The art and strategy of spiffs: 9 best practices for driving revenue with precision

Keeping your sales teams motivated and aligned with company objectives is a perennial challenge.

And one of the most effective tools at a revenue leader or sales compensation manager's disposal is the spiff (a sales performance incentive fund).  

These short-term incentives can be a great way to achieve specific business goals— whether it's moving inventory in B2C, speeding up longer sales cycles in B2B, promoting a new product, or re-energizing sales generally.  

But spiffs must be wielded with care and finesse.

Unfortunately, some go-to-market teams earn a reputation for leaning on spiffs as a crutch to make up for lost ground. But the more your sales team comes to expect this type of incentive—it can damage its efficacy. Or worse, a spiff can be poorly set up, communicated too early, or not move the needle despite all the upfront effort to launch it.  

The best organizations have foresight into spiff planning and use this incentive as strategic revenue lever that can be pulled, measured, and reported on as needed.  

To help with your incentive strategy, we called on Christina Straggas, the Head of Global Sales Compensation at Equinix, and Maria Oczko-Canant, Head of Global Sales Planning, Compensation and Performance Analytics at Workiva, for their deep career expertise on:  

• The characteristics of spiffs they've seen work especially well

• Data-driven spiff design (components, timing, etc.)  

• Best practices around spiff execution/rollout, and 

• Measuring spiff effectiveness or ROI

You can watch their full session on-demand, or read on for their insightful takeaways below.

The essence of spiffs

If we return to their intended purpose, spiffs are designed to ignite a quick spark in your sales force; they offer a burst of motivation based on rewards ranging from cash bonuses to luxurious experiences.  

Unlike traditional commissions, which are steady and ongoing, spiffs are about immediacy and impact. You can think of a spiff as giving your sales team a shot of adrenaline, propelling them towards targets.  

But it's not only about the reward—it's often about the thrill of the chase, a competitive spirit, and the sense of accomplishment (and critically, recognition) that comes with hitting this well-defined goal.

As our two experts put it at NUDGE 2024, a spiff should be:  

• Very targeted to motivate a sales team to achieve a specific goal, aligned with broader organizational goals. Whether it’s pushing a new product line, entering a new market, or clearing out older stock, the objectives should be clear and compelling.

• Short term and timed well: Spiffs should be used sparingly and strategically, ensuring they remain a surprise. The unpredictability is crucial; you want to avoid complacency as it dilutes effectiveness entirely.
  

• A stretch goal that's not guaranteed (it's intended to boost results beyond a normal expectation).

Another aspect of effective spiffs both Maria and Christina emphasize, is that you should use spiffs to complement—not duplicate—your core compensation plan. Every spiff should enhance elements of a comp plan, but if a certain behavior or outcome is already covered, your spiff needs to focus on driving additional or complementary results.

For example, if your comp plan rewards bookings already, a spiff could focus on closing deals faster or increasing the adoption of a net new product.

There are also some ground rules to consider around how many spiffs you have for various roles at one time, considering spiffs are just one part of your overall compensation budget.  

Here's Christina's take:

How much of your budget should be allocated to spiffs?

A successful spiff example

So what types of spiffs have our compensation experts seen run especially effectively?  

Maria mentioned a spiff for building pipeline health—sometimes called a "pipeline blitz" or "prospecting blitz."

Maria's compensation team at the time formulated this spiff to reward both individual achievements and team success. Involving inside sellers, the biz dev team, and account executives, the spiff was designed with targeted goals at the pod-level (a small focused group within the sales team).

What was key here, is that the business development and account reps could earn individual rewards for their contributions, but there was also a larger, overarching team goal. If the team hit certain numbers collectively, they would earn an even bigger reward.  

Why was this prospecting blitz spiff example such a hit?

• This incentive structure worked well because it not only motivated individuals but also encouraged teamwork, which led to better overall performance and a healthier pipeline. Further, it had a targeted goal from the start (something with a baseline Maria and team could accurately track): improving pipeline health.

• It also generated a lot of excitement and engagement because the company could create a more substantial prize rewarding multiple team members.

A poorly executed spiff sales example...

Despite best intentions, some spiffs still don't work out as intended, or can even have unintended consequences in practice.  

Maria shared a situation where an organization introduced a spiff with the goal of crushing quarterly numbers. The directive was to pay anyone who got over 100% of their quota extra compensation.

Before the spiff started, the comp team had estimated that about 21 or 22 sellers would hit over 100% on their own, based on our pipeline health and the maturity of the deals. But, by the end of the spiff period, only 18 or 19 sellers hit over 100%, which was fewer than initially projected without the spiff.

