What is a SPIFF?
SPIFF is an acronym for “sales performance incentive fund”. SPIFFs are a motivational tool used in partnerships to motivate and boost product sales. It’s essentially a short-term bonus you offer to your partners’ sales reps, rewarding them for selling your product or achieving specific sales goals. You might set up a SPIFF program to encourage the sales reps at your partner companies to prioritize selling your product over others. If a rep clinches a new customer for you, they might receive a cash bonus or some other type of reward, on top of their usual commission.
SPIFFs typically include a:
- Defined sales target or goal
- Specified monetary reward for achieving the goal
- Time limit within which the goal should be achieved
Keep in mind that while SPIFFs can be a powerful way to energize your indirect sales channel, use them judiciously. Over-reliance can lead to issues like channel conflict between your internal and indirect sales teams or erosion of profit margins for your business. It’s also important to balance SPIFFs with other types of long-term, strategic channel incentives.
Think of SPIFFs as an exciting race where the fastest runners receive a bonus prize. By adding a layer of competition and extra rewards, you can rapidly motivate your channel partners and drive new sales. Balance these with incentives that invest in your partners’ long-term growth, like personalized training, certification programs, and co-innovation opportunities.