Executing a Successful SPIF

Executing a Successful SPIF
BEST PRACTICES, TIPS,
AND TECHNIQUES

SPIFs are a great way to generate enthusiasm and mindshare, promote
market adoption of a new solution, incent the sales of a specific
combination of products, or even to reward soft skills development.
However, execution is where most programs fall short of success. This
ebook will help you to sidestep the pitfalls and provide useful and
practical advice to start a SPIF program and/or helpful tips to improve
under-performing SPIFs.

eBook from CCI: Channel Management Solutions

CCI eBook: Executing a Successful SPIF
2

Contents

3............. Defining “SPIF”

6............. SPIF Challenges

8............. Best Practice #1: Design a SPIF Program Versus a Single SPIF

13........... Best Practice #2: Optimize Your SPIF Design

14………… Six Tips & Techniques for SPIF Design

19........... Best Practice #3: The Value of Registration

22……..…. Best Practice #4: Measure Program Success

24………… Summary

www.channelmanagement.com

3 Defining “SPIF”
Where We Are In the Incentive Landscape


4

The Classic SPIF (Sales Performance Incentive Fund)
Sales incentives can be divided into two main types:

Targeted at the
1 individual

Targeted at the
2 partner entity

The first is where the classic SPIF sits. Individual sales incentives typically:
 Are focused on the sales rep or sales engineer
 Have the core objective of influencing point-of-sale
 Have program timeframes that can be shorter or longer term

This eBook focuses on the most common types of individual sales incentives and their key attributes.


5

Incentive Programs Targeted to the Individual
Title Definition Attributes
SPIF  Provides guaranteed rewards to  Usually short-term
participants for accomplishing a  May be quickly deployed
particular action  Requires re-launch of every program
 Example: “Sell X, get $Y”  Can tailor for different audiences (SEs/SRs)
 Difficulty forecasting payout
Loyalty  Designed to build long-term  Rewards are often cumulative in nature
mindshare and relationship  Longer term
 May be designed to reward a variety  More robust infrastructure required
of behaviors  Can “follow” participant
 Example: “Sell X, do Y, to earn points
toward Z”
Contest  Rewards that have an element of  Subject to local laws
chance  Good for driving mindshare, individual/team
 Example: “Sell X or do Y to qualify for motivation/excitement
winning Z”  Short or long term in nature
Rebate  Drive product sales through temporary  “Instant” or “mail-in” are the most common
price decreases  Short term
 Gather consumer info, promote new  Trade-In or Trade-Up program (rebate may go
products to partner or consumer)
 Example: “Buy X, get $Y discount or
rebate”

6 SPIF Challenges
Common Pitfalls of SPIFs


7

SPIFs are certainly among the simplest and easiest sales incentives to deploy, however this can often be
their downfall. When we talk to clients about SPIFs, it is common to hear about a lot of challenges.
Some common frustrations about SPIFs:
 “Here today, forgotten tomorrow” – no ongoing engagement is derived
 Constantly have to invent new programs and manage unique processes for each
 Narcotic in nature – the more you use them, the more they seem to be needed
 Viewed as an entitlement versus a bonus or reward
 Hard to target the right people – partner principals do not allow for individual-level SPIFs run by
vendor
 Difficult to predict payout needed as well as participation
 Hard to measure impact/ROI – understanding that SPIFs are most effective in attaining goals

The remainder of this eBook will address the above
frustrations with some tips and best practices for
implementing successful SPIFs.


8 Best Practice #1
Design a SPIF Program Versus a Single SPIF


9

While SPIFs have the benefit of being easy to deploy, that very aspect can result in a lack of longer-term
thinking around them. While SPIFs themselves are best used for short-term initiatives, when designing a SPIF
one should not just look at the immediate result or action you want to influence, but at the broader and
longer-term needs of engaging with the particular target individual (sales rep, sales engineer, business owner,
etc). Vendors are typically engaging with the targeted audience between four and ten times per year. Given
this statistic, a “programatic” versus multiple “one-off” approach is called for. This leads us to…

Best Practice #1: Design the Program First, Then the SPIF

Program
SPIF

SPIF


10

There are a couple benefits to this approach:
First, creating a program will provide you with a framework where individual SPIFs can be deployed. Having a
framework addresses the second frustration – constantly needing to invent new programs and manage unique
processes for each. A programatic approach allows for core processes to be outlined at the outset (and
hopefully automated) so that the “invention” can be focused on the “do-get” proposition, not on
administrative processes.
Second, the consistency of a program framework in which to deploy SPIFs will allow you to develop an
ongoing engagement with your target audience (addressing that “here today, forgotten tomorrow”
frustration), and gather consistent data on where and with whom SPIFs are working and/or not working.


