In sales, the spiff (sometimes said to be based on an acronym for 'sales performance incentive fund') is a special incentive offered to encourage the sales team to focus on a particular product, bundle, or service. For salespeople, spiffs provide a bit of extra income. For companies, the spiff encourages focus on an area that needs attention. It might be to jump start a new product, to revitalize an old one, or to clear some dead inventory.

A well-designed spiff should motivate the average-performing core of the sales team to expend extra effort. If the effectiveness of the sales force follows the normal distribution, this will provide the greatest return on investment. The top performers are likely already doing what's needed, and the bottom performers will be on the street in a quarter or two anyway.

The spiff can be monetary or prize-based, and can be given to a few top achievers or tiered so that everyone gets something. Depending on other compensation factors, one strategy may be more effective than another.

Spiffs should be infrequent, so that staff don't start sandbagging to pick them up. They should be a relatively small part of the overall incentive budget, so as not to overwhelm the core sales focus drivers. They should be communicated clearly so that all sales staff know about them, what their purpose is, and how they can be rewarded.


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