Many vendors use channel SPIFFs or SPIF’s (Sales Performance Incentive Funds) to influence behavior with their channel partner sales teams. But what are Channel SPIFFs?
A SPIFF is a short-term incentive, tied to driving sales in a set period of time. Channel SPIFFS can be dollar rewards, prizes, or loyalty points, but they all are aimed at one thing—driving your sales.
Partners have lots of choices as to which vendor’s products to sell in competitive situations. Beyond technical differences which may be minor, how do you best drive your channel partners to position your products versus the competition? Over time we’ve found the following 3 steps to be key in launching and managing successful SPIFFs.
1.Understand the Target Audience
Tailoring of the Channel SPIFF will be dependent upon the target audience—is it a team (i.e., a sales floor) that loves to go out together and take advantage of the incentive they received for collectively hitting a daily sales goal? In that case, food and beer coupons will work perfectly fine. Or are they individuals in different parts of the country and/or world that will respond to prize catalogs based on loyalty points? Great SPIFF programs will also have a loyalty component to motivate sales reps to stick with a particular vendor.
2.Get the Product or Product Mix Right
Once the audience is defined, then it’s critical to figure out if the product itself is priced correctly to compete, or whether it needs additional items like service and support in combination to be compelling enough to carry the day.
A simple best practice in setting up an effective SPIFF is to talk first to the partners most likely to sell your product if an incentive is included. Find out which products or product sets best lend themselves to benefitting from the push a SPIFF can provide. Talk to your partners about what has worked best for them in the past, and learn from them as to what you could do better.
3.Communicate, and Measure Results
Once you’ve figured out the right SPIFF for your channel, ensure its communicated well to all your partners. After all, if your partners aren’t aware of the SPIFF program, all your efforts will have been in vain. Once up and running, ensure you have a way to measure the impact it’s having with your partners. This can be done using internal processes and manpower or again through the use of 3rd party SaaS vendors who specialize in this field. Monitor results to ensure success.
Channel Mechanics is one SaaS provider with extensive experience in designing and implementing channel SPIFFs. If you ‘d like to learn more about how Channel Mechanics optimizes vendor SPIFFs in a closed-loop cloud-enabled environment, we’d be happy to customize a demo here