How to Enthuse Channel Partner Participation in Spiff Programs Since the mid-19 th century, Spiff programs (Special Payment Incentive for Fast Sales) have been a staple in corporate engagement—widely regarded as the most popular and effective form of incentives that are used in modern business. Unlike other incentive programs which can be on the confusing side, Spiff programs are simple to understand and—for the most part—don’t intimate sales personnel to disengage from reward-based opportunities due to eligibility complexities. If your spiff programs aren’t providing you with the results you envisioned, or if channel partners are unmotivated by your deployed incentive—the problem may be simpler to fix than you think.
1.) What’s the Point? Like most things in life, maintaining solid organization, blueprinting strategies, and brainstorming objectives are a key component to seeing something/anything become successful.
Diving head first by deploying spiffs for channel partners without a clear direction or tangible objectives in place is a recipe for disaster. Sure, this process may seem obvious—perhaps even rhetorical—but you would be amazed at the sheer level of spiff programs that are designed without a framework of defined goals. For example, what themes matter most to the success of your business; what you’re trying to achieve:. Enter diversified vertical markets?. Improve partner transparency and longevity via reward?. Minimize partners’ DSO (Days Sales Outstanding) percentage?. Increase the level of accounts receivable?.
Bring lucidity into the indirect sales funnel?. Advance partner training/ customer service for end-customers?. Acquire higher market value? Although it’s important to have clearly defined objectives, it’s also imperative that you don’t overbook yourself with too many goals. Limit your strategy’s focus to three or less tangible objectives. 2.) Put Yourself in Their Shoes Through my experience, stepping into the mind of partners is one of the most effective strategies in stimulating motivation regarding channel program engagement.
If you were on the other end of the spectrum, what sorts of incentives would capture your interest? Remember, although every individual on this planet is different, we all share an eerily similar reward system. If you wouldn’t participate in an incentive, chances are most others won’t. 3.) Aim for the Mediocre In the channel industry, divide your channel partners based on best, average and worst sales performers. Once divided, customize your spiff programs so that it is targeted towards the average or middle performers. You would think this strategy is counterintuitive since deploying spiffs for top performers would mitigate the least risk; however, those partners don’t need the added incentive—they are already motivated.
You should be applying your energy to the middle demographic, as there is room for them to improve—thus increasing the stream of revenue throughout your entire sales funnel. 4.) Objectives Program Parameters Ambiguous eligibility requirements and subjective program guidelines are the two biggest factors that contribute to the failure of spiff programs. The program’s design should be structured objectively—painting a black and white image that leaves little to no room for interpretation.
Examples of FAQs: → Program Structure. Unrestricted Programs—Eligibility for reward(s) applies to all partners who achieve required objectives.
Restricted Programs—Only a selective group of partners or sales personnel can obtain rewards based on a pre-determined quantity of winners. Phase Programs—Rewards are allocated at different stages of the selling process; for example, a reward for acquiring a lead without conversion. → Timeline.
Some vendors yearn to see immediate results and often design the window of program eligibility too small to participate. Conversely, some vendors are less conservative on immediate results and hope to see long-term engagement. This is a good strategy for motivating partners to not participate, as the longer, they wait, the less enticing the incentive becomes.
→ Reward. An incentive that is irrelevant to the industry, fails to eradicate potential pain points or doesn’t offer a juicy enough reward (disregarding relevance) will surely limit partner engagement.
Potential incentives include cash, in-house equipment sporting events, concerts, funds for marketing, references, testimonials, merchandise, travel airfare, etc. Spread the Word.
. SoftServe collaborates with an Ontario-based provider of incentives management SaaS platform provider Fort Myers, FL — January 30, 2014 – SoftServe Inc., a leading global outsourced product and application development company, today announced the company has created a strategic alignment with, a provider of the user-friendly, sophisticated and highly flexible software as a service (SaaS) platform that enables large businesses to manage highly complex incentive programs in real time. The SoftServe team will offer support and enhancements for the 360 incentives core website and main services. Moreover, the SoftServe DevOps experts will work on improving reliability, security and acceleration development and deployment cycles for 360 incentives. “SoftServe approaches every project using the methodology that combines people, processes, and technology to deliver the highest quality software – in the most efficient manner,” said Alan Harlan, CEO, SoftServe. “We believe this approach sets SoftServe apart from our competitors as it’s the foundation for ensuring predictable, repeatable results and faster time to market for all our customers.” The 360 incentives solution allows manufacturers and distributors to maximize the effectiveness of their programs while minimizing administration efforts and costs to execute.
