If your company is introducing new product, it might be tempting to consider changes to your sales compensation plan to get your sales team motivated to sell it. But changes to the comp plan are naturally disruptive to the team, especially mid year. A better option may be to roll out a SPIF — a bonus to encourage reps to sell the new product.
SPIFs can be good tools for motivating your sales team in a variety of scenarios, from supporting a new product to increasing your cross sell or upsell. But to be effective and return the maximum value for a company, SPIF programs need to be carefully implemented and managed.
Here are five tips to ensure a SPIF motivates reps for the best results.
1. Have a clear goal
Don’t roll out SPIFs without a well-defined objective, for both the rep and your organization. You won’t change sale reps’ behavior with a confusing SPIF. A SPIF should target a specific outcome tied to product events or market goals. For example, reps told they will make twice as much if they sell the new product or products from a newly acquired company will have a clear goal to work towards.
A common objective for many SPIF programs from the company’s perspective is sales linearity. Sales reps are offered bonuses for bookings early in the quarter to help the company achieve better consistency and avoid having all booking coming through at the end of the quarter.
Another common goal is get new sales reps ramped up faster. For example, a company may offer a new rep a SPIF if he or she closes a deal in their first 30 days.
2. Collaborate with sales managers
If you are in sales ops, run the SPIF past the sales management team, explain the rationale for it, and get their feedback. Since they’re out in the field, sales managers have insight into what incentives work and what’s happening in the market.
3. Make the business case for finance
A SPIF can’t happen without budget from the finance department. Justify the reason for a new SPIF by creating a business case based on historical and other sales data. Having objective data will help support your case.
4. Focus on communication
A SPIF program needs to be clearly communicated to sales reps in order to effectively drive behavior and the results the company intends. It’s important to provide communication at the launch of the SPIF to generate excitement and participation as well as tools that allow reps to track their performance.
5. Measure and track
Don’t wait until the program is over to measure its effectiveness. Periodically look at the SPIFF’s metrics and make sure it’s helping you reach your goals. Is it positively impacting your bookings or just adding to your expenses? Are reps taking advantage of the program? If not, it may be time to replace the SPIF with a new one. Analysis of the SPIF will help in designing the next program by providing insight into rep and customer behavior.
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