Sales Performance Incentive Funds (SPIFFs) are powerful tools for driving specific behaviors or outcomes in the short term. But they can also backfire if not designed and executed properly.
When to Use SPIFFs
SPIFFs work best for time-limited objectives: launching new products, clearing inventory, or hitting end-of-quarter targets. They should complement, not replace, your core compensation plan.
Design Principles
Effective SPIFFs are simple, achievable, and clearly communicated. The reward should be meaningful enough to change behavior but not so large that it distorts normal selling activities.
Common Mistakes to Avoid
Running too many SPIFFs simultaneously, making rules too complex, or failing to pay out promptly can all undermine your programs.