It enables customers to create, measure and manage all of their incentives programs such as sales spiffs or rebates in real time with 100% auditing, fast payout of claims, enhanced analytics visibility, flexibility of modules and payment methods, and exceptional customer service. 360 Incentives platform ensures effective fulfillment of incentives programs by bringing new technology to a business to increase top-line revenue. The platform provides a process that is fast moving, fast paying and transparent throughout. ### About 360 Incentives 360 Incentives is a company founded in 2008 in Canada with the idea that the world of manufacturer and distributor sales spiffs, rebate programs, sell-through allowances and other marketing incentives could be handled using the latest technology and saving people time, paper and delivering a really unbelievable user experience.
This commitment to delivering unbelievable experiences has enabled 360 Incentives to work with huge global brands: GE, Whirlpool, Samsung, LG, Electrolux, Sub Zero Wolf, Frigidaire, Danby, Bosch, Lennox and Unilock to name a handful. For more information, visit.
About SoftServe Inc. SoftServe, founded in 1993, is a leading global outsourced product and application development company dedicated to empowering businesses worldwide by providing end-to-end capabilities from product concept to completion.
We leverage our Abiliton™ best practice framework for software development optimization, ensuring predictable, repeatable results, faster time to market and highest-quality applications. SoftServe delivers proactive solutions in the areas of SaaS/Cloud, Mobility, BI/Analytics and UI/UX for industries including Healthcare, Retail, Manufacturing, Logistics, and Infrastructure & Systems. SoftServe is a rapidly growing global company with over 3,000 professionals and offices in North America, Western Europe, Russia and Ukraine.
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Are SPIFF Incentives a sign for hard times or for all times? Photo by Simon Blackley.
Can SPIFFS generate sales? They may be somewhat questionable ethically since it can appear to a potential customer that a salesperson is unbiased in their recommendation when they really are not. SPIFF or SPIF or SPIV refers to the practice of paying a small, immediate bonus for a sale to a salesperson.
It’s a way to encourage a salesperson to push one product more often than a non-SPIFF paid product. It’s usually paid to the employee by the manufacturer whose products are recommended or by their employer.
Good & Bad SPIFFs SPIFFs are common practice in publicly traded companies to reduce inventory and lower carrying costs or to get rid of older merchandise. It’s often used as part of a “suggestive selling” program which does increase sales. SPIFF programs are used heavily in the home appliance, furniture, and phone industry. It’s also a common restaurant and retail practice. Customers can benefit too when these recommendations are appropriate. They can be good for business but they can also be questionable or even illegal.
In 2007, the labeled SPIFFs as kickbacks and illegal — at least for government purchases. History of SPIFFs SPIFFs were used very successfully in the early days of personal computers when there were computer stores. They helped launch Apple to the general public and kept IBM going strong. These companies gave salespeople SPIFF incentives to demo their computers. The lack of an incentive (other than product quality) certainly had a negative impact on the well-engineered but short-lived TI personal computer. The term may have originated in the furniture industry in the 1900’s.
The origin of the name SPIFF or SPIF is unclear but the letters may stand for:. Sales Performance Incentive Funding Formula. Sales Performance Incentive Fund. Special Performance Incentive Fund.
Specific Price Incentive For Final Sale. Sales Persons Incentive For Fun SPIFF Best Practices You are setting a sales policy and precedent that others will use to judge how you do business. When using SPIFFS, are to use them for short periods of time as incentives to drive units or quick dollar margins. Then, use cash or something the salespeople really value or think is “spiffy” like an iphone or “have to have” gadget as the reward.
If you’re a reseller, you can demand them from the manufacturer and let them pay for this “employee benefit” instead of you. The IRS considers them incentive pay so they do fall under the rules for 1099 MISC Commission. Be prepared to track and report them. Fraud & SPIFFs You do also have to watch out for fraud or misuse of the SPIFF program. One in Florida involved the use of pre-paid debit cards that had been given to employees as a “Sales Persons Incentive for Fun”.
This employee took possession of cards of former employees, altered their pin numbers, and changed the billing addresses so that debit card statements would be sent to her home address. She then made hundreds of on-line transfer payments from the company’s bank accounts to numerous debit cards that she used to make personal expenditures. Be Prepared Are they right for your business? They may be common practice in your industry. The use of SPIFFs may even be the accepted way of doing business in countries you sell to or want to sell to. It can be hard to prevent it happening when any of these are true.
