What is a SPIFF?

by: Mark Herbert January 6, 2020

What is a SPIFF? A SPIFF (also written as SPIF or SPIV) is a short-term sales incentive strategy where sales reps are awarded a small, discrete bonus for closing a sale or booking a demo. SPIFFs, unlike traditional sales incentives, typically have cash value. Today the most common form of delivery for a SPIFF is through reloadable debit cards. However, SPIFFs can also take the form of gift cards, select merchandise, or an incentive travel trip.

Manufacturers, distributors, and wholesalers use SPIFFs to award sales reps and channel partners at the point of sale. SPIFFs help manufacturers and distributors:

  • Increase sales for high margin products.
  • Move old inventory to free up space.
  • Accelerate adoption of new products.
  • Build brand preference with channel partners.
  • Give a boost to sales for a specific time period (to meet quarterly sales goals, for instance).

What Does SPIFF Stand For?

SPIFF is an acronym that can be defined as:

  • Sales Person Incentive Forms
  • Sales Performance Incentive Funding Formula.
  • Sales Performance Incentive Fund.
  • Special Performance Incentive Fund.
  • Specific Price Incentive For Final Sales.
  • Special Pay Incentive For Fast Sales.

The History of SPIFFs

The word SPIFF originally appeared in the Oxford English Dictionary of 1859, which defined SPIFF as: “the percentage allowed by drapers to their young men when they effect sale of old fashioned or undesirable stock." In 1890, the word resurfaced in the Pall Mall Gazette, in an article describing how London shop girls were rewarded for selling certain articles.

By the early 20th century, SPIFFs were common practice in wholesale and retail. It is believed that the acronym was most likely created sometime after 1930 to explain the origin of the word. Later, SPIFFs would have a major impact on Apple’s success in the PC market of the 1980s and 1990s.

How Have SPIFFs Changed Over the Years?

So how have SPIFF incentives changed since their origin in the 1800s? In structure, not much has changed. However, in execution, today’s SPIFF programs are very different. What changed? Digital transformation. Today, manufacturers, distributors, and wholesalers rely on software to empower their SPIFF incentive programs.

SPIFF software provides companies with the following benefits:

  • More detailed data and analytics.
  • More immediate reward delivery.
  • More intuitive sales-claims submission.
  • More accurate sales verification.
  • Automated communication with sales reps.
  • Ability to structure multiple, simultaneous promotions.
  • Fewer manual processes or opportunities for user errors.

Are SPIFFs Right For You?

To learn more about use-cases for SPIFFs, as well as the ethical and strategic implications of SPIFF programs, check out Sales SPIFFs vs. Long-Term Sales Incentive Programs.

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About Mark Herbert

Mark Herbert is President and CEO of Incentive Solutions. He has more than 30 years of experience overseeing business operations within the incentives industry, helping companies increase channel sales, build customer loyalty, motivate employees, and grow their business.