Sales Compensation 101: What is a SPIFF?

2 min read
May 4, 2023

A SPIFF, or a Sales Performance Incentive Fund, is a short-term incentive program designed to improve sales over a defined period of time. In today’s article, we take a closer look at SPIFFs, how they factor into a sales compensation management plan, and more. 

Let’s get started! 

Why Use SPIFFs for Sales Compensation?

Why would an organization need a short-term incentive plan, especially if it has a long-term sales compensation plan in place? 

Well-executed SPIFFs can help bring new products, services, and offerings to market at an accelerated rate — and that’s not the only benefit! 
Effective SPIFFs can also help organizations:

  • Increase existing sales rates for struggling sales reps
  • Meet critical time-of-year sales deadlines, like the end of a period
  • Drive additional revenue for calendar events, like the Fourth of July, or the first day of Fall.
  • Set and meet company objectives that extend beyond finances — like migrating to the cloud

Considerations When Using SPIFFs for Sales Compensation

SPIFFs can work wonders when they’re properly executed. On the other hand, poorly-executed SPIFFs can lead to confusion, headaches for multiple departments, and even negative customer experiences. 

When planning your next Sales Performance Incentives Fund, be sure to consider the following.

Sales Familiarity Levels

Given the nature of SPIFFs, sales reps need to be fully aware of the aim or goals of the SPIFF.  You must clearly explain new product features, services, and processes to all stakeholders.

Limits to Effectiveness

Customizing and personalizing your incentive programs to fit the needs of your organizations, vendors, and sales reps can make all the difference. However, many SPIFFs are limited in flexibility due to short turnarounds, performance tracking issues, and the need for a true Sales Compensation Management Solution (SCMS). 

Monitoring Data and Progress

Without a quality SCMS in place, it’s difficult for businesses to track rep progress in real-time, identify what deals qualify in Salesforce, and close out the SPIFF period in a timely fashion — all while ensuring data reaches the right person, in the right department, at the right time.

Having a firm understanding of when the SPIFF is running, when it’s concluded, and the final results are essential to running a well-oiled Sales team.

Planning Your Next SPIFF for Sales Compensation

Now that you know why and when to use a SPIFF for sales compensation, here are a few things you can do to improve your chances of success. 

  • Clearly define the scope of your campaign and carefully consider the following:

  • Gain buy-in from key stakeholders, including:

    • Senior leadership

    • Managers

    • Sales teams

    • Finance/Accounting

    • Marketing

  • Over-communicate with key stakeholders, by offering:

    • Campaign rules, rewards, and desired outcomes 

    • Supporting marketing materials

      • Example: New product one-sheet

    • Real-time analytics & progress updates

  • Conduct a SPIFF Retrospective

Optimize Your Next Sales Compensation SPIFF with SalesVista

If you’re looking to optimize your next SPIFF, we hope that you consider SalesVista!

We help eliminate siloed sales data, make it easier for managers & leaders to view real-time SPIFF performance metrics, and grant on-demand and immediate access to the information your reps need to really move the needle. 

SalesVista is designed to help organizations complete the circle and keep all parts of the sales compensation management process in one centralized location. 

Want to see just how SalesVista’s Sales Compensation Management System (SCMS) can help your organization better plan, manage, and execute SPIFFs of all types? Book a free demo today by clicking the link below.


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