For a manufacturer, building relationships with sales representatives in the channel is crucial. These relationships keep sales reps engaged with a manufacturer’s brand, and more importantly, motivated to push its products to customers. That is where SPIFF programs come into play.
SPIFFs are monetary incentives paid to sales representatives for selling a manufacturer’s product. In essence, a manufacturer uses a SPIFF to ensure its products are the first that come to mind for sales reps on the floor.
“SPIFF programs can have a significant impact on sales reps.”
It is a practice many companies use, but some manufacturers fail to leverage them properly. Often, sales reps are the least compensated players in a sales channel and that’s part of what makes a great SPIFF program so effective.
What makes for an effective SPIFF program
When managed properly, SPIFFs can be highly successful. However, to get them right, a manufacturer needs to become aware of the local market needs of the sales reps and make quick payouts. To customize a SPIFF in this way is to demonstrate to sales reps that the manufacturer wants to engage them.
The goal of the SPIFF program is to significantly boost sales, not to create just a slight bump over the status quo. To increase sales, a SPIFF needs to be managed in the right platform. For example, the 360insights platform provides advanced real-time data to measure a SPIFF program’s impact on the sales channel. That enables manufacturers to continuously update and revise programs as needed to ensure they meet sales reps’ needs on ongoing bases. With a universal dashboard, the 360insights platform also allows all partners in the sales channel to track claims and automates payments.
Knowing when payment comes
One of the most important value propositions of a good incentive management platform for a manufacturer is that sales reps know when they will get paid. Maybe the manufacturer does not offer more money than a competing brand, but a clearly defined payment schedule is a value proposition in itself.
Often, manufacturers will make SPIFF payouts at the end of a quarter. Depending on when a rep makes a sale, he could wait more than three months receive payment. That is an important aspect because sales reps rely on these sales incentives. In fact, many sales reps for 360insights clients report that SPIFFs account for almost 80 percent of their income. Naturally, any delays in payments from these programs can have a demoralizing and demotivational effect on sales reps.
However, when reps know when to expect payments from a manufacturer, the results can be dramatic. For instance, after Hurricane Sandy devastated the eastern seaboard, one of our client manufacturers was able to gain a significant sales lift through its SPIFF program as a result of them offering a special incentive program for reps in their channel who had been affected by the storm. This type of action shows that the brand cares for the people in the channel, and the 360 platform enabled the brand to deploy the special program in a timely fashion and to the benefit of all parties.
The damage affected many of the brand’s reps, who desperately needed money fast. As the manufacturer’s SPIFF program was set to payout three times per week, many of the sales reps began to push more of the brand’s product line to customers. So with clearly defined financial benefits, the sales reps sold more of the brand’s products, which made the SPIFF program a success. The SPIFF also strengthened the relationship in a powerful way, something that provided the manufacturer with a level of value that would not have existed without the right incentive management system.
Identify top performers
Perhaps just as importantly, the right incentive management platform like the 360insights allows a manufacturer to spot the best sales reps in its channel at any given time. That obviously helps the brand motivate top-performing sales reps with additional incentives, but the manufacturer can also identify SPIFF strategies that work. With real-time data analytics capability, a manufacturer can gain insight into the types of SPIFFs that work in certain locations to determine how to improve other regions.
These are just a few ways that SPIFF programs improve brand engagement among sales reps in a manufacturer’s channel. When managed in the right incentive platform, SPIFFs can ensure that all partners in the sales channel are engaged and motivated to sell a brand’s product line on the floor.