In the end, unless you’re in government contracting, it’s a matter of ethics and perception. How do you want your salespeople to perceive you and be perceived by others?
Before you use them, think it through. Generating sales is important but are you prepared to set them up and manage your SPIFF programs correctly? The Business Success Center has a Sales Playbook Assessment you might want to complete to see if you’re ready for this complex sales technique. (This article is from the ebook, Sales to Go, part of the BOSS (Business Ownership Success System) series.
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Spiff Programs For Sales Reps
Sales incentive programs, or SPIFF programs, are proven to be effective tools to increase local brand demand and loyalty through your trade partner channel. This is especially true if your trade partners also sell competitor brands. We’ve always known that salespeople are highly motivated by direct monetary incentives. We have seen this to be especially true when they can directly and in real time see the status of their claims, can expect a high approval rate, and receive their SPIFF check quickly. Why do companies utilize SPIFFS in their channel marketing strategies? A common reason we see SPIFFS used is when a new product or model is being launched to the market, a brand may want to move existing inventory off the trade partner floors and shelves so the salespeople can then get focused on the new product being launched. Putting an extra SPIFF on the old models can be extremely effective in accomplishing this goal.
SPIFFS are also effective to motivate new customer acquisition or to motivate sales of your most profitable products. Conceptually, a typical sales SPIFF program is fairly straightforward to define and administer. Resident evil 4 weapon mods pc download. It would work something like this: The channel marketing program manager will identify the goals and objectives, requirements for salesperson eligibility, and requirements for product (or other defined parameter) eligibility. This is communicated to the channel partners and is well understood. The salesperson understands clearly, is motivated to sell the SPIFFed product(s) and does so, then registers the product model, and ta-da!
They quickly receive their SPIFF check. They are rewarded, happy, and now focused more than ever on the brand and its products. Unfortunately, implementation of SPIFF programs can often become burdensome for your trade partners and result in frustrated salespeople, poor program utilization, poor brand alignment and ultimately poor local brand demand. This not only completely defeats the purpose of implementing a SPIFF program, but it can actually incent negative behavior – causing salespeople to be so frustrated that they drop attention to your brand and move their attention to your competitors’ brands. Therefore, it’s critical that a SPIFF program be effectively set up and administered. Based on our work with some of the world’s strongest brands, we have found the following best practices in SPIFF program management:.
First and foremost, the SPIFF program should be integrated into the brand’s overall marketing activities and funds. It should be seen and managed as one of many tools in the marketer’s arsenal.
It is ONE element of channel marketing. As you measure your overall channel marketing ROI, it should include your SPIFF incentives, along with the other channel marketing activities. So, your sales SPIFF programs need to have good integration with all your other channel marketing programs. Clear upfront program rules: The program should clearly communicate what products are eligible for reimbursement and how quickly salespeople can expect to be reimbursed. They should have smart rules programmed that are aligned with what salespeople are likely to do.
By doing so, you will reduce the chance that salespeople experience the frustration of unmet expectations. Salespeople that are frustrated start focusing on the next brand. SPIFF reporting available to the salesperson on a real-time basis, in an easy to use format. Salespeople want to know the status of their SPIFF claim. Has it been received?
Approved or denied? When will I get paid? Has the check been sent?
A good SPIFF software management tool will provide all this information in a super easy to use form. (Remember, if it’s not easy for the salespeople to use, they won’t use it!). Real-time validation (and correction) of the salesperson’s submitted information. With real-time information validation errors are identified on the spot, so it’s easy from a salesperson to make a correction. For example, right at the point of information entry, if the salesperson forgets to input a field, or provides a model number that is not covered under the SPIFF program, or an invalid address, good SPIFF software will immediately cause a pop up window to occur, flagging the missing or wrong information.
A good SPIFF software program will have things like the correct model numbers defined up front, so it won’t even allow an incorrect model number to be entered. This real-time validation provides immediate feedback in the form of business rules and reduces salesperson frustration. Who wants your salespeople to think they’re getting SPIFFed on a product they sold, only to get the disappointing news after the fact, that the product wasn’t covered? Again, frustrated salespeople results in them incented to focus on your competitors’ products. A good system will go even further to follow up with email messages to the salesperson, and when needed, quick personal outreach by phone and email. Pro-active and interactive two-way information and communications system: A good system will provide the brand’s prioritized messages to the salespeople when they log into their program portal. For example, they might see information about new SPIFF programs that are beginning, or a reminder to correct a missing field of information on an existing claim.
