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What in the world is a SPIFF?!

December 3, 2021

Literally speaking, a spiff is an informal American word that means something or someone that looks stylish, attractive, or pleasing. A black leather jacket on a casual dinner, for instance. But we don’t talk about style. We talk about sales, right?

Well, there’s a SPIFF in sales, too. The acronym SPIFF meaning Sales Performance Incentive Funds. Just imagine that black leather jacket, and you, as a salesperson, make it look so spiffy (the literal one) that someone purchases it; hence you make a sale, earning yourself a SPIFF. I other words, you get an incentive for closing a sale of that spiffy jacket!

Okay, let’s break it down a little more. A SPIFF is typically something that companies and brands pay to their sales reps when they perform well at their job. It isn’t a part of a basic salary, which everyone gets. Instead, a SPIFF is something that companies award individually to their sales reps provided they perform exceptionally well at closings, or are able to book a demo or succeed at pretty much any other profitable activity that involves profitable sales.

What Does a SPIFF Look Like?

A SPIFF can take the form of any incentive that you, as a manufacturer, may pay to a salesperson who more than just a decent job. SPIFF compensation is most usually in the form of cash, credit, or cheques. However, some manufacturers, owners, or executives may also award SPIFFs in the form of reloadable cards, gift cards, merchandise presents, or even incentive-based travel trips. 

Basically, SPIFFs can be any reward or token that has a monetary value. It can be hard cash; it can be a product, a free service package, a subscription, a development opportunity, an educational opportunity, or anything that offers an immediate incentive to a sales representative who rakes in the big bucks for the company in which they’re working.

Does My Company Offer SPIFFs?

Just like there’s a variety of SPIFF-able incentives, there’s also a variety of the term’s acronyms. You may already know what a SPIFF is and may have also been on its providing or receiving ends if you’re familiar with any of these alternate acronyms:

1. Sales Person Incentive Forms

2. Sales Performance Incentive Funding Formula.

3. Sales Performance Incentive Fund.

4. Special Performance Incentive Fund.

5. Specific Price Incentive For Final Sales.

6. Special Pay Incentive For Fast Sales.

How is a SPIFF Different From a Bonus or a Raise?

Let’s be clear here. A SPIFF is never a part of the basic salary, i.e., something that each one of the employees will receive equally according to their job description and regardless of their performance.

A bonus is where almost all employees working the sales get some form of relief in addition to their salary for all their hard work. Bonuses might vary from employee to employee, but they’re nearly as commonly handed out as salaries.

A raise is a formal way of changing one’s job status to a higher one along with an increase in either the basic salary or bonuses or both. With a raise, the whole nature of the job changes, and it isn’t as commonplace as a bonus or as regular as a salary.

A SPIFF stands out from all these formal terms and monetary returns in that the only criterion for earning a SPIFF is performance par excellence. No matter what the job is or what salary, experience, or bonuses it entails. A SPIFF can be given to anyone who catches a big fish for the company. Unlike the other three, a SPIFF isn’t something planned or scheduled. Whenever a sales employee performs well, they’re likely to earn a SPIFF!

Who Should You Give a SPIFF To?

Before you begin ticking off the list of all employees who made a sale in the past week or so, just be clear; not all employees would necessarily qualify for a SPIFF. SPIFFs are something that requires a bit of calculation and contemplation before you dish them out for your employees. If we think that excellence is the criterion for awarding SPIFFs, then whose excellence or progress do we envision? Our own? Our senior staff’s? Or that of those who work on similar employment levels within the sales framework?

There are no specific rules here. It’s preferable not to award SPIFFs to anyone and everyone who makes a sale, but instead, you may look at the employee’s own performance improvement to figure out if they deserve a SPIFF for the specific high-performance duration or for an exceptionally well streak of sales!

What is the Purpose of a SPIFF?

This may help you further understand who to award a SPIFF to. So, the idea behind awarding a SPIFF is to acknowledge the efforts and results of the sales rep’s performance, and at the same time to motivate that rep to continue with this performance. It is also to encourage and motivate others to perform better in order to secure their own SPIFFs. With that said, you may identify three types of employees in any company who may or may not deserve SPIFFs based on their performances. These include:

1. The Draggers: They’re the ones who appear steadily unmotivated and usually do not bring much to the table when it comes to boosting sales or building new sales strategies.

2. The Gems: These are the ones who remain motivated for the cause of their own career aspirations, which may not always involve incentives. They not only bring in the most massive sales, but they also encourage others to play their part.

3. The Bulk: Somewhat focused and motivated, but not exactly the gems of the crown. They’re usually the majority of employees in any organization.

Now, depending on these types of employees in any typical sales team, you may be able to figure out who to give incentives to. Whoever you choose, just ensure that the end goal you achieve is a maximized motivation and dedication to achieve more and better sales!

How Should I Pick the Right Time to Hand Out SPIFFs?

Once you’ve picked your SPIFF recipients, it’s time to answer the next big question: When to award a SPIFF?

Here are a few occasions on which SPIFFs might be beneficial:

1. Near Audits

If you want to hit a target for your sales or want to achieve a quarterly or yearly goal, setting up SPIFF rewards might help boost your sales. Those who are vying for the rewards will work harder to secure their SPIFF, hence more effective sales closings and better audit results!

2. You Want a Sales Boost

If there is no specific target to meet any time soon, your sales reps may feel a bit lazy, hence affecting your sales. If you want to see an instant boost in their performance, it’s best to offer some incentives.

3. With Growing Competitions

If there’s a new product contending with your own, it can be difficult to maintain a successful sales repute. As the competition grows tougher, you’ll want your staff to work harder to keep up your sales records and stop your competitor from breaking them. In this case, too, sales incentives come into play by engaging your employees in a reward-based work strategy.

4. Launch of a New Product

Want to build your brand image with a new product? Your sales reps are the torchbearers of that image! You need your sales representatives to amp up their performance so that the new product isn’t a flop. For this, they’ll need to work on their closing techniques and demo securing. A SPIFF, in this case, would be perhaps the most motivational way of getting your salespeople to build a positive brand image!

5. Clearing Your Inventory

Getting an old item to sell is just as hard as getting a new one to sell. You may set up a clearance sale, offer freebies, or use any other sales technique, but that will still leave behind a few leftovers that may need your staff’s special efforts. When these couple of products are left on the shelves or in your inventory, they can be harder to sell because they simply don’t garner enough attention.

So whoever manages to pack in a few sales on those hard-to-clear leftovers surely deserves a reward for it, right? Well, a SPIFF in this situation can also help you out. You may designate a few SPIFFs for all those who can siphon off those remaining items from your inventory during your clearance periods!


Getting your sales team to stay motivated in rapidly changing market environments is a pretty hectic job, mainly because their job, in return, is just as hectic. In this case, a series of short-term rewards, whether monetary or a monetary substitute, can work really well in keeping your employees motivated to strive further.

SPIFFs offer that exact kind of acknowledgment and reward to your most deserving workforce and encourage them to keep up their good performance!

Put those insights into practice.

Set your team up for success by improving their performance through gamification.

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