One of the first-known references to the term “spiff” occurred in an 1859 dictionary of British slang, which defined a spiff as a reward given by retailers to salespeople who successfully sold old-fashioned or undesirable products. This concept of an additional award for selling extra goods and services has evolved into our modern notion of spiffs and other sales incentives.
Sales incentive programs are usually an attempt to increase a certain sales activity (e.g. prospecting, appointment setting). They might also be used to promote a specific product, service or event; develop a vertical market; or acquire new accounts. However, without careful planning and consideration, sales incentive programs often end up having no effect on sales performance, over- or under-rewarding reps, or actually causing conflict with the desired sales behavior. Here are eight keys to a successful incentive program:
Sales incentive programs should be carefully designed to encourage, recognize and reward extra effort. They should not be used as a quick fix for bad processes, product deficiencies, gaps in the commission plan, or broad issues impacting sales performance (e.g. skill deficits, lack of training). Use the eight factors above to analyze and design an incentive program – before you start spending extra money on rewards that might have a negative effect.
Steve Silver is a Senior Research Director of Sales Operations Strategies at SiriusDecisions. Steve brings with him more than 20 years of executive-level experience spanning sales operations, sales and product marketing. Follow Steve on Twitter @jstevensilver.