A two-way communication system allows for better interaction vs. Manual programs, or programs that require salespeople to mail in, fax in, or email the information. Individualized communication preferences. How do your retail salespeople want to receive your information and submit claims?
A good program will let them identify this upon registering. For example, salespeople can identify to be emailed only, or some might prefer text messages or phone calls. For submitting claims, some might choose online submission or emailing claims with attachments, while others might prefer mail or fax.
SPIFF Fraud Prevention Mechanisms: Unfortunately, fraud does exist, and it is estimated that between 2% to as high as 13% of claims are fraudulent, depending on the product category. A good SPIFF program will have business rules, and associated third party validation data that prevent fraudulent claims from being processed. So, for example, if the serial number is used more than once, or invalid addresses or consumer data is being submitted, it will be caught by the software rules immediately.
Fast and accurate claim review. We can’t overstate the importance of this. A good program will review a claim and provide feedback within 24-48 hours. Salespeople are highly motivated by SPIFF Incentives, but we know from experience that if they don’t get quick turnaround on their claims and don’t receive their money quickly, they will disengage in the brand and turn their attention elsewhere.
Automated claims review: Often SPIFF programs are implemented to motivate salespeople at a particular time of year (think holidays, the kick-off to spring lawn maintenance season, etc). If your SPIFF claims review process is manual and dependent on people, then it simply can’t process the capacity spikes in situations like this. An automated system, with well-designed business rules can. It gets back to timeliness of response.
If the salesperson is not seeing feedback on their SPIFF claims with your brand, they’ll bale out quickly and redirect their selling energies. Friendly, experienced, and helpful humans: Automated software will dramatically reduce the number denial rate for SPIFF claims.
However, there will always be those few salespeople that simply need a helpful human at the other end of the phone. A good SPIFF management program provider will have a team of experienced and helpful program managers for just such a case. The goal is to make the salespeople successful in submitting their claims, right? So let’s help them! The more successful they are the more successful we are in achieving our brand channel marketing objectives. Fast SPIFF payment turnaround time: If you do the above things, your turnaround time should be fast, which means it will be effective. Payback in days is ideal and no more than a couple of weeks.
Especially with products that have short sales cycles, salespeople are motivated on a short selling horizon. If your SPIFF turnaround time extends beyond this horizon, you will lose their attention. One singular point of entry for the distribution partner’s channel marketing: The SPIFF activity should be available in the same common portal dealer personnel use for their other channel marketing activities (co-op, rebates, ads, etc). This avoids separate site with numerous passwords to remember. When it’s all integrated, it’s easier for the dealers, more efficient for the brand marketers, and will result in program objectives being met. Helpful SPIFF Reporting: By this we mean easy to access and understand reporting of claims status for the salespeople.
They should be able to go online and quickly see the status of all their claims and know exactly how much was approved and then to expect the next check. It’s as simple as that. A report might look something like this: A successful sales SPIFF program needs to run very smoothly, otherwise it defeats the original purpose and can actually backfire, causing salespeople to actually stop promoting your product and incenting them to turn their attention to your competitors’ products. People (including trade partner salespeople) tend to take the path of least resistance.
We believe if you implement these best practices into your sales SPIFF programs you will reduce those points of resistance and see more engaged salespeople and ultimately, stronger local brand demand and loyalty. To learn more about how we helps our clients achieve their sales SPIFF program goals. What our clients say about us. Channel Fusion's approach to service and custom software solutions are unmatched in the industry! — Client, Corporate Marketing.
Awesome! I appreciate it. The new website is a huge improvement and much easier to use than what the previous provider offered. It is also very nice to get real service from someone knowledgeable. — Client Dealer. I am truly very appreciate for all your help and the exceptional level of customer service you have expressed during our interactions. It makes my job so much easier.
— Client, Field Manager. You folks have been outstanding in your response time, professionalism, and helpful attitude that you always provide. I am convinced that corporate sales of products have been seriously impacted in a postive way as a result of your hard work. — Client Partner Agency.
