Channel Mechanics

Getting SPIFF’s Right: Move beyond the old ways of doing Channel Incentives and Rebates

Channel Mechanics

Partners have lots of choices as to which vendor’s products to sell in competitive situations. Beyond technical differences, how do you best drive your channel partners to position your products versus the competition? Many vendors use SPIFFS or SPIF’s (Sales Performance Incentive Funds) to influence behavior with their channel partner sales teams.


A SPIFF is a short-term incentive, to drive sales in a set period of time.   They include dollar rewards, prizes, or loyalty points, but they are all aimed at one thing—driving your sales.


But a SPIFF doesn’t always work.  Reasons include:

  • Not getting the incentive right
  • Not targeting the offer at the right people
  • Making it difficult to understand and consume
  • And not having the right infrastructure in place to make the entire process work.


So how does a busy channel manager implement the right combination that drives sales and makes the partner happy?  And how do they get the metrics that show the impact of any given incentive program?


Channel managers are busy with their day jobs. Many therefore utilize low-cost SaaS options for the design, targeting, management and analytics associated with SPIFF programs.  These companies have developed SaaS offerings for SPIFF programs useing sophisticated methods to target and reward partner salespeople. In addition to taking care of the complexities of logistics and payments.   Their ability to tie back SPIFF expense to sales outcomes powers reporting and business intelligence back to the vendor.


A Great SPIFF Design

A great SPIFF design combines the right incentives with the right product offering, delivered in a simple way directly to the salesperson.  Tailoring of the SPIFF will be dependent upon the target audience—is it a team (i.e., a sales floor) that loves to go out together and take advantage of the incentive they received for collectively hitting a daily sales goal?   In that case, food and beer coupons will work perfectly fine. Or are they individuals in different parts of the country and/or world that will respond to prize catalogs based on loyalty points?   Great SPIFF programs will also have a loyalty component to motivate sales reps to stick with a particular vendor.


Once you define the audience, it’s critical to figure out if the product itself is priced correctly to compete in the market. Or whether it needs additional items like service and support in combination to be compelling enough to carry the day.


Best Practice in setting up an effective SPIFF

A simple best practice in setting up effective SPIFFs is to firstly talk with the channel partners most likely to sell your product, if an incentive is included.  Find out which products or product sets best lend themselves to benefitting from the push a SPIFF can provide.  Talk to your partners. Find out what has worked best for them in the past, and learn from them what you could do better.


Once you’ve figured out the right SPIFF for your channel, ensure it’s communicated well and that you have a way to measure the impact it’s having with your partners.   Using internal internal processes and manpower is one way of achieving this. Or alternatively through the use of 3rd party SaaS vendors who specialize in this field.   Channel Mechanics is one SaaS provider with extensive experience in designing and implementing channel SPIFFs.  If you ‘d like to learn more about how Channel Mechanics optimizes vendor SPIFFs in a closed-loop cloud-enabled environment, more information is available at:


Experience pays off in the design of effective SPIFF programs, whether it’s from inside the company or from an outside expert.  Those vendors that get it right develop stickiness with key partners and create the win/win relationships that continue to drive revenue.

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