11

Determining Program Objectives
The first step to designing an effective program is to think about what types of actions/results you are
trying to achieve with your target audience over a minimum one-year timeframe. Is it all about
quantitative goals? Number of unit sales of a certain product, average order size, volume sold of a new
solution? Or are there also more qualitative goals, skill/knowledge improvements, customer satisfaction
scores?
Finding the Sweet Spot Corporate
Sales/
Once your list of objectives is clear, review them through Marketing/
the lens of how they align with your corporate strategy, Channel
customer needs, market environment, and partner strategy. Strategy

Given that you are targeting individuals who are most
Customer
influential at the point-of-sale, understanding partner Partner Your Purchase
strategy (GTM, Business Goals, SWOT, etc.) and that
individual (goals, needs/wants, strengths, weaknesses,
Go-to-
Market
Program Process

etc.) are the key. Strategy Objective(s) Ongoing
needs
Going through this exercise will help you fine tune your
program objectives and insure you have found the
“sweet spot” for optimal success. Environment
Competition
Geography


12

Processes and SPIF
With your objectives clear, you can now
determine the processes you need to support
the types of SPIFs you’ll deliver. In most cases,
a sales incentive platform or system that
automates capture, review, and reporting of
participants and SPIF-related data is a good
investment to support your program.


13 Best Practice #2
Optimize Your SPIF Design


14

Now that you have program framework with your objectives, let’s explore how to
optimize the actual SPIF design. Here are Six Tips & Techniques for SPIF design:

1. “Short-term” Definition – A common mistake made by many channel
professionals rolling out SPIFs to an indirect channel is to plan the timeframe
for the SPIF in the same way they would for an internal sales audience. A SPIF
that would typically run for days or weeks with an internal audience should run
for months or quarters in the channel. While familiarity with an ongoing sales
incentive program will allow you to shorten timeframes in the channel, in
general “channel noise” requires more time for a SPIF to gain mindshare and
traction. Secondly, consider the timeframe in relation to the action requested.
A SPIF related to the introduction of a new solution is going to require a longer
timeframe than a SPIF whose goal it is to get old product off the shelf before
the release of an upgraded model.

A SPIF that would typically run for
days or weeks with an internal
audience should run for months or
quarters in the channel.


15

2. Focus on First-Time Behavior – SPIFs are best suited to incentivize first-time or
one-time behavior, as opposed to ongoing behavior. Ongoing behavior is best
targeted by your other compensation structure with your partner (percentage
of product discount, MDF/Co-op offering, rebates, etc.) SPIFs are most effective
when they are reserved for first-time behavior and used with some
moderation. This helps maintain a high-energy/high-effort/high-result
perception of them, and prevents them from becoming narcotic in nature or
viewed as an entitlement.

SPIFs are most effective when they
are reserved for first-time behavior
and used with some moderation.


16

3. Get Organizational Buy-In – It is key to get (and create) buy-in for
your SPIF with partner organization principals. Too many SPIFs that
have not taken a partner’s GTM strategy and goals into account have
resulted in the reluctance of the partner organization to allow the
SPIF to run with their sales team. A trend we are seeing is for
individual SPIFs to tie into to partner/entity-level sales incentive
programs.
4. Getting the “Do-Get” Right – Given the shorter timeframes, the “do-
get” proposition needs to be simple, clear, and compelling. Based on
your goal, determine if the reward structure should be a per unit/per
action basis, or hitting a certain volume. What is going to be more
enticing? What is going to best align with your goals? Second,
consider the reward itself. Is it cash, merchandise, or travel? Is it the
same reward for all, or is it a points-based access to a variety of
choices? (See the following page for some reward pros & cons.) Lastly,
a crucial part of creating your “do-get” scenario is to determine the
specific metrics needed to measure progress towards your goal,
establish your current baseline, and do the cost/benefit analysis on
your SPIF.


17

5. Effective SPIF Marcom – Key to your design is your marketing &
communication plan. Communication of the WIIFM (What’s In It For
Me) message to the sales reps needs to be clear, compelling, and
engaging. Also, don’t neglect to consider any materials or tools that
will support the sales reps’ execution efforts in the field with end-
customers.
6. Drive Ongoing Mindshare – Lastly, don’t put all your efforts just into
the launch of a SPIF. Ongoing engagement is as important, if not more
important. Provide progress updates, share success stories, use a
leader board to encourage friendly competition, etc., to keep the SPIF
goal and reward top-of-mind through its lifecycle.

The "What’s In It For Me" message
to the sales reps needs to be clear,
compelling, and engaging.


18

Reward Options: Pros & Cons
Pros Cons
Considerations:
Cash  Directly impacts bottom line  May have limitations in global
 Good for short-term programs markets
 What is the “do-get” with limited infrastructure  May be considered part of regular
proposition? requirements compensation, less of a long-
 Easy to communicate lasting impact
 Cash versus points?
Reward Cards  General high appeal due to  Infrastructure more costly due to
 Evaluate in relation to branded card in-wallet card printing and distribution costs
main compensation  Reloadable cards are ideal for  Depending on churn, new card
long-term programs issuance can be costly
structure – high enough
 Fixed value cards are more  Global programs may have
for interest, not so high suited for short-term limitations due to distribution
as to distract from programs and/or exchange rates
primary goals  Offered by majors: VISA, MC,
AX are valid anywhere
 Do the math – what is
your investment Travel/  Trophy/lifestyle are highly  Program’s appeal is largely driven
valued prizes by reward options and perceived
compared to your Merchandise  Allows program managers to attainment ability
return? establish tiers that create a  Global programs may have
stretch goal for participants limitations due to distribution or
 Can have longer mindshare local tax codes
impact for participants


