Your sales commission structure is your primary motivation tool, but there are several different types of sales incentives you can use to further encourage your team. One of the most popular ways to motivate sales reps is a Special Performance Incentive Fund, also known as a SPIF.
But, when it comes to SPIFs, should you offer cash or non-cash incentives? And how can you keep engagement high when the outside world is creating additional stress and constantly changing?
SPIFs as Sales Incentive Tool
Special Performance Incentive Funds (SPIFs) are a great way to push results and encourage your sales team to strive for higher performance, especially during slower times throughout the year. In fact, research from the Aberdeen Group shows that more than 50 percent of best-in-class companies see increased profits through the use of SPIFs.
The trick is knowing how to use SPIFs correctly to motivate reps and identifying which sales incentives to use to drive specific sales behaviors. They can be used to reach any specific goal, big or small. If you need a productivity boost for any reason, whether it's a summer slowdown or even the beginning of a quarter, a SPIF is a great way to motivate reps and push for increased performance. However, far too often simple missteps can result in poorly-designed, ineffective planning.
Here are a few things to keep in mind and avoid in order to use SPIFs successfully:
1. Know Your Goal
Your sales team needs to understand what the SPIF is actually trying to accomplish. For example, is the goal to increase sales of a certain product or close more deals in the first half of the month? Be specific about what the incentive’s purpose is and focus on making sure it drives the behavior(s) that will lead to achieving that goal.
2. Spontaneity is Key
SPIFs that fall on the same week or month year after year can easily be predicted. If your sales incentives become too predictable, it can result in reps holding back during non-SPIF times in order to reap the ultimate benefit once the SPIF window opens. A key thing to remember is that SPIFs perform best when used in moderation and when they are unexpected. That way reps strive for performance all of the time and really go the extra mile when a SPIF is introduced.
3. Set a Clear Timeframe
Well-designed SPIFs should give reps a clear timeframe to change their behaviors and selling strategies. Balance is key here. You should give reps enough time to reap the benefits of the SPIF, but not long enough that it becomes part of the everyday sales routine. Knowing this will allow you to better measure the impact of your SPIF, and ultimately make more strategic decisions.
4. Keep SPIFs Simple
Simplicity in sales incentives is key. When they become too complex, it can be confusing and difficult for reps to prioritize their actions. Clear, concise SPIFs should align with rep actions and provide a pathway for reps to follow. Sales reps should be able to easily see that if they do or sell X, they’ll be rewarded with Y.
5. Be as Specific as Possible
Sales incentive simplicity is key, but SPIFs aren't effective if they're too vague. You need to be able to quickly launch short-term sales incentives, but you also want to ensure the rewards you're offering are compelling. Benchmark against previous years' data and use predictive modeling to determine potential outcomes this time around. Also, make sure your sales team is structured properly in order to maximize performance.
6. Analyze the Outcome
Once the SPIF is completed, you need to compare the actual results to those you predicted at launch. If your SPIF didn’t end up driving the desired behavior, use your data to figure out why. Then use those insights to inform your next SPIF, as well as your overall sales compensation planning.
Cash vs. Non-Cash Sales Incentives
With your SPIF planned, the question then becomes what should the sales incentive be? At the very basic level, these fall into two categories—cash and non-cash incentives. When used effectively, both can be extremely effective as a part of a SPIF.
If money wasn't an appealing sales incentive, it wouldn't be the basis of commissions and incentive compensation. At the end of the day, money is always a motivator. When it comes to SPIFs and rewards outside of your primary compensation plan, the main goal is to ensure that the monetary incentive is compelling and motivates sales reps to focus on a specific goal.
Many times, cash sales incentives are a set amount. For example, consider your team tends to close most of their deals at the end of the month or quarter. You might create a SPIF where reps earn a $1,000 bonus for each additional unit of a specific product sold before the 15th of the month or in the first month of the quarter.
On the other hand, non-cash rewards allow for more creativity in the incentive process. In fact, some companies may find that non-cash rewards, such as sporting event tickets, travel vouchers, or team dinners might be more effective than traditional cash incentives. (You can read more about the benefits of non-cash rewards here.)
Sales Incentive Ideas
If you decide to forego cash-based motivation, the next step is to determine WHAT creative, non-cash sales team incentives you can offer to motivate and engage your team. Traditionally, this list would include in-person activities and events, such as fine dining experiences, concert tickets, or sporting events.
Below are 10 sales incentive ideas that you can use in any situation to motivate and engage your sales team.
1. Gift Cards
These are probably the most common non-cash incentives. While gift cards are still technically monetary incentives, they give reps a physical prize to strive for. You can add a little more creativity to this incentive by giving reps the freedom to select the gift card they want.
2. Food Delivery Credit
With in-person dining becoming a bit more difficult this year, food delivery services have become increasingly popular. Offering your team a credit to UberEats or Postmates can be an enticing option for those looking for a break from cooking and pickup.
3. Subscription to a Streaming Service
Again, with many in-person activities being postponed, a temporary subscription to a streaming service, such as HBOGo, Disney+, or even Spotify, can be a new way to reward employees. Even if many already have the subscription themselves, a credit for a few free months can be a nice bonus.
4. Tech Gadgets
Popular tech gadgets, such as tablets and smart watches make great incentives—especially as personal fitness has gained momentum this year. Between Apple, Samsung, and FitBit, there are plenty of options for your team to choose from to pair with their smart device.
5. Wine Club Membership
Have a wine lover on your team? How about a beer lover? Actually, these days, you can probably find a subscription service for any interest. Take inventory of your team's likes (and dislikes) and see if you can't find the perfect match.
6. Subscription Boxes
Like a wine club membership, there are subscription services like HelloFresh, Book of the Month, Stitch Fix, and almost anything else you can think of. You could offer reps a 6-month or year-long subscription. Again, you can personalize this to the rep's choice, allowing them to take in some personal hobby time outside the office.
7. A Gym Membership
Many of today's employees strive for a healthy work-life balance, which often includes a way to get out, exercise, and be healthy. Offering your reps a gym membership, whether it's the gym down the road, or a subscription service like Class Pass or Orange Theory, you're encouraging your team to get out and be active.
8. Learning Opportunities
Many companies provide opportunities for employees to attend classes, seminars, etc. to learn more about their specific craft or even a skill outside of their job role. This year, it’s even easier to find sessions to attend as many conferences and development programs have gone virtual.
9. Self-Care Services
Many of today's employees strive for a healthy work-life balance, which often includes a way to get out, exercise, and focus on their mental health. Offering your reps a subscription to a platform like Grokker or the Calm App can help them relax, refuel, and focus on themselves as a reward for all of their hard work.
10. Employee’s Choice
Think about your primary goal here—to motivate your sales team to work harder and smarter on their way to closing more deals. With that being case, why not just give them their choice of perks, within reason, of course! Platforms like Snappy allow you to pre-select a large variety of gifts (e.g., Kitchenaid Mixer, Bluetooth speakers, subscriptions, etc.) for your team to choose from.
Motivating Sales to Succeed
Sales as we know it has changed forever. As a result, we need to also shift the way we think about motivating and engaging sales reps. That means, taking a hard look at how leaders coach their teams and plan for the future and reinventing strategies to motivate and engage sales reps in an ever-changing world.
Discover everything you need to know about the new sales era and why Sales Performance Management (SPM) is crucial to surviving it in our “Enterprise Leader’s Guide to Success in the New Revenue Era”.