion.
- Some vendors yearn to see immediate results and often design the window of spiff program eligibility too small to participate. Conversely, some vendors are less conservative on immediate results and hope to see long-term engagement. This is a good strategy for motivating partners to not participate, as the longer, they wait, the less enticing the incentive becomes.
- An incentive that is irrelevant to the industry, fails to eradicate potential pain points or doesn’t offer a juicy enough reward (disregarding relevance) will surely limit partner engagement. Potential incentives include cash, in-house equipment sporting events, concerts, funds for marketing, references, testimonials, merchandise, travel airfare, etc.