What’s a SPIFF Program – Definition, Examples, When to Use, Dos and Don’ts

by | Sep 7, 2022

What is a SPIFF?

A spiff, or Sales Performance Incentive Fund, is a type of cash incentive that motivates salespeople to promote a certain product or assortment of products. The word “bonus” is frequently substituted for this phrase. Vendors and employers frequently use the spiff to launch new products into the market or boost sales within a predetermined time frame. The inducement could take the form of a bonus or rebate in cash or a gift like a trip, a car, or a club membership. The term’s origin is unclear, but it is usually believed to have something to do with the slang expression “spiffed up,” which means to improve something’s appearance. Sales Performance Incentive Fund can occasionally also be written as spiff.

Different forms of Sales Performance Incentive Fund are possible. For instance, you could give a team or person a reward once they sell a certain amount of merchandise. Or you may start an incentive scheme to encourage the release of a product. Some businesses even employ it to bolster poor performance or enhance certain financial measures. Sales Performance Incentive Fund initiatives therefore aid in accelerating the sales pipeline by inspiring salespeople.

Examples of SPIFF

What’s a SPIFF Program – Definition, Examples, When to Use, Dos and Don’ts

1. Cash Spiff

Because victors can instantly receive their incentives, cash is a perennially popular option. However, because there are better options available, actual cash isn’t as popular as it previously was. It is simpler to use prepaid cards online. They provide certain benefits for your company as well. You may receive a discount off the face value of prepaid cards by purchasing them in quantity. Cash and paper checks are susceptible to theft and fraud, which might empty the checking account of your company. A digital card allows for fast delivery and online verification. You can collaborate with other companies to receive cards for less money. It will benefit both management and employees in this case. Use of prepaid cards might be a better option.

2. Travel and Entertainment

It is unlikely that employees will spend money on leisure and tourism. They might still want to travel and have fun, though. Weekend getaways or quick trips to the movies or sporting activities are excellent choices for Sales Performance Incentive Fund programmes. These choices will provide them with a leisurely break from work.

3. Offsite Activities

Employees can go to the spa or play sports of their choice. Plan your programmes based on what your employees say they would want. Keep a variety of options available as not everyone will choose the same thing.

4. Creating too many Commissionable Events

The range of subscription services includes everything from reading clubs to gym memberships. Even subscriptions to websites that deliver food or allow for online shopping are options. It is a fantastic approach to motivate workers to pursue their passions outside of the workplace.

When to Use SPIFF?

When to use Spiff

1. To Incentivize Engagement

For many organizations, employee disengagement is a real worry. It can be challenging to keep workers engaged and productive, but Sales Performance Incentive Funds are one way to deal with this problem because spiff encourages engagement. They are known to promote employee engagement and support dynamic, competitive work environments.

2. To Acquire New Accounts

Sales Performance Incentive Fund should not be the mainstay of your sales incentive programme. You don’t want to take your reps’ attention away from crucial objectives based on, say, total gross revenue. Spiff, however, can aid in achieving supplementary objectives like increasing customer signups.

3. To Meet Immediate Sales Needs

Sales Performance Incentive Fund are made to help improve in quickly achieving or exceeding the sales targets. A really well-designed spiff can be the best option for your company if you want to see your agents swiftly reach their sales quota.

4. To Push Deal Renewals Forward

Reps frequently move on to fresh opportunities once a contract has been finalized with a customer. Renewals, however, are crucial for companies that rely on subscriptions. Your reps may be able to concentrate more on customer retention if you include Sales Performance Incentive Fund based on renewals. When a quarterly or annual deadline is approaching, as well as during the off-season when sales experience a yearly slowdown, spiff can be useful in encouraging salespeople to move deals along the pipeline and achieve progress

5. To Fix Quotas

Correct quota setup necessitates precise forecasting, which might be difficult. Organizations have the option of lowering quotas when they are set excessively high. This isn’t always the ideal choice, though, as it gives the impression that commissions are assured regardless of performance. Spiff can be used to bridge the gap created by inaccurate quotas for this purpose.

6. To Support a New Launch

It’s crucial to plan a new product or service launch that is successful. When sales representatives are evaluating new prospects or trying to upsell existing customers, the Sales Performance Incentive Fund can be useful for keeping the new offerings in the forefront of their minds.