All the same, the company ended up spending a lot of money, but didn’t get the additional sellers over 100% that they'd hoped for. In fact, the company paid about 3% extra in compensation, without seeing an increase in the number of high performers. The spiff example in this case didn’t drive the intended behavior—it ended up costing more and delivering less.

Why this spiff example went wrong:

1. Double payouts: The spiff was structured such that sellers got additional money for achievements they were already being rewarded for through their existing comp plan (accelerators for exceeding 100% quota).  

2. Unrealized expectations: The spiff was expected to increase the number of sellers who exceeded their quota, but actually resulted in fewer sellers hitting the target than initially projected without the spiff.

This example highlights the importance of aligning spiffs with clear, incremental goals and ensuring that the structure of the incentive truly motivates the desired behavior without redundant payouts.

Now that we've covered some examples of spiffs in the wild, how should you best design your components, timing, and more?  

9 best practices for crafting and deploying the perfect spiff

Creating an effective spiff is both an art and science. The incentives must be enticing enough to motivate but not so extravagant that they break the bank.

Cash is a common choice, but we learned during Maria and Christina's session that non-cash rewards often have a more lasting impact; imagine the allure of a weekend getaway, a high-tech gadget, or even a unique experience like a cooking class with a renowned chef? These rewards create memories and stories that go beyond a simple financial gain.

Below are some of the best concrete takeaways from the live session:

1. As a leader, be strategic about approving spiffs amid competing priorities

Because you have limited budget to allocate to this type of incentive, you'll want to ensure you have a strategic seat at the table when ideas for spiffs are being considered. This to not only evaluate each spiffs proposed ROI and relevance, but also ensure administration or operations are considered early on.

Before agreeing to create a spiff, assess whether it will truly drive the desired behavior and deliver a meaningful ROI. If Marketing or Product's proposal doesn't align with the overall business goals or if the timing isn’t right, it's important to say "no" or "not yet" rather than proceeding with something ineffective or distracting.

Here's what Christina Straggas advises around sharing your standards or tenants with the rest of the leaders you work with:

By strategically saying "no" or "not yet," you maintain focus on high-impact initiatives, avoid unnecessary costs, and ensure that when spiffs are launched, they're set up for being able to pay out on a given metric, are trackable, and align with the broader goals of the organization.

One consideration Maria mentioned is to avoid overwhelming the sales team with too many spiff running at once. Prioritize the initiatives that will have the greatest impact and be willing to decline or postpone additional spiffs that could dilute focus.

2. Involve all relevant stakeholders in a spiffs' development

Related to the point above, when designing a spiff, involve all relevant stakeholders from the start. This includes sales leadership, marketing, and sales operations, to ensure the SPIF is well-rounded and executable.

Involve your operations team early in the planning process to ensure data accuracy and smooth execution, and bring in marketing to align messaging and timing with broader campaigns or enablement efforts generally.

Speaking of enablement...

3. Anticipate and address challenges sellers will face

Before launching a spiff, take the time to thoroughly understand the sales process from your sellers' perspective. Identify the specific hurdles or challenges they might encounter in achieving the spiffs goals whether it's market conditions, product knowledge gaps, or internal processes.

The criteria for earning the spiff must be clear and attainable. Ambiguity can lead to confusion and frustration, undermining the very motivation the spiff is supposed to inspire. Transparency in eligibility and objectives is key to maintaining trust and enthusiasm within the team.

Christina emphasized the importance of understanding what hurdles your sellers might have to jump through to achieve a spiff.  

Ultimately, tailor the spiff accordingly: remember any spiff is designed to be achievable, with rewards proportionate to the effort required. If a product is particularly difficult to sell, consider offering a higher incentive or providing additional support, like training or marketing resources, to help sellers overcome challenges.

Maria also recommends consulting with trusted sellers to see if they believe a given spiff is achievable and will drive the intended results.

Ask them if they believe the spiff is achievable, motivating, and aligned with their current sales motions. Their insights can help you identify potential issues, gaps, or unintended consequences before the spiff is rolled out broadly. If the feedback indicates the team isn't ready, she advises holding off until the conditions are right.

If there are gaps in product knowledge, market conditions, internal processes, marketing support, or otherwise, it can be better to delay the spiff until these issues are addressed.

By understanding and addressing potential hurdles, sellers will feel supported and confident in their ability to achieve the goals, leading to better participation and results.

4. Ensure the spiff is achievable and motivating

Although our experts agree, even as an incentive intended for results above and beyond the usual, spiffs should be challenging yet achievable.  

It's key to set realistic targets within reach for your sales team, and avoid creating incentives that are too difficult or too easy to earn.

If you notice that no one is on track to achieve the spiff on your leaderboard, consider adjusting the criteria and guardrails (they could be too tight).  

You'll also want to watch that spiffs don't require so much attention that take a seller's eye off the ball for quota attainment generally.

