The quarter is moving at a sluggish pace and the leadership wants to bring back the sales momentum. Your CRO/CFO has given a go-ahead to introduce a short-term incentive or Spiff program for your teams.

And it’s your role to design that SPIFF – The program that all of you hope will bring the mojo back and set you on the right track.

No pressure, buddy. We got this! Here’s a step-by-step guide to designing a winning SPIFF program.

Purpose of your SPIFF

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The first step is to determine the purpose of your SPIFF. While revenue growth is the ultimate aim, the exact purpose of your SPIFFs will fall under one of these three buckets:

  1. Promote the sales of a new product/plan or support the entry into a new market
  2. Promote an attribute which is not already covered as part of the commission plan (maybe a SPIFF to increase the ‘new logos won’)
  3. Push to achieve more on an existing attribute that is part of the commission plan (such as the top 3 reps with the highest sales in the quarter get the SPIFF)

Points 1 and 2 are good reasons to do a SPIFF. Point 3 – not so much. Ideally, you would want to weave point 3 within the existing commission plan by having an accelerator or bonus for overachievement/rewarding top performers.

Identifying the right SPIFF targets

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Now that you have determined the purpose, the next step is to set the right target. Let’s say you are trying to set a SPIFF on ‘new logos won’. You have to look at the baseline data (both for the previous period and the same time period last year). Compare the entire funnel (MQLs, SQLs, wins, no. of reps, etc) between these periods. Accordingly, determine what the Business-As-Usual (BAU) new logos wins are expected to be and set targets over and above that.

There are two ways in which you can set these targets:

  • One is by setting a line and saying that anybody who crosses the line gets a SPIFF.
  • Two, stack-ranking and saying that the top 3 folks get the SPIFF.

There is no one right way and each of them can be useful on different occasions. However, in general, I prefer option 1 as it gives a chance for everyone to win, as long as they are able to cross the line.

Identifying BAU is important not only for setting targets, but also to calculate projected ROI for the program and circle back once the SPIFF is over, to determine whether the program was successful or not.

Some fundamental rules to keep in mind

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  1. The length of the SPIFF should be short term (at the maximum a quarter). For sales SPIFFs, the length of SPIFF should be aligned with the length of the sales cycle period.
  2. SPIFF should always come out as a surprise to the team, meaning, it should only be announced on the day of the start of SPIFF period. If the teams know that a SPIFF is coming, there is a good chance of sandbagging in the previous term, which you want to avoid. Also, all of us like surprises, don’t we? So why not give it to your teams? On that note, do make sure there are no patterns like end of year SPIFFs, every year. People will guess it and it no longer would be a surprise.
  3. SPIFF as a program should be infrequent. Maybe about twice a year for a role. Not more than that. Remember, SPIFF is still something that is over and top of your commission plan. The commission plan should drive the core behaviours and alignment that you want and sufficiently incentivize your GTM teams. SPIFF is a quick way to get your desired short-term outcomes. If it becomes too frequent, then they’ll confuse teams on what to focus on as part of their roles. Anything in limited supply always has a higher perceived value.

During the program

Now that the SPIFF has been launched, make sure there is continuous communication and updates during the program period. Provide real-time scorecard visibility to keep the tempo upbeat throughout the entire period.

Post-SPIFF assessment

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Once you are done with the SPIFF program, look at the data and compare it with the BAU scenario. Did the growth in revenue happen according to plan or better? How is the RoI for the program looking?

This analysis will serve as feedback for your next SPIFF. Also, do collect feedback from your sales teams. Remember, apart from helping the company hit revenue goals, you want to make sure the team felt the program was fair, truly enjoyed competing, and look forward to the next SPIFF to hit it again out of the park.

This post was originally published on SaaSSales.io.