SPIFS work! Sales incentives need to be strategic, compelling, and reward for the desired sales activity. SPIFS deliver measurable business results. If you get them right.
So if your SPIF program is not working, it's time to rethink and optimize. Here are common reasons sales incentive programs lose their momentum - and it can happen to enterprises that have been running programs for years to companies that have just launched a new initiative and find that it has stalled.
- Not attractive - your SPIFS – the dollar or point value earned for the target rewards - are not attractive.
- Low potential - the total dollars a rep can earn annually, selling your products is simply not enough. Example, one of our clients runs a program where channel partner reps can earn a few thousand dollars per year in extra income for selling the desired brand. Those same reps have opportunity to earn an extra $1-200 on another brand. It does not compete with the first brand, but it's not enough to get the rep's attention. Reps don’t like how they get paid. Example, most reps don’t want to carry a reloadable Visa debit card for a program that will load $25-50 several times a year, if they have access to another program that offers the opportunity to earn thousands in additional SPIF dollars.
- Administrative nightmare - the process for filing a claim for a sales SPIF takes too much time and the time delay in getting the claim approved is too long. One ‘knee-jerk’ reaction that some companies have taken is allow regional sales managers to purchase gift cards, and hand them out at their discretion for recognition of achievement in the channel. Once local partner managers start expensing locally sourced gift cards, you lose all ability to manage a company wide program, get the insights on what is really working and get deeper market data on the end users of your products.
- Lack of awareness - reps are not aware of all they ways they can make SPIF dollars selling your products. Reps get paid for the SPIF but don’t have the visibility to understand what they got paid for.
- Too complicated - too many terms and conditions, too many factors that can impact whether the rep will ever actually get paid. Example #1 Don't put a limit on the program’s payout. If there’s a cap on a SPIF for a specific promotion and reps in the field have no way of knowing how close the cap is to being met, you will not get the sales drive you want. Some might race to get their claims submitted early to ensure they qualify, but others won’t bother. And that final push you want to achieve the stretch targets – that won’t happen when reps are not confident they will get their rewards. Example #2 Tie the reward to unrealistic ship dates. Sure some products can be sold and shipped same day/next day. But other products that are higher value, more specialized (and more strategic in some cases) have longer order processing cycles. If you’re selling a product that generally ships in two weeks, than don’t set up a program that rewards sales reps for selling and shipping by month end. In that case they will stop selling on the 15th as any orders sold after that won’t be shipped until the next month. If that’s what you want – great. If you want the booked business, than reward on orders received right up until the 30th of the month and approve SPIF payments for those orders that ship by the end of the following month.
Those are five issues that are often at the root of an ineffective sales incentive and SPIF programs.
Want to learn more or discuss your specific scenario? Give us a call or schedule a demo of our software platform.
You may also want to read my earlier blog – Rethinking Channel Sales SPIFS - 5 Ideas to Maximize ROI
