Sales Performance Management Best Practices Blog

Five key steps in putting together a world class SPIF / SPIFF program

Posted by Jerry Hegarty on Wed, Jun 19, 2013 @ 11:06 AM

SPIF(F)’s - Sales Performance Incentive Funds - are a tremendous tool to motivate and reward certain kinds of sales performance. Aberdeen Group noted in some recent research that the majority of best in class companies credit some of their sales performance success to special sales incentives such as SPIF’s.

While intended to be more tactical (spending on SPIFs is typically capped at 5-8% of your sales incentive budget) than the measures that make up your core sales commission plan; activities such as:

  • kick starting new product introductions,
  • selling off excess inSPIFF Graphicventory of target products at the end of their life cycle
  • new logo wins

…. are prime candidates for SPIF programs.

Like most things in life, if SPIF's are going to be successful and something you want to be able to pull from your tool box and repeatedly execute in a world class fashion, it is best to document the process and use this as the starting point for ongoing refinements so it becomes a competitive strength of your organization. The following Tried & True methodology is intended to provide you with a framework to build of any SPIF program;

  1. Be able to succinctly answer the question, “What am I hoping to accomplish with this program?” This is one of the most important steps in the process but often overlooked in everyone’s haste and belief that they know the answer to the question before thinking it through. Ignoring this step often results in SPIF’s being used incorrectly such as to cover for plan design flaws (i.e. no one is hitting targets this quarter so let’s do something quick). Examples include:
  • Our DSO has grown 20% over the last quarter and is causing cash flow issues.
  • With a new product platform being introduced this quarter, we want to be sure we will not have any excess old inventory to write down.
  • Once you know what you’re trying to accomplish, then get the team together to brainstorm short term programs and associated rewards that can positively impact the situation you’ve clearly identified during question one. Examples include;
    • Reward the sales region with the most team members who reduce DSO by 25%.
    • Sales reps who sell product that is being sunsetted will get a bonus for every booked order.
    • This is the time to get creative with the rewards; gift cards, recognition events, golf clubs, etc. Keep in mind that the rewards should be evaluated in the context of the existing comp plan and need to be significant/creative enough to motivate.
  • Launch the program with a clearly communicated goal and performance criteria.
    • Market the SPIF to the sales team with a publicized launch including such details as who is eligible, time span it will be running and all other parameters that define the SPIF from either a product or activity perspective.
  • Measure the performance of the SPIF during the time period it is effective.
    • Provide as much performance feedback as possible to the field in the form of dashboard updates, ranking reports and inclusion in standard sales performance reporting throughout your sales organization.
  • At the conclusion of each program, pull the team together to do a full ‘post mortem’ on the effort. Evaluate the ability of the SPIF to move the needle and address the issue first identified as the reason for the SPIF.
    • As part of the review, perform a ‘thorns & roses’ exercise where each member of the team weighs in on what they felt what didn't work as well as hoped and needs improvement next time your put one together and worked well (to be sure you repeat the next time you run a SPIF). It is critical at this stage that the thoughts and opinions of your front line sales team be proactively sought out and included.
    • Evaluation should include an investment analysis; how much was invested in the program and what were the benefits. Did it make sense? Would you do it again? Did this SPIF deliver the results you were hoping for?

    SPIF's are great when used correctly, and even more powerful if the process is repeatable and consistently delivers results. Be sure to download the playbook below for a complete guide & tools.


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    Topics: SPIFF, Sales Comp Plan Fundamentals, EVP/Sales Leader, CFO/Finance Leader, Sales Compensation Professional, Human Resources