How To Use SPIFFs The Right Way In Tech Sales

Today we're talking all about SPIFFs!

A Sales Program Incentive Funds System (SPIFFs) works wonders in tech sales because it drives the right behavior and motivates employees to achieve targets, growth, and results each month/quarter/year.

To help motivate sales reps, many companies have an incentive plan that rewards employees when they successfully increase the profit margin by expanding their commercial base by gaining new customers or persuading existing customers to purchase more products. This type of incentive is called a Sales Program Incentive Fund (SPIFF).

How SPIFFs Work

The sales SPIFF program was designed for individual sales representatives, not groups or territories. The way it works is that if you sell more than your target within 30 days after month-end, then you will get an extra commission percentage on top of what you already earned during that month.

It is important to note that this extra commission percentage will be granted only to those who won the SPIFFs for that month and not just to any sales representative.

This Sales Program Incentive Funds (SPIFF) program is usually 5 percent of the target quota. However, many companies go as high as 15 – 30 percent of one's monthly quota if certain conditions are met, such as exceeding 100 percent of their monthly target.

This means having six customers each purchasing at least $500 worth of merchandise from your company in a month would give you a 100% SPIFF. If all six purchased over $1,000 worth instead, you would be looking at a 200% SPIFF.

Many companies also link their SPIFFs plan to achieving measurable results, requiring additional staff and implementing new technologies and initiatives. These may include sending employees to conventions and seminars, participating in trade shows, or even hosting company events like picnics or parties.

The idea behind this type of program is to give the Sales Representative an incentive to do better by promising them more money if they perform well; it is built on the foundations of rewarding performance and results. The best thing about it is that everyone wins:

• The company gets bigger and better with each sale made, which increases profits
• The employee earns more money for his hard work and contributions
• The customer has access to more products and services at better prices

How to effective rollout out a SPIFF in Tech Sales

Sales Program Incentive Funds (SPIF) are one of the most effective ways to reward your employees.

While this sort of incentive might sound great, it could also hurt your performance when it comes down to making sales, especially when you have added pressure to deliver on something extraordinary or out of the ordinary.

There are also a lot of other factors you need to consider when thinking about this type of program, such as:

• Tax: If the SPIFF is taxable, it might affect the sales reps' total income if they receive a commission from the employer. For most in North America, this is something you will want to enquire about.
• Timeline: How long should each SPIF take before considering them finished. It would help to consider whether it is better to offer low targets with a high percentage Commission Incentive Fund (SPIFF) or vice versa.

The good thing about SPIFs is that they work well when paired up with an accountability plan which can help you track your successes.

But more important than anything else is understanding how this type of Compensation Plan works and making sure you fully understand its benefits, drawbacks, and processes behind it. After you have all the necessary knowledge, you'll be able to make a smart decision on whether or not SPIFFs will work for your company.

10 Easy Steps To Use SPIFFs The Right Way In Tech Sales

1 - Target the right people and groups

Make sure you're targeting the right people and groups to offer this type of commission. You can't just give everyone a bonus because that would be extremely unfair and unproductive.

Treat every employee as an individual and base your Sales Program Incentive Fund (SPIFF) on their performance as well as company growth as a whole over the past few months/quarters

2 - Set the rules

Set rules, targets, time frames, and quotas ahead of starting any new SPIFFs plan, so there are no misunderstandings or unrealistic expectations from either side. The more organized you are about it, the more organized they will be when meeting requirements throughout each month/quarter/year.

This way, you'll also get an accurate picture of the progress you're making.

3 - Set your goals

Set goals with each employee and save them in a document that everyone has access to, so they know what's expected when meeting targets. It also helps save time and avoid confusion for everyone involved.

This way, they can see their results and feel satisfied knowing how much they've improved over the last few months or years.

4 - Offer rewards

Offer rewards to achieve targets and keep it realistic, so employees don't get frustrated but still feel motivated enough to do better than before. You can add up different types of rewards such as monthly company outings, lunch/dinner cruises, etcetera that everyone will enjoy and participate in.

The formula for measuring Sales Program Incentive Funds (SPIFFs) performance is simply a matter of dividing the amount you have earned by the target you have set, then multiplying that percentage by your commission percentage.

This way, you'll get a nice overview of how everyone is doing throughout each month/quarter/year.

By offering incentives based on this type of program, employees will always feel motivated to do better, which means they will work harder and smarter, making your company grow faster than ever before!

5 - Understand the reasons why SPIFF works

Sales Program Incentive Funds (SPIFFs) works wonders for tech sales because it drives the right behavior and motivate employees to do better than before. Also, it's a way of participating in company success which makes everyone involved feel great about themselves.

It will help you understand and realize your goals faster than ever before so you can gradually achieve them throughout each month/quarter/year. This is why Sales Program Incentive Funds (SPIFFs) work best when paired with an accountable plan that ensures all your employees perform as they should throughout each month/quarter/year.

With this type of Compensation Plan, you'll be able to track every movement and growth within your company, making sure nothing slips through the cracks, and everyone is doing their best!

6 - Create a plan with Sales Program Incentive Funds (SPIFFs)

Create a plan and implement it gradually to realize results sooner than you think. This way, you'll be able to save time and energy that would otherwise be wasted on having meetings and explaining how everything works. Just make sure everyone clearly understands what's expected of them and what they stand to gain from doing so before getting started.

With this type of Compensation Plan, you'll be able to track every movement and growth within your company, making sure nothing slips through the cracks, and everyone is doing their best!

7 - Calculate what you can get out of it for your company

Calculate what you can get out of it for your company and share that with your employees, so they know exactly how much extra income everyone will make by working diligently throughout each month/quarter/year.

This way, you'll avoid any misunderstandings and will be able to track the progress in real-time, getting a better picture of the situation at hand and making it easier for everyone involved to achieve their goals faster than ever before. This, in turn, will contribute to growth within your company which means more money coming in

8 - Keep things fair and equal

Keep everything as equal as possible between team members because it will make it fairer for everyone involved and prevent misunderstandings or confusion about who is working harder than the other.

This way, no one will lose motivation to do better, which means you'll gradually create a stronger workforce that can make your company grow faster than ever before!

9 - Allow for flexibility

Allow for flexibility so your employees can view their schedule as flexible as well. Employees should adjust their schedules accordingly, allowing themselves enough time to take care of all their responsibilities without considering extra hours to meet a certain deadline or objective set by the company.

This way, no one will lose motivation and feel like they're not working extra hours for no reason, which means you'll save time and money.

10 - Make your employees understand how it all works

Make sure your team clearly understands how everything works before getting started.

This way, everyone will know what they stand to gain from doing their work the right way, which will motivate them to do their best! You can give them a call anytime they need clarification or guidance on how it's going so far, and this will make a huge difference in the long run!

There is something for everyone at Uvaro! We help launch tech sales careers, but we also help grow tech sales teams! If you're looking to transition your career or start scaling your team, we're here to help!