5. Aim for a balance of proactive and reactive spiffs

Both of our panelists recommend to mix up your approach to spiffs, using them both proactively and reactively depending on your situation.

As Maria shared, if you run a reactive spiff, the key is to still ensure some work involved for the seller (vs. lowering quotas or issuing extra payouts or draws in a down market).  

For instance, if a seller can go over-and-beyond in a sub-set of the portfolio (when you may be past the point of no return on the full portfolio), they can gain the associated reward. A reactive spiff should still make someone work for the reward or have an expectation beyond a typical result.

On proactive spiffs, Christina urged us all to consider peaks and valleys in your businesses' annual calendar and how you could most influence these. For instance, in industries with seasonality, what might you do with a spiff designed for specific months when purchasing is expected to pick up? Think about this at the start of your annual planning and how you might ensure revenue over the course of the year with your limited spiff budget.  

6. Consider non-monetary rewards for spiffs, like meaningful recognition

While monetary rewards are effective, don’t overlook the power of non-monetary incentives, such as recognition or exclusive opportunities. These can have lasting impact.

As Christina shared, you'll always have outlier performers (top and bottom), so focus on significantly shifting the behaviors of those in the middle. When you elevate this population of sellers, this swings your momentum positively.  

As Maria shared:

"One time, we ran a contest where the top-performing reps got to present their winning strategies on a large company call. This was a non-monetary reward, but it was really powerful because it gave those top sellers a platform to showcase their talents and how they achieved the spiff.

This opportunity to present in front of their peers was highly valued. It allowed other reps, especially those who might be mid-level, to learn from their success. The recognition was meaningful, and it helped spread best practices across the team, elevating overall performance.

Make sure you're offering top performers the opportunity to present their winning strategies to the team, or provide access to exclusive events or meetings.

7. Prioritize clear, consistent communication (it's key) 🔑

To ensure a spiff is well-understood and embraced, clearly articulate its objectives, eligibility criteria, and rewards. Collaborate with the sales leaders to co-create excitement and transparency around the spiff and it's tracking/leaderboards/administration from the start.  

In its public communication, detail how the spiff aligns with overarching business goals and what sellers need to do to win.  

Remember to:

• Provide regular updates and reminders throughout the spiff period help keep the incentive top-of-mind and motivate participants to stay engaged.  

• Post-spiff, communicate the outcomes for the business to not only reinforce the value of the spiff but also encourage the related behavior long-term.

• Ensure sellers know whenever they're seeing a payment on a spiff on their pay check that it's for the outcome they drove. This helps you capitalize on the programs you're implementing as much as possible.  

And on the topic of communication...

8. Be strategic about timing and announcements

Be sure you carefully consider when and how you announce spiffs to avoid unintended consequences, such as sales reps delaying deals to qualify for the incentive.  

For product launch spiffs, align the announcement with the marketing rollout to maximize impact, but avoid announcing too far in advance to prevent gaming the system. You don't want deals to be potentially delayed due to the timing of a potential spiff.

9. Limit the number of simultaneous spiffs

Avoid overwhelming your sales team with too many spiffs at once. Keep the number manageable to ensure focus and prevent distractions from their core responsibilities.

As a rule of thumb, limit active spiffs to two or three at any given time and make sure they target different aspects of performance or product focus.

On evaluating the impact of your sales spiff

As with any component of compensation, no spiff should be set-it-and-forget-it.  

Continuous monitoring and post-campaign analysis or retros are vital. Did the spiff drive the desired behavior? Was the financial outlay justified by the results? The insights gained from this evaluation can inform future spiffs, making each one more effective than the last.

On this, monitor spiff performance regularly

• Track the performance of your spiff throughout its duration. Don’t wait until the end to assess its impact. If the spiff isn’t driving the desired behavior, be ready to adjust or discontinue it.

Analyze ROI

After the spiff concludes, compare the sales performance before, during, and after the spiff period to assess impact. Use these insights to decide whether similar spiffs should be part of your long-term comp plan.

• While a spiff shouldn't be used to duplicate any part of your core comp plan, it can eventually evolve to become or replace a component of the core plan should it be deemed effective enough or a behavior you want to put on repeat the long-term.

Go forth and (thoughtfully) incentivize

As Christina and Maria shared, spiffs, can no doubt inject energy, foster a competitive spirit, and align individual efforts with company-wide goals, but, like any incentive, they must be managed carefully to avoid potential drawbacks, such as fostering a culture overly focused on short-term results.

In the end, the success of a spiff lies in its design and execution. It’s about more than just offering a bonus; it’s about creating a compelling narrative, a challenge that excites and a reward that resonates.

Done right, spiffs can be a catalyst for remarkable achievements and a testament to the power of well-timed, well-targeted incentives.