Spiff stands for ‘Sales Program Incentive Funds’, which is an incentive program that organizations use to drive sales. For example, a Spiff can be used when the organization needs to move X number of units of a product to meet their sales goals, but the sales team is holding back progress because they aren’t as invested in moving this product as they perhaps should be.
The spiff is a short-term solution that’s designed to motivate sales teams to get themselves into gear and begin shifting products. It essentially boils down to telling sales representatives that if they move X amount of product within Y time, they’ll receive Z as a reward. Most sales spiff incentives are financial, but anything can be offered as a reward—extra PTO, prizes, vacations, special recognition, pay rises… it’s down to the organization to decide this.
Although spiffs can be a powerful motivational tool, there’s no guarantee that they will work, especially in the long term. If a sales team is regularly demotivated or underperforming, there’s usually a deeper root cause that needs to be rectified.
Special Program Incentive Fund (SPIFF) Explained:
FAQs
Spiff stands for Sale Program Incentive Funds. While regular commissions are part of a salesperson's compensation structure, a spiff is a more short-term incentive offered to motivate sales of a specific product or service within a defined time frame.
Of course. When you overuse virtually anything, it can backfire, especially rewards. Spiffs can also create short-term thinking, demotivate your sales reps once rewards disappear, and encourage unethical behavior as reps try to meet goals. Spiffs are most effective when they're combined with a long-term strategy and a healthy sales culture.
The most common reward is cash, but you can also offer non-monetary incentives like extra PTO, gift cards, or team outings. Your best bet will be to offer rewards that align with what your team values most.
Spiffs work best when a company needs to quickly drive sales of an existing product or launch a new one. They're also great for meeting end-of-quarter targets. Spiffs are helpful when your sales team isn't already focused on your product because they're either not familiar with it or they've got competing priorities.