Channel Fusion's technology ecosystem coupled with an incredible service model and an ability to customize solutions around our internal processes has given us a significant competitive advantage. Client, Retail Marketing Director.
The processes that underpin sales incentive program management have long been fairly stagnant, as brands have relied heavily on paper-based records to track activity in the channel. This meant significant delays between when sales were made and when brands could start responding to trends across the channel, making it extremely difficult to optimize and improve SPIFF initiatives. Modern channel management tools change this by gathering data in digital formats, allowing for almost real-time communication between brands and indirect sales representatives.
Building stronger relationships in the channel Getting more and better information from the channel becomes invaluable when it comes to SPIFF programs. A sales incentive initiative is able to derive value only when channel partners are engaged, and fostering more connectivity throughout the channel fuels engagement. Three ways to use a channel management solution to build stronger relationships across the channel are: 1.
Make incentive processes easy If one brand allows sales agents to log a sale using their smartphone and have that sale automatically trigger a SPIFF payout if program conditions are met, you can probably expect a positive response. Conversely, if another brand requires paper documentation with specific forms to fill out, mail or fax, there’s a good chance sales associate will be less likely to file everything in a timely fashion or even bother to engage with the brand and its incentive program. In the end, it’s whichever one can get the payout to sales partners most effectively, which is the digital methodology.
It is difficult to get motivated to work hard for a payout that will be processed over the course of weeks and not arrive for a couple of months at the earliest. It is much easier to find energy to work for an incentive payout that will arrive quickly. “Sales incentives must be easy enough to access to make the effort worthwhile.” Incentive programs can motivate salespeople in the channel to go along with what brands want, but the benefits must be easy enough to access to make the effort worthwhile. Using digital tools to simplify and streamline incentive filing and payout processes can play a key role in keeping channel partners happy. Streamline training How do you measure the success of channel training programs?
Getting accurate product information to sales partners isn’t enough. Brands must make that information digestible, provide answers to questions that consumers are likely to ask and ensure key specifications are easy to find at any given time. This makes training essential, but figuring out the best way to do it is possible only when brands are aware of the impact training has on sales. Channel management software platforms allow brands to:.
Assess the relationship between when brands release training materials and how timing impacts sales. For example, you can learn if getting materials out well before a campaign is helpful, or if your partners tend to dial in only when the program really gets going.
Get feedback on which types of training content get the best results – even to the point of experimenting with different types of content and comparing sales data in periods shortly after the materials are released. Make determinations about how much and what type of training will most predictably drive the desired sales activity. Building strong relationships across the sales channel often depends on a blend of accessibility for users and visibility into how sales partners respond. Channel management solutions provide options in both of those areas. Create a positive end-to-end experience Fostering engagement within the sales channel comes down to more than just money. Sales workers expecting endless incremental increases to SPIFF payouts for selling your products may eventually reach a point where money isn’t enough to keep them attached to your brand – they’ll just go with whomever has the most interesting offer, struggling to say focused on your brand if a product falters even slightly in the marketplace.
Building a stronger relationship with sales partners, however, can create a stronger bond. Achieving this hinges on showing you value their time, energy and work. Making incentive processes easy is a first step here, but it is vital to provide a positive end-to-end experience for sales partners to strengthen the relationship. Rewarding somebody is powerful. Connecting with a person, however, can create a strong partnership. Improving day-to-day interactions between sales workers and brands can build relationships.
If training isn’t helping, how does a sales worker reach out? If products aren’t selling, what options do sales workers have for support? The ability to respond to activity in the channel quickly is possible when sales workers are able to reach out with ease. “Making information more accessible can set the foundation for better relationships.” A holistic channel management program will support sales engagement at all times. Modern channel marketing tools provide the visibility into processes and sales data that brands need to optimize operations around their channel partners. Take advantage of the information at your fingertips Each of these points emphasizes the growing role data can play in managing the channel.
Making information more accessible can set the foundation for better relationships. Access to sales data can make it easier to identify how training impacts performance to optimize strategies. Building a positive end-to-end experience is reliant on being responsive to the channel, which is possible when data is gathered in a timely fashion. Information is a catalyst for innovation in channel marketing and engagement programs, and data lets brands optimize their SPIFF programs in light of real-world performance.
Leading channel management solutions are evolving in response, and 360insights offers a SPIFF module within its cloud-based channel management platform that can serve as a hub for all of your sales incentive program needs. Want to know more? Check out our free.