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5 Tips For Running Better Sales Spiff Programs

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5 Tips For Running Better Sales Spiff Programs

It is great to see how many tire manufacturers have begun to leverage incentive programs by offering spiffs for front-line salespeople. However much we work to market and advertise products to our consumers, in many retailers it is ultimately the front-line sales person who controls which brands are selling best.  If you’ve been considering launching or updating a program for your brand, here's a quick run-down of valuable considerations when building your campaign to make sure your incentive dollars are having maximum effect (and ending up in the right hands!)

Customization Of Your Spiff Program

Obviously, the key objective of your campaign is to help you sell more products. Keep in mind however, that designing your program around your channel partners' needs is a key means to that end.  There are myriad factors to consider, but the more you can make your program suitable to your channel partners and their particular marketplaces, the happier you make them and the more effective your program becomes.  Ideally, you should be able to customize your program right down to dealer level. 

Fun fact: 99.3% of the front-line salespeople in our database say they prefer cash incentives over other rewards.  As one appliance SA in Nashville joked with my team, “People come to work to earn a living, not an inflatable boat.”

Process Visibility For Your Claimants

Speaking of meeting the needs of your channel partners, ask yourself this: do the people receiving the spiff have any way of knowing what the status of their claim is?  Visibility into the entire claim process dramatically increases the enthusiasm of salespeople for a simple reason: they can see that their claims are being received, correct any issues with the claim early in the process and see a clear path to when they should expect payment.   Delaying payment for incentives claims makes it very difficult for the recipient to associate your reward with the original action that they took to get the reward.  There is a great deal of research that demonstrates the increased difficulty our brain has linking cause and effect as the time elapsed between the two increases.

Some of the sales associates we deal with say that over 70% of their annual income is made up of spiffs, so knowing that the money is on its way is super comforting to these people.  If they feel like they're going to be waiting forever to get paid on your incentive program, faster-paying programs offered by others are naturally going to look more appealing.

Data Insights For Better Spiff Programs

When would NOW be the best time to start measuring the effectiveness of your sales spiff program?  All joking aside, it seems like a shame to wait until the end of a $60M campaign to have a look at what you could have done better if you could simply have measured and made adjustments in real time during the campaign.  Look at ways to constantly test and measure small tweaks that could end up triggering big bumps.

Spiff Program Cost-Cutting Measures

The true cost of program delivery is a decidedly unsexy topic, but it is absolutely worth your while to look at how much you are spending to deliver your spiff program.  Here are few quick things to look at:

  • Could you be paying by direct deposit or reloadable cards, rather than printing and mailing cheques? 
  • Could you be managing any of the data (especially audits!) using technology rather than people-power?
  • Could you be drawing insights from your claim data in order to help you plan ever-better programs in the future?
  • How much does it cost you every time you want to communicate to the front-line salespeople?  Does your channel structure even give you access to these important players?

Oh and here's another cost that is critical to consider when building your program: fraud.   We find that incidents of fraud in spiff programs can often be 4-5 times higher than the manufacturer's expectation at time of implementation.  Which brings us to our final tip...

Reduce Invalid Claim Payout

Perhaps fraud is a strong word and perhaps claims for the same sale may accidentally get submitted more than once from time-to-time, but one thing is for sure: you need to be on top of this.   Random fraud audits on a large incentive campaign with thousands of claims coming in are like hoping to win the lottery.   The best solution is to build fraud reduction right into the campaign.   That way, the right people are getting paid and only for the right transactions.  (Note: for more detail on reducing incentive fraud, download our free white paper Fraud: The Most Overlooked Opportunity) 

So there you have a high level view of some planning considerations when building your sales spiff program.  Enjoy the process and remember to think like the end user: how can you make your program more remarkable for them so that they are inspired to be and even better partner for you.

A lifelong technology entrepreneur, Jason Atkins is the founder and CEO of 360insights.  360insights is the world’s first Channel Success Platform, allowing brands to run spiffs, rebates, co-op/MDF, and sell-through allowances all processed and paid with 100% audit and powerful analytics to predict what to do next. For more information, visit: http://www.360insights.com.

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