7. To Boost Poor Sales Numbers

In a last-ditch effort to hit the numbers, often at any cost, Sales Performance Incentive Fund are most frequently used to assist push meet or exceed faltering sales goals. When sales are down, they occasionally need to be put into place to improve performance. By incorporating highly motivating short-term incentives into the current sales compensation plan to guarantee targets are fulfilled, spiff can improve sales performance.

Tips for Implementing SPIFF: Dos and Don’ts

Sales Performance Incentive Fund initiatives can be advantageous to both the business and the workforce. But not every business would implement it in the same way. Planning and research are needed. Setting quantifiable objectives is also necessary. If you comprehend the subsequent elements, you can do it correctly:

1. Do- Understand and Define your Goals

You should be crystal clear about what you need from your sales team and the actual spiff. Once you are aware of your goals, make sure your salespeople are fully aware of them. whatever it is that you want to do. Your reps need to be fully aware of your goals in order to stay on task and focus on what’s best for your company, whether you want to increase sales, complete more transactions, market a new product, or do something else entirely. The target includes an exact, reachable number that can be used as a gauge for how effectively your spiff is doing.

2. Don’t- Let the Limited Visibility Limit the Impact of Spiff

Excel spreadsheet management breaks how motivating Sales Performance Incentive Fund are for your sales staff. Reps won’t be continuously motivated to chase the Sales Performance Incentive Fund if they can’t immediately see how they’re advancing in that direction. Since spiffs are frequently paid out at the conclusion of a predetermined time, the majority of reps won’t learn how much progress they’ve achieved toward the target until the promotion’s finish. Naturally, a lack of visibility in a Sales Performance Incentive Fund programme causes sales staff to waste time developing their own spreadsheets to measure progress (shadow accounting) rather than following leads and closing agreements. When spiffs are included in long-term sales incentive programmes, they significantly increase ROI in a dependable, quantifiable manner.

3. Do- Know Your Audience

The ability to quickly customize short-term rewards for both people and organizations is one of their biggest advantages. Use your data to identify the Sales Performance Incentive Fund types that have previously been successful and those that are most likely to succeed going forward. The performance of various spiffs as a component of your entire sales compensation plan can then be predicted using intelligent compensation software.

4. Don’t- Let SPIFF Disturb your Budget

Sales Performance Incentive Funds are fantastic for sales in moderation, but there’s a reason they may only be used for brief periods of time. When it comes to your Sales Performance Incentive Fund success, timing is crucial. These rewards are intended to increase sales temporarily. As a result, they shouldn’t be applied continuously to boost performance. If your company uses too many spiffs, the employee engagement they provide may start to fade and coordination of numerous Sales Performance Incentive Funds may become expensive. The incentives can be employed when sales representatives start to anticipate receiving spiff at the conclusion of each quarter or year. By rarely introducing spiff so that sellers aren’t expecting them, you can keep your plan “gameable”. Sales Performance Incentive Fund should be kept uncommon, usually no more than 12 per year.

Ready, Steady, SPIFF!

It’s possible that using a spiff programme is the standard method of conducting business in the regions you sell to or desire to sell to. Do your research before adopting them. Although generating sales is crucial, are you equipped to properly set them up and run a spiff? In the end, it comes down to ethics and perception more than gains and losses. How do you want your reps to view you, your business, and your other salespeople? You must begin developing a strategy that will assist align goals inside your organization if you want to take full advantage of all the opportunities that a Sales Performance Incentive Fund programme can offer. Although motivating sales teams might be challenging, your business can succeed with a little bit of attention.


1. Why is it called a spiff?

A spiff is a unique scheme that awards cash bonuses for exceeding sales targets. Nobody is certain where the word came from, but it was first recorded in a slang dictionary in 1859.

2. Is spiff illegal?

For the majority of sales sectors, spiffs are not prohibited. If they are not applied or used properly, they might cause ethical issues. spiff, however, are only regarded as unlawful for government purchases because it is impossible to determine whether the salesman is objective when recommending things to the government.

3. Is spiff capitalized or not?

To avoid confusion with the word “spiff,” which means to spruce up or clean up, spiff is most frequently written in all caps. To avoid giving the impression that we are shouting spiff at you every minute of your reading, we purposefully chose not to capitalize the word in many instances. We are nice people, aren’t we?

4. Is there a difference between a spiff and a SPIV?

No, the words spiff, SPIV, and Sales Performance Incentive Fundall refer to the same class of sales incentive programmes.

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