19 Best Practice #3
The Value of Registration


20

An automated software system or platform is helpful in supporting program operations and
reducing administrative costs. It will help streamline processes and make data capture (or
integration) far easier. Another benefit of automation is that it makes it much simpler to
include registration as part of your SPIF deployment process.
There are a number of key benefits to the inclusion of registration as part of your standard
SPIF process, including:
 Adoption Monitoring
Requiring individuals who are going participate in a particular SPIF to “opt in” through
registration is a great way to get an understanding of the SPIF’s appeal (or popularity)
with your target audience. Having this insight early on will allow you to forecast outcome
(spend, administrative support needed, etc.). If registration levels are too low, it allows
you to evaluate whether the program’s “do-get” proposition needs to be adjusted or if
marketing communications needs to be increased.

Having this insight early on will
allow you to forecast outcome.

21

 Getting to Know Participants
A second benefit of registration is that it allows you to capture profile information about
participants and, over time, get an understanding of who the top performing individuals
are, develop a relationship with them, and target them for specific initiatives.
 Mindshare
Lastly, including a simple “opt in” registration is a great way to ensure that you are paying
individuals you’ve gained some mindshare with around the SPIF versus those who just
happened to have performed the action/result you’re rewarding.

22 Best Practice #4
Measure Program Success


23

Evaluating Program Success
As previously noted, standardizing the process and method of data capture (and use in the case of a
claimless approach based on POS data) are the key to being able to measure impact and, ultimately, ROI.
Below are three important methods of evaluating program success:
1) SPIF Performance Versus Goal
Assuming your goals were established at inception, an assessment is as simple as evaluating program (or
individual SPIF) performance against the goal. By using an automated system to capture data during the
SPIF’s lifecycle, progress toward the goal can be monitored throughout the process.
2) Sales Lift
Calculating sales lift over regular sales that would otherwise have occurred if the SPIF wasn’t implemented
has always been the goal of channel marketers. Doing so requires a comparison between both a test group
and a control group of partners. The test group represents those resellers who have participated in the
program, and the control group represents a similar group of resellers who haven’t participated in the
program.
Note: Sales should be analyzed before, during, and after the promotion period to truly understand the impact of outside trends that may affect sales
(economy, seasonality, competitive conditions, etc.). The duration to be measured pre- and post-program depends upon your sales cycle. B2B products
with longer sales cycles will typically require one to three months of data to establish a baseline.

3) Tactical Metrics
Just as important as evaluating the strategic “end result” is examining the tactical metrics. Tactical metrics
help determine why a given program succeeds or fails. Examples include: number of partners participating,
reasons for non-participation, average/highest/lowest results by rep, etc. Tracking tactical metrics
throughout the SPIF lifecycle can provide opportunities to make program adjustments and course
corrections to insure that strategic level outcomes are met.

24 Summary


25

To summarize, let’s recap with common frustrations and their solutions as addressed by
the best practices, tips, and techniques outlined in this eBook.

Frustrations/Challenges Solutions
Create a SPIF program that allows for building
“Here today and forgotten tomorrow”
relationships with program participants over time

Constantly have to invent new Deploy SPIFs with a program framework, and
programs, different processes for each automate to standardize processes

Don’t over use, think short-term, ideally “first time”
Narcotic in nature
behavior

Align with Partner GTM, tie individual and partner
Not able to target the people I need to
entity programs

Consider different reward options, don’t reward
Program viewed as an entitlement
ongoing behavior

Difficult to predict participation and Pre-test/Preview program and include user
payout registration in process

Determine metrics during design, ensure proper
Can’t measure ROI
capture during execution


26

Successful SPIFs can be realized by adopting these four best practices:

12 Design a SPIF Program Versus a Single SPIF

3
Optimize Your SPIF Design

The Value of Registration

4 Measure Program Success

About CCI
CCI delivers comprehensive incentive solutions to optimize sales channel performance. As an enterprise software and services solutions provider,
CCI enables channel marketers to manage and measure sales and marketing incentive programs throughout their demand chain, resulting in greater
spending efficiency and improved program effectiveness. CCI provides a combination of on-demand software, professional services, and program
management. CCI’s Professional Services team applies best practices to define and deploy programs that meet your business goals. Equally powerful
is CCI’s software. Delivered on a SaaS platform, CCI automates your channel programs and partner activity for increased visibility, measurement, and
ROI. Once deployed, CCI Program Management delivers services such as contact center support, auditing, and payment services to ensure program
operational efficiencies. CCI is proud to work with market-leading companies in technology, telecommunications, and entertainment. For more
information, visit www.channelmanagement.com or contact us at marketing@channelmanagement.com.


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