Last week, Erik Charles presented a webinar on SPIFs and gave listeners the run down on everything related to Special Performance Incentive Funds. You can find the webinar recording here. So what’s the origin of these magically motivating incentives? Special Performance Incentive Funds go all the way back to 1859 when Wholesalers used them to motivate sales people. Since then, the use of SPIFs has continued, increased, and improved. Today, we still use SPIFs to drive performance and help our sales people sell more efficiently. SPIFs can be incredibly motivational, especially in the face of changes within your company due to outside influences. For example, when the Brexit vote happened, that became some reps' excuse for why they weren't closing deals. Adding a SPIF during a similar slump can get your sales force back on track. Alternatively, you might be coming out with a new product, and you need to get rid of old products. Remember, SPIFs are to help you increase how nimble your company is. They are to be used after you already have your plans built and communicated and you’re looking for a little something extra that will get that new product out there and drive business now.
4 Times a SPIF might be in Order:
Pulling pipeline forwards Summer is sometimes a slow-down for sales, as many people are on vacation. So it can be a good idea to incentivize reps that are pulling deals in August. Adding a new service Test the marketplace when you’re putting out a new service. Don’t just expect sales reps to sell it, you have to add money behind it if you want your reps to do something different than they’ve always done. Offset competitive financial schedules You know competition is going to be fighting twice as hard as your guys, because it’s their quarter end. That's where implementing a SPIF comes in. This will help ensure that your reps are just as motivated as the competition. A “false close” and short-frame challenge within a small window will keep reps hungry. Get Sales to embrace a new tool Reps sometimes get upset about adopting new technology, but if you incentivize them to make sure their pipeline is accurate, take the hour training for the new product, and enter their pertinent data it’s a win win. Executives will get the visibility they need, the company will have increased data accuracy, and reps will understand the value of the new solution.
Different Types of SPIFs
- Spot bonus-fixed amount
- Double Club credit
- Double quota retirement or accelerator
- Mini-club (weekend getaways)
- Tech Gadgets (Apple Watch, iPad, laptop)
- Gift Cards
- Bottle of wine
Another SPIF Consideration: How much are they costing you?
To be able to figure this out, you need to have an analytics solution that will let you know how much the SPIF changed your total revenue. Knowing the true cost of a sale can be challenging, so companies that use Xactly Insights already have an advantage. That's because these companies can quickly glance at reports to see if their SPIF drove the right performance, and how much it really cost them.
The Golden Rule of SPIFs
If people have no control over the outcome, the SPIF is bad. If people can take quick action and make a change, than the SPIF is good! If you throw one out that sales people can’t control it can be very demoralizing.
The Don'ts of SPIFs
- Don't Over-SPIF
- Don't become 'SPIFs R Us'
- Do not be predictable
- Do not make the SPIFs more important than the Incentive plan
- Beware of 'gamers' looking for loopholes in your plan
Have any remaining questions? Tweet @erikchaz or @Xactly!