What Is A Spiff Incentive And Why Should My Business Use It?
Providing the right kind of sales incentive or reward can mean the difference between motivated sales reps/agents and a group that is just going through the motions. Many people ask what the right sales incentive is, but we already know the answer: it’s been proven through research that people prefer cash or equivalents to non-cash incentives such as merchandise, trips, or experiences, because of the freedom and flexibility. However, the real million-dollar question is when and how to reward your employees. Do you reward short-term or long-term achievements? A good business should do both, but sometimes they forget about the short-term stuff: the Spiff incentive.
Businessdictionary.com defines a Spiff as a “slang term for the sum paid by a vendor’s salesperson to a retailer’s salesperson to motivate him or her to push the vendor’s goods.” In layman’s term, a Spiff is an incentive that rewards a salesperson immediately for making a sale. It is typically used in short-term promotions, such as launching a new product or reducing inventory. With a Spiff, reps can zero in on one specific activity rather than focus on their entire overall performance, and it’s a great way to re-engage sales representatives who have never been top performers in longer promotions. For example, a sales rep might be behind on their overall sales goals, but could have great success selling a single product during a Spiff promotion. So, for example, sales reps who work in a geographic location that, due to lower demand, may not be able to achieve certain sales goals, still have the opportunity to be rewarded for their hard work.
With employee disengagement levels at a high (68% of employees are either not engaged or are actively disengaged in their jobs), a sales Spiff program can help instill some enthusiasm and fun in the workplace. Spiff programs that are well implemented and monitored can increase sales by as much as 27%.
So now that we have the “what” out of the way, let’s focus on the “when.” First off, your business must know what the goals of an incentive program are. If it’s something more immediate, like increasing sales on a specific product, a Spiff promotion is a better bet than a longer-term “loyalty” incentive. But make sure you have your goals properly worked out.
Due to the nature of the promotion, Spiffs require some attention to manage them properly and can be confusing if there are multiple promotions happening at the same time, especially if they aren’t properly organized. This can be a real problem if the multiple promotions unintentionally conflict with each other. However, implementing an electronic payments system can fix this.
A great way to launch and manage Spiff rewards is through electronic payments and payment cards. This allows a business to streamline their rewards system and eliminate both time and costs typically associated with non-cash incentives or cheques. Not only that, but you are also providing a practical reward that can be used just like cash at any retail store, online merchant or ATM that accepts credit cards. The cards themselves can also be branded with your company logo, a free reminder of your company’s good will and free advertising. Open-loop incentive cards can also provide extremely useful data and analytics that can be used to gain useful insights into your target audience.
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