SPIFFs for SEs | The Sales Engineer

As SEs we often get left out in the cold when it comes to the almighty SPIFF. SPIFFs are easy to manage and measure when it comes to the sales rep. SPIFFing SEs has it’s own set of unique benefits and pitfalls and can certainly be tougher to gauge success. While it’s been increasingly common to tie an entire account team to the SPIFF where the inside rep and SE can benefit, this watering down effect does not often drive SE activity. I think it’s time we devote some attention to driving SE-focused SPIFFs.

What is a SPIFF?
For the uninitiated, the SPIFF is an incentive for pushing a particular product or feature. A SPIFF is always targeted at closed sales, not at selling/supporting activities. The latter is a MBO. This feature makes SPIFFs for sales reps pretty simple from an accounting standpoint: i.e. how much of product x did they sell.

SPIFFs are usually driven by the product group, sales management, and/or marketing–often jointly to help drive strategic product sales. For example, if the product group introduces a paid feature addon such as database connector for enhanced reporting, they may sacrifice the profit margin initially and return a chunk of that money to the sales people who actually sell it as an incentive for the rep 1) taking the risk of selling an unproved product and 2) putting additional emphasis on it during the sales process to drive awareness. The thinking goes is that the temporary SPIFF will create enough awareness with the reps (and thereby customers) that after a limited time product sales will become self sustaining.

SPIFFs can be configured in innumerable ways. It could be paid out for every sale, for exceeding a certain threshold, or handled in contest style paying out the top x% of the sales force.

So should SEs be included in Sales SPIFFs?
Tying SEs to Sales SPIFFs I consider to be first generation progress towards integrating SEs into formal sales plans. It doesn’t take a lot of effort and remains easy to measure. It does have it’s drawbacks; consider:

If the payout is tied to variable commission, the payout amount might vary greatly leading to SEs not receiving significant enough incentive to modify their actions
It may involve a product or feature that SEs have far less influence in selling
The SE model may involve pooling or multiple types of SEs involved leading to confusion on payouts
If there are numerous SPIFFs ongoing or if communication is targeted at the reps there may not be significant awareness generated, especially if there are many SPIFFs SE are not apart of

When SEs are identified as a significant potential drivers of SPIFF success, management can begin to tailor them for this audience. I consider that the second generation in SE involvement. It has the benefit of addressing shortcomings associated with disjointed payouts and any confusion over which SEs can participate. Some best practices associated with this phase include:

Ensuring SEs are paid enough that it affects behavior. Flat payouts for every sale work best
That SEs clearly understand how (and how much) they can gain. It’s taken for granted that SEs take special note of sales incentive programs the way reps do. That is not typically the case. SE Managers should take note of this and help reinforce the message
Reinforce the value of SE participation with recognition. If your sales newsletter goes out monthly and lists the current successes, make sure there are SEs there. If they aren’t, add a separate category to make sure they’re being called out in a public forum alongside their rep counterparts

In some cases, it may make sense to have a separate SPIFF created specifically for SEs–this of course being 3rd generation. Getting to this stage reflects an internal management understanding that SEs affect the sales process in specific, fundamental ways that will differ from reps. For example this can include selling addon products within a suite that are highly specialized that require extensive focus from the SE on creating demand from the technical implementers in the account.

Good SE SPIFFs have the following characteristics:

They are aligned with (or at least not undermining) broader strategic sales objectives. You don’t want reps and SEs clashing over competing objectives
They are clear. As I stated SEs are not accustomed to mining their comp plan and sales chatter
They matter, value speaking. Nothing undermines morale faster than announcing a SE SPIFF that fails to pay out significant dividends
They are accompanied by SE-tailored collateral. It’s not that SEs can’t figure out the best way to go capitalize on an opportunity and create some supporting docs. It’s just that you’d rather do the heavy lifting once and remove the redundancy. SEs can then customize the stock material to their liking–much more efficient
That success is publicized. SEs are competitive just like reps. Keep and publish a stack rank to encourage participation and recognize achievers

How you compensate for the SPIFF can vary as well. Cash payouts are easy but can be varied to capture interest. Other examples I’ve seen work well include gadgets for achievement levels such as an iPad for 10 sales, a guaranteed spot at club for top 10% of finishers, and an invitation to a “mini-club”. A little creativity doesn’t hurt as long as the rewards provide good incentives.

What can you do as an SE?

As an SE I don’t recall ever being asked by a senior manager if I would like to participate in a SPIFF and how that would work. So what can you do if there is no precedent at your company for SE inclusion in your sales/SPIFF programs?

I think this has to start with the SE Manager being well versed on the subject and having some industry evidence to support bringing it to the attention of sales management. I wouldn’t frame the conversation as a “me too” argument but instead focusing on 1) the value of having an aligned compensation plan for all account team members, and 2) the unique value propositions for SE-specific SPIFF development.

As an SE you’re actually in the best place to generate some potential ideas to bring into the conversation with your manager. Think of three things you’ve done or could do to capitalize on a market opportunity and sell the value of turning that into a program everyone could benefit from.

All it takes is one good idea to bubble up and set a precedent. If you have a group of SEs all looking for ways to grow revenue, become more efficient, and looking for compensation based on results, that idea won’t be far away.

Dude, where’s my SPIFF?

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