Increase Revenue With a SPIFF Program
By: Greg Fischer
Published On 08/09/2017
Sales incentives are not a new idea in the retail world. In fact, Sales Promotion Incentive For Frequent Sales, or SPIFFS - small, usually monetary bonuses - are said to have been used as far back as the early 1900's in the furniture industry and were an integral part of bringing Apple computers to the masses.
Separate from a company's core sales-incentive plan, SPIFF programs are short term bonus structures used to drive sales of a certain product during a particular period of time. This goal-specific bonus system can be an effective sales tool to introduce a new product offering, drive units of a certain brand, or to liquidate older inventory. For example, a national tire manufacturer is introducing a new line of tires and would like retailers to recommend their product at the point of purchase, and so they implement a SPIFF program. The program lasts for two months and during that time, for every sale of that new product, the manufacturer will reward the salesperson with a monetary bonus, often in the form of a check or gift card.
An innovative way to really put a SPIFF program to work is to incorporate product training. These small incentives not only encourage a company's sales team to engage in the training, they tend to comprehend and retain the information more often as well. Manufacturers are constantly working to be top-of-mind for consumers and sales reps will almost always recommend and sell products that are being SPIFF'ed.
Prompt payment of rewards is critical to keeping employees interested in a SPIFF program. On a small scale, SPIFFs are easy to manage using submittal forms sent directly to the manufacturer for payment. Large scale programs are commonly managed through online portals, emailed gift codes, and even mobile apps.
Begin your own SPIFF program to increase revenue with these 4 basic guidelines:
Have a clear objective – Before implementing the program, make sure the goal is clearly defined and has measurable results.
Keep it short and simple – SPIFF programs should be short term, have firm start and end dates, as well as easy-to-understand participation instructions.
Offer an appropriate reward – The incentive must encourage the desired action while staying within your budget limits.
Evaluate the effectiveness – Did the program have the expected ROI? How can it be duplicated or improved upon for the future?