As a revenue leader in a B2B organization, you constantly search for ways to motivate your sales team and increase sales engagement. One strategy to consider is using Sales Performance Incentive Funds, or SPIFFs.
What are SPIFFs?
SPIFFs are financial incentives offered to sales team members to encourage them to meet or exceed specific goals and revenue KPIs. These incentives can take various forms, such as cash bonuses, gift cards, or other rewards. SPIFFs can be offered on a one-time or ongoing basis and may be based on an individual salesperson's performance or the performance of the entire team.
Some companies use SPIFFs to encourage salespeople to try selling new products or services or to focus on specific customer segments. Others use them to motivate reps to meet or exceed sales quotas, and to celebrate team milestones and achievements.
Risks of SPIFFs:
While SPIFFs can be a useful tool for motivating sales teams, they also come with inherent risks. For example, if the criteria for earning a SPIFF are not clearly defined or are perceived as unfair, it may lead to resentment among reps. Additionally, if the SPIFF is too large, it may create an unhealthy focus on short-term sales rather than long-term customer relationships. It is important for companies to carefully consider the potential trade-offs and communicate clearly with their team about the SPIFF program.
How to Use SPIFFs Effectively
If you are interested in implementing SPIFFs as a motivator for your B2B sales team, there are a few key considerations to keep in mind:
Build Around Goals and Individual Rep Capabilities:
When deciding how SPIFFs should be structured, consider the team's goals and the capabilities of individual sales reps. Setting realistic goals tailored to each rep can help ensure that SPIFFs drive engagement. SPIFFs should be customized to your specific team's needs, allowing you to incentivize certain activities or behaviors that will help you reach your goals.
Use in Conjunction with Other Sales Strategies:
It is also crucial to note that SPIFFs should be used in conjunction with other sales strategies – as SPIFFs should not be a substitute for quality sales practices. Instead, they should be used to complement and drive other efforts, rather than as a standalone strategy.
Similarly, SPIFFs should be combined with other forms of motivation and incentives. SPIFFs should not be the only reward available to reps – they should be one part of an overall package that includes regular feedback and recognition, as well as rewards for meeting long-term goals.
Consider Tools for Tracking Progress and Delivering Rewards:
When implementing SPIFFs, there are a few things to consider in terms of logistics: the strategy framework, the timeframe of the program, how sales reps will redeem their rewards, and whether you will have any limits on the reward size. Most SPIFF programs use a combination of tools, such as sales incentive software and automated reward delivery systems, to track progress and deliver rewards.
Gamification tools like UPonent, for example, can complement a SPIFF incentive seamlessly with its leaderboards, points system, and challenges. Together, these automated tools provide an extra incentive for reps to work hard and reach their goals while also boosting morale in the workplace.
Alternatives to SPIFFs
While SPIFFs can be an effective way to motivate sales teams, they may not be the right fit for every organization. If you are considering alternative strategies for motivating your sales team, here are a few options to consider:
Commission-Based Pay Structures:
A commission-based pay structure rewards sales reps for their individual performance, giving them the incentive to sell as much as possible. This approach can be effective for sales teams that are driven by competition and the desire to earn more money. However, consider the potential drawbacks of commission-based pay, such as an over-focus on short-term sales rather than long-term customer relationships.
Non-financial incentives, such as extra time off or professional development opportunities, can be a powerful motivator for sales teams. These types of incentives can help to create a positive work culture and encourage a long-term focus on professional growth.
Incentive trips can be a great way to motivate sales teams, particularly if they are combined with other types of incentives. For example, you might offer a salesperson the chance to go on an all-expenses-paid trip if they meet certain sales goals. Incentive trips can help to create a sense of camaraderie among team members and can be a powerful motivator.
SPIFFs can be a valuable tool for motivating B2B sales teams and increasing sales engagement. However, it is important to carefully consider the potential risks and to use SPIFFs in conjunction with other sales strategies. By considering the needs and goals of your sales team and using tools to track progress and deliver rewards, you can effectively use SPIFFs to drive better results for your business.