Post

The Good and the Bad Side of SPIF-ing the Sales Team

3 min read

The first SPIF (Sales Performance Incentive Fund) I was ever offered was a free 10 minutes of long distance phone time (back when that was a costly proposition). I was making calls for the Stanford endowment fund, and the floor lead said that whoever could get the next donation logged would be allowed to make a call to family for 10 minutes using the school’s account. I cherry-picked the next call, picked up a donation, and called an old girlfriend. Moral of this story? SPIFs work. They serve to either create an urgency, in this case to get another donor. Or a focus, to sell a particular product. They can also serve as a field experiment in unintended consequences à la the Nike SPIF. Let us consider the case of Sergey Bubka and the world pole vault record. I am an avid reader of Reddit’s “Today I Learned” forum, and it was there that I found out about Sergey and his Nike sponsorship bonus. As The Guardian reported, Sergey broke the world pole vault record for the first time in 1984. After that he spent a decade slowly increasing his performance in small, yet measurable increments. Perhaps it was the bonus from his sponsor Nike that was driving this performance. Nike supposedly offered a bonus to Sergey for each record he broke (rumored to be as much as $100,000 for each increment). This might have been the factor that helped drive a man to constantly strive to beat his own record repeatedly, going so far as to break the numbers 14 separate times from 1991 to 1993. The impact of an incentive is sometimes hard to separate from the innate drive that many have to simply win. However, we have to wonder if Sergey would have been as driven to break the world record for pole vault a total of 35 times without the additional payment from Nike to keep him going. The follow-on question might be that he would have gone for larger incremental improvements if he had been incented to only chase the smallest measurable win, absent a competitor keeping him on his toes and over the bar. Want to find out more about how to increase sales productivity? Here are a few ideas.