By: Grace-Emily Saati
When a company implements a spiff program, do they actually see their return on investment?
I’ve recently spoken to several large organizations about their spiff programs and what they really think about them. Most of the feedback I received can be summed up as falling under two categories:
“The sales people like it”
“We’re doing it because everyone else is doing it”
This is hardly the response I was expecting given that most of the organizations I spoke with spend tens of millions of dollars on spiff programs annually yet had nothing to say about a return on investment or an increase in sales.
Does it logically follow that spiff programs are ineffective?
Of course not; but in order to prove this it is important to gather data from the programs and parse that data in useful ways.
After probing these organizations further, I realized that most had no concrete way of measuring the effectiveness of their spiff program. They had no idea:
- Who the spiffs were going to (i.e. the individual rep, and how many spiffs that rep claimed)
- What products were associated with the greatest number of spiffs claims
- When spiffs are most effective (i.e. quarterly programs, weekly or daily spiff campaigns)
- Where the spiffs dollars were being spent (i.e. region, territory, dealer/reseller)
So the problem isn’t that the programs aren’t effective, just that these organizations have no way of correlating spiff dollars to tangible sales data to determine their effectiveness.
For companies who aren’t collecting this information and then interpreting it in a meaningful way, this is a major blind spot not only with respect to measuring the effectiveness of their spiff programs, but also when it comes to assessing the performance of their business as a whole. Most of the organizations I spoke to would leap at the opportunity to understand their business at that level of granularity.
Going back to our earlier question: “When a company implements a spiff program, do they actually SEE their return on investment?” SEEING, or Visibility into the Who, What, When and Where, are crucial in this analysis. If a company is going to invest in these programs, then they should also invest in tools that can measure the performance of these programs.
If it’s not obvious already, these tools can have a dramatic effect on any companies business, and would allow them to make better decisions so as to maximize their sales spiff dollars to achieve that desired bump in the top-line.
So, if the jury is still out at your company on whether spiffs work or not, having the tools necessary to meaningfully measure their performance, is the only way to find out.
Grace-Emily Saati is a Sales Channel Incentive Specialist with
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