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7 Steps to Creating a SPIFF Program to Incentivize Channel Partners

What is a Channel Partner Incentive Program?


A SPIFF is a time-sensitive incentive program geared toward channel partners to boost sales activities. SPIFFs also serve to strengthen relationships between manufacturers and resellers. The main reasons for creating SPIFF programs are to improve performance, push a specific set of products, and engage salespeople. 

To maximize the ROI, don’t make the mistake of blindly launching your channel partner incentive campaign without laying the essential groundwork. The following seven steps will help create a lucrative SPIFF program for partners:

1. Define Goals and Conditions

Set aside time for pre-planning and identify what you hope to achieve. Start with a question tied to your goals, “How do we incentivize our partners to help us reach our goals?” Determine which metrics you’ll use to measure SPIFF performance. KPIs you’ll want to track include:

•  Total leads and generated revenue 

•  Number of participants, segmented by partner groups

•  Increased time on portal and/or material engagement

•  Return on investment


To set appropriate goals, take stock of where you are right now. What is your current business situation? What needs to be improved? What areas of the business are weakest? Which products or services would benefit most from a channel partner incentive program? For example, if you know the summer months are a slow time, you may want to structure your SPIFF around that time for the “extra push.” Or, you may want to do it during your busiest time to capitalize on the momentum. 


Create SPIFF Participation Conditions that Accommodate Your Goals, Including:

•  Which partners can participate

•  Which products or service-types qualify 

•  Are there audiences that don’t qualify, such as upselling to current customers or certain geographies 

•  Deadlines and durations

•  Whether success is measured by deals registered or closed 


It’s crucial that conditions be precise for your partners. Any ambiguity can lead to misinterpretation and, ultimately, frustration from the participants. 


2. Determine Appropriate Benchmarks for Rewards

If your yardstick for success is unrealistic, expect low participation and morale. If it’s too unambitious, partners won’t push themselves. Therefore, consider the following factors when creating the “finish line.” 

•  The estimated length of a sales cycle. The duration of the incentive campaign should give partners plenty of time to market, pitch, and close deals. 

•  What’s achievable for the partner segment you’re targeting. Is the goal to further motivate new partners to get that first sale? To re-engage seasoned partners? Examine the intended partner group’s historic performance to discern what’s ambitious but attainable. 

•  Past SPIFF performance. Examine the participation-rate and measured ROI of your last few campaigns to determine if you overshot or undershot the ideal goal. Don’t be afraid to tweak conditions to see how these KPIs comparatively perform. 


3. Create a Marketing Strategy

Similar to setting goals ahead of time, you should pre-plan your marketing and communications strategy around your SPIFF program. Many organizations make the mistake of launching their channel incentive program and then marketing it as an afterthought. Partners should be informed of a SPIFF program ASAP to prepare for it and have enough time to put in the work. You can use similar marketing tactics you use to promote your products to customers.


Marketing tactics for promoting your SPIFF program include:

•  Teasers and hints about your upcoming SPIFF launch

•  Email announcement campaigns

•  Virtual kick-off event or special announcements

•  Mailers and postcard


4. Select Awards and Incentives 

Choose your method of compensation for participants in your incentive program. SPIFFs are rewards-based, so your prize choice is critical in creating an effective plan. If your participants aren’t excited by your offer, they may not be as motivated to succeed. This is why cash is such a popular SPIFF choice. There aren’t many people that wouldn’t get excited about additional income. 


Popular SPIFF rewards options:

•  Prepaid cards: These could be gift cards for popular businesses like Amazon or prepaid credit cards. Some companies, like Epson, create branded prepaid credit cards equipped with an online account that continually disperses money to accounts as the sales reps close deals.

•  Travel: Some companies offer all-expenses-paid trips. Travel rewards are similar to Presidents Club, but for your partners. 

•  Merchandise: When it comes to offering products, choose something that most people would appreciate. Laptops, tablets, and smartphones are something everyone can benefit from. 

•  Increased MDF budgets. Your contribution of marketing development funds (MDFs) can support partners’ new promotional initiatives that ultimately help both you and them make more money profits. Increased “free marketing” is a worthwhile reward and—by increasing the budget exclusively for earners who surpass set benchmarks—you’re most likely increasing the related ROI.

•  Temporarily increased partner commissions. As cool as swag may be, nothing really beats the appeal of cash. You can offer partners that meet an initial threshold a sales bonus or a higher percentage of the profits (for a limited amount of time). 


For further ideas, read our post about channel incentives that will connect with partners



5. Choose Participants 

Choosing participants for your SPIFF program is similar to targeting buyer personas in a marketing campaign. Choosing participants requires more granularity than just identifying specific partners. You’ll also want to take into account the individual personas of the participants and their motivations. Having a firm grasp of who you’re targeting will ultimately help you create a channel partner incentive program that’s tailored to them and is effective. This information also comes in handy when choosing rewards, as you can gear them toward specific demographics. 



6. Choose the Right Timing and Frequency

Something that should be as simple as selecting a date carries more significance than you might initially assume. Consider the following:

•  When are sales traditionally slow? The goal is to generate sales that would otherwise not exist by giving your partners extra incentive. If you motivate them to sell during periods in which they would be engaging regardless, you defeat the purpose. 

•  Do you have new products in the pipeline? SPIFFs are a great way to build partner interest around newly released offerings, which would hopefully translate into more leads.

•  When was your last SPIFF campaign? It’s human nature that, the more of a good thing someone receives, the less they appreciate it. Therefore, limit your SPIFF campaigns to only a few times a year. Otherwise, you risk an increasingly reduced ROI per competition. 

•  Is a clear pattern starting to emerge? If yes, pivot from your set schedule. If partners are able to anticipate the next SPIFF competition, they may begin to delay closing deals until the start of the campaign. Keep partners guessing! 



7. Have Tracking in Place to Determine ROI

If a tree falls in a forest but produces no trackable data, does it make a sound? 

Without the appropriate tracked data, it’s impossible to fully encapsulate the success of your SPIFF campaign. Plus, with the right tools, you can derive important lessons you can apply to future partner incentive programs. 

Consider how the generated revenue during the SPIFF campaign compares to past periods and past years. How did the revenue increase measure against the added spending?

There will always be circumstances that influence profits from one period to the next, whether it be industry shifts, world events, new marketing messages, etc. To eliminate such external factors when testing SPIFF campaigns, some companies establish a control group that operates without the SPIFFs simultaneously with the campaign. This allows them to gather comparative data for the same time period for optimal accuracy.  


Bottom Line About Partner Incentives

A SPIFF program can produce tremendous results in your revenue numbers and partner relationships. Creating an effective channel incentive program comes down to mapping out your goals, adequate marketing, the appropriate rewards, and the right participants. When executed correctly, your SPIFF program will motivate your partners and build strong bonds, resulting in long-term success.

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Daniel Graff-Radford