What does SOP mean in sales?
of an SOP is the step by step production line procedures used to make products as well train staff. An SOP, in fact, defines expected practices in all businesses where quality standards exist. SOPs play an important role in your small business. SOPs are policies, procedures and standards you need in the operations, marketing and administration
What are spiffs in sales?
The Bad
- It can lower your salesperson’s prestige, be questionable or even be considered illegal. The use of a SPIFF can reinforce bad habits, poor behavior, or worse by salespeople. ...
- SPIFFs are taxable. The IRS considers them incentive pay so they do fall under the rules for 1099 MISC Commission. ...
- Fraud issues using a SPIFF Incentive. ...
- A SPIFF can be costly. ...
What is Spiff income?
SPIFFs are taxable income. You just will not pay the self-employment taxes (Social Security/Medicare) on that income. The issuer also does not withhold income taxes on the payments meaning you will pay the income taxes via your tax return or quarterly tax payments if you choose.
What is a Spiff and what is a spiv?
Spiffs and SPIVs are basically the same; although, they are used to describe certain long-term sales or incentives. Manufacturers and/or employers use spiffs and spivs to promote sales and to incentive their sales teams. Sometimes these incentives fail to meet the need of the company, and another incentive is used instead.
What is the meaning of SPIFF?
A spiff, or spiv, is slang for an immediate bonus for a sale. Typically, spiffs are paid, either by a manufacturer or employer, directly to a salesperson for selling a specific product. It is sometimes given as SPIF or SPIFF, a backronym, with invented words to fit the letters, but these are not the origin (see below).
What's the difference between SPIFF and commission?
What's the difference between a spiff and a commission? Commissions and spiffs are both performance payments, but spiffs are for temporary use and commissions are more permanent incentives. Spiffs are also paid to salespeople quickly as one-time bonuses for selling a specific product or service.
What does SPIF stand for in business?
A SPIF, or sales performance incentive fund, is a short-term sales incentive used to improve results over a short period of time.
What is a team SPIFF?
A SPIFF is a short-term incentive that sales reps get immediately after making a sale. Sometimes, it can be vacations, prizes, or recognition in the organization. It gives sales reps the extra push they need to perform better at the workplace.
Is a SPIFF taxable?
SPIFFS are Taxable Since these count as income, they are subject to all the same taxes as regular pay. So, when an employee receives the reward check, make sure they expect taxes to already be taken out. Sometimes an employee might border a certain tax bracket.
How much is a SPIFF?
Spiff Pricing Overview Spiff pricing starts at $99.00 based on usage, per month. They do not have a free version. Spiff offers a free trial.
What is the origin of the word SPIFF?
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 ...
How do I create a SPIFF program?
What is a SPIFF Program?Define Goals and Conditions. ... Determine Appropriate Benchmarks for Rewards. ... Create a Marketing Strategy. ... Make Sure Your SPIFF Incentives Are Attractive to Participants. ... Be Purposeful When Choosing SPIFF Participants. ... Carefully Choose the Right Timing and Frequency.More items...•
What is sales Performance incentive Fund?
A SPIF (sales performance incentive fund) is a financial incentive that encourages a sales representative to sell a specific item or group of items. The term is often used as a synonym for the word "bonus."
When was Spiff published?
Originally published Jan 23, 2020 8:30:00 AM, updated January 23 2020. Topics: Sales Motivation.
Why are spiffs good?
2. Spiffs are a good way to meet short term sales needs. Spiffs are designed to help businesses meet or exceed sales goals in a short period of time. If your business is looking to have its reps quickly meet their sales quota, a well-designed spiff might be the way to go.
How often should you use a spiff?
It’s recommended that you try to keep spiffs infrequent — generally just once or twice a year. 3. They can create a toxically competitive work environment.
Can spiffs eat your budget?
2. Too many spiffs can eat up your budget. Though spiffs are good for sales in doses, there’s a reason they’re confined to short timeframes.
Can a spiff lead to sandbagging?
Spiffs can lead to sandbagging. If your sales reps know that a spiff is coming, they may wait until the program starts to close deals they could’ve closed earlier. One way to manage this issue is to have your spiff be a surprise. Don’t let your sales reps know that it’s coming.
What is a Spiff?
Spiff. For other uses, see Spiff (disambiguation). A spiff, or spiv, is slang for an immediate bonus for a sale. Typically, spiffs are paid, either by a manufacturer or employer, directly to a salesperson for selling a specific product.
What is a spiff system?
