SPIFs are also a little like heroin, Dimisa says: The more you get the more you want, and it’s difficult to kick the habit. It’s hard to take the SPIFFs away.
DiMisa is Senior Vice President, Sales Effectiveness Practice Leader for Sibson Consulting, and author of best-selling business book “The Fisherman’s Guide to Selling.”
What’s a SPIF?
SPIF stand for Sales Promotion Incentive Fund, or other similar wording. Essentially, says Dimisa, it’s an award for anything outside the strategic compensation plan. For example, there’s a new product, so there’s an extra incentive to get it launched.
Companies are spending more on SPIFs and awards today than they have in years past, Dimisa says. In one Sibson survey:
- 72% of surveyed companies rewarded sales people with SPIFs
- For 80% of respondents, these programs make up 3% – 10% of total incentive dollars paid: the average was 7 %
Typical SPIF awards are paid on the following items:
- Renewal of contracts or customer satisfaction
- Percentage over a target
- Net sales
- Strategic products
- Contract length
- Team accomplishments
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Award and Recognition Programs—Non-Cash examples
Don’t forget non-cash rewards, Dimisa says. They may be a way to reward employees without breaking the bank. Some of the non-cash awards he has seen include:
- Article in company newsletter
- Six-month first class upgrades
- Lunch Paid for all in top sellers
- Airline club memberships
- Conference attendance
- Removal of “bad accounts”
- Sales employee of the month
- Event tickets
- Gift certificates
- Home computer
- More senior/prestigious title
- Time off
- Bottle of wine
- Recognition meals
- Company spokesperson
- Flowers to the spouse
- Plaque with top reps’ names
- Sales contests
- Weekend trip for family
- Training award
- Parking spot for top performer
- Periodical subscriptions
- Upgrade of company cars
- Round of golf
- Company stock
- Team outings
- Corner office
- Top assignment
- Six-month yard service
- Letter from supervisor
- Larger territory
- Dinner with spouse
- Dinner with the CEO
- Club memberships
Which ones might be good incentive payments for your reps?
Assessing the pay mix and determining all the factors involved in incentives—always a challenge, but the solution always starts with the basic information—the job description.
Job descriptions are critical, yet all too easy to back-burner. What’s the state of your job descriptions? Concerned they might not be up to date and ADA-compliant? … Actually, with BLR’s new program, they are.
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