Sales Spiffs, Contest and Awards…Yay or Nay?

The purpose of this week’s blog post is to give a few opinions but also, hopefully, to get some feedback, dialog, and comments. Ever since I started my career in sales and sales management, I’ve been exposed to various sales spiffs, contests, and awards from the companies where I’ve worked. Some have been inconsequential, and others have had a pretty hefty monetary value. My question this week is, “Do sales spiffs, contests, and awards really make an impact in inspiring sales teams to achieve and exceed their sales goals?”

Let’s take a look at each of these:

  • Sales Spiffs
  • Sales Contests
  • Sales Awards.

Sales Spiffs

A spiff is defined as, “paid by an employer directly to a salesperson for selling a specific product.” Sometimes, I’ve seen sales organizations present spiff opportunities at the beginning of the year to their sales team. Most of the time, in my experience, spiffs are a somewhat REACTIVE tactic that are instituted if sales are down…either with a specific product or overall. In my roles as both an individual contributor and as a sales manager, I’ve always been bothered by the spiff. I always perceived a spiff as senior management believing that the sales team really wasn’t doing their best to sell the company’s products…maybe a belief that the team was holding back in some way. Or, that one of the products was so undesirable that we had to pay people extra to try and sell it.

I’ve always been compensated with a salary/commission combined plan. The percentage has differed depending on the job but mostly it has been a 50/50 comp plan. The salespeople that I’ve worked with, or managed, would never ‘take the foot of the gas’ because half of their comp was dependent on sales. It seemed like an almost backhanded implication that we, as the sales team, weren’t doing our job.

And, I really can’t think of too many instances where there were dramatic increases in revenue because of the spiffs. As you can tell, I’m not a fan of these spiff programs.

Sales Contests

Sales contests are implemented to reward salespeople for both individual and team goals. I’ve seen contests based on sales for a particular product and also the most aggregate sales during a particular time period. Contests can be a positive particularly when applied to boost sales efforts for particular teams. Even contests among individuals can be effective if they are set up as a healthy competition. Sometimes, the contest can be particularly effective as a motivational tool to showcase how other team members are doing relative to the overall team.

The most effective contests achieve the goal of increased sales and the side benefit is a more cohesive sales team.

Sales Awards

I like sales awards more than spiffs and contests because they reward effort and are not an assumption by senior management that the sales team needs extra compensation to do their jobs. Sales awards don’t cause negativity or disunity among the sales teams. My experience has been that the entire team is excited for the various award winners. Salespeople don’t do their jobs to win awards, but it is always very gratifying to be recognized after a productive year’s effort.

I am a fan of having many types of awards…from Salesperson of the Year to Most Inspirational to Leader of the Year. It’s great to be in the audience to watch the winners go up on stage to receive their awards. Most awards come with some kind of monetary value or a trip.

Sales contests and awards, done correctly, can be very motivational for the sales team. They can provide transparency about the progress of the team’s sales efforts and can also reward successful sellers. Year-end awards are also welcomed by the sales team…even if they are not consciously working throughout the year to achieve those rewards. Awards can be springboards to greater career success at an individual’s company or, in some cases, if they change jobs to another company. I’m not a big fan of spiffs because I believe they are reactive tactics and, in my experience, don’t lead to much sales success. Having said all of this, I’d love to hear opinions from fellow sales professionals.

 

Author: Tim Hand

My name is Tim Hand, and I am a digital media, sales & marketing team leader, and I have a real passion for partnering with companies, publishers and agencies to help drive client growth and bottom-line revenues.

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