An article in the Pall Mall Gazette of 1890 on the practices in London shops uses the term: a "spiff" system is usually adopted, spiffs being premiums placed on certain articles, not of the last fashion, indicated by a marvelous hieroglyphic put on the price ticket.
What is SPIF in Dell?
In 2019, Dell EMC use the term SPIF (Sales Performance Incentive Fund) to refer to programs designed to target business that might otherwise go to competitors.
What is a SPIFF?
SPIFF is the immediate bonus that a sales rep receives after completing a sale. It is a performance fund that you set aside for your sales reps. Such rewards are a great way to meet and exceed short-term goals.
Difference Between SPIFF and Commission
At a glance, SPIFF and commission look similar. However, there are some fundamental differences between the two. Let’s look at them one by one.
Conclusion
Before we wrap up, here’s a piece of friendly advice. Invest in software to keep a tab on your reps’ activities and performances. Many sales-led organizations use CRM software to manage everything related to sales.
Why do businesses use SPIFF?
All businesses need to stay profitable if they want to stay alive. Sometimes you use a SPIFF to increase sales in order to meet a financial obligation. If the reward neutralizes the ability to meet this obligation, the program fails.
Why use SPIFF?
Sometimes you use a SPIFF to increase sales in order to meet a financial obligation. If the reward neutralizes the ability to meet this obligation, the program fails. If you make a promise to your team, you need to fulfill it. When they reach their goal they will expect the reward immediately.
SPIFF basics
Companies use SPIFFs to boost short-term sales or hit short-term targets.
Boost motivation with SPIFFs
Besides increasing sales, contacts with prospects or upsells, there’s another, less tangible benefit to SPIFFs in sales — better employee or partner engagement.
Can a SPIFF work for your organization?
Whether a SPIFF can help your company reach its sales goals depends on having a few things:
What can be a SPIFF incentive?
The SPIFF incentives that work best for your company will depend on what your salespeople want and what you can offer. In general, SPIFFs fall into two categories:
Run your incentive programs efficiently with SPIFF program templates
Once your SPIFF campaign is launched, you’ll need to keep careful track of what your sales reps and partners are accomplishing, so you don’t overlook anyone’s SPIFF sales or apply them to the wrong person. To keep everything organized — and to run future SPIFF offers more easily — it’s a good idea to create templates for:
SPIFF FAQs
We’ve gone over the basics, but there’s more to know about SPIFFs before you roll out your program.
Ready, set, SPIFF
The bottom line on SPIFFs is that they can help your company hit short-term targets, while increasing rep and partner engagement.
Why do manufacturers use Spiffs?
Manufacturers and/or employers use spiffs and spivs to promote sales and to incentive their sales teams. Sometimes these incentives fail to meet the need of the company, and another incentive is used instead. While some spiffs can be good, others can be bad. All spiffs and spivs are not and will never be the same.
Why do companies use Spiff programs?
The answer is simple. Companies use spiff programs to increase their profits. Some merchandise does not have loyal patronage, especially non-name brand items. Therefore, when new brands hit the market, they need to be properly introduced to the public.
What is sales promotion incentive fund?
Sales Promotion Incentive Fund can offer merchandise like smartphones, tablets, or a smart television to capture the attention of sales teams. It is the incentive that will drive the salespeople to work extra hard to sell those hard to move items. At the same time, incentives do not need to be expensive, trendy items to work. They can be something like brand swag, or in-store banners, product brochure displays, branded apparel or even commonplace items like cameras and multi-purpose tools.#N#Spiff participants are great at choosing their own incentives, so why not offer them a choice of awards? Getting them into the groove of things at the beginning will help the program run smoothly.
What is a Spiff program?
It is incentive program companies and businesses use to drive sales. When merchandise is not selling well, or if inventory items need to be sold or cleared, the company runs a campaign. Or, when a sales sprint is put in place on a sales team and the company or business will put in place a spiff program to increase sales during a specific period ...
Why do people use spiffs?
Spiffs are meant to be fun for participants. In the early years, spiffs were used to help launch Apple computers, and IBM used spiff programs to keep their brand stronger in the public’s eye. Salespeople during this era earned incentives to demonstrate the use of these computers.
Can spiffs be illegal?
If spiffs are used erroneously, the awards can become illegal. Therefore, it is imperative to always review the game plan. Make sure all the details, rules and regulations are clear, and everyone understands their part. When the program goes well, the end result can be profitable for everyone.
Can a manufacturer offer a percentage of the profit to boost product sales?
In that situation, the manufacturer can offer the retailer a certain percentage of the profit to boost product sales. Advertising alone is not enough. There has got to be an incentive involved that is beneficial to the sales team, the store, and the manufacturer.
