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What is a spiff and how to use it for your sales team

What is a spiff and how to use it for your sales team

What is a spiff and how to use it for your sales team

When business needs diverge from your sales incentive plan, you can use a spiff to realign incentives.

Diarmuid Glynn
Diarmuid Glynn

May 16, 2022


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As the manager of a sales team, you need to plan your year in advance. Before the next sales year starts, you will define an appropriate quota and commission structure given your company’s revenue goals. You want the new sales year to start with everyone properly incentivized and align with your business goals.

But as the sales year progresses, circumstances change, and you may need to modify the incentives of your team. For example, you want more new logos or to enter a new market. Or you may want to encourage upselling of that newly launched product. Or perhaps some unexpected churn in your accounts prompts you to focus more heavily on renewals, and so on.

Tinkering with your basic commission structure in the middle of the year is not a good idea. So what can you do?

You may have heard somewhere about a sales spiff, and that it can be used to solve your problem. But what is a spiff? In this article we will explain what it is and how you can use it.

What is a spiff?

A spiff is a short term, ad-hoc incentive for your sales team. Most spiff rewards are financial, and it's a reward that is paid on top of their incentive compensation plan or commission structure.

What does spiff stand for?

Spiff stands for “Sales Performance Incentive Fund”. It’s sales jargon. Where did the extra f come from? Well, it’s not really clear. To make matters more confusing, it’s sometimes spelled “spiv” 😁.

What’s the difference between a spiff and a sales contest?

A spiff is a tool to meet sales goals in a short period of time by adjusting incentives, and it typically pays a cash bonus. A sales contest is a more playful tool to increase employee engagement, have some fun and encourage team work. It rewards employees or teams with prizes, like a trip, a gift certificate or playful IOUs from the manager, like singing karaoke or the boss doing cold calling for a couple days.

What are examples of a spiff?

Some simple examples of Spiffs are:

  1. A $500 cash bonus for each new logo
  2. A $500 cash bonus for each team member if the company beats its Q3 target
  3. An additional 1% commission on sales of a new product in Q4

What to consider when you use a spiff for your team?

✅ DOS: It’s important that you clearly define the goals, the time period and the reward upfront. Make sure to invest time in communication and explanation. Run a few what-if scenarios to make sure you know the maximum additional budget you need.

🚫 DONT'S: Don’t create spiffs that are hard to administrate. Don’t launch too many Spiffs at the same time, because you will pull your team in opposite directions. And don’t use a Spiff on a permanent basis – if you want to keep it, make it part of the compensation plan, so it’s easier for budgeting.

Good luck with your own sales spiffs!

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