Spiff and/or loyalty programs can influence purchases when little else separates a manufacturer from its competitors. Manufacturers spiff customers and other value chain participants to help boost sales. Nothing should replace the quality and reliability of the product itself, but if quality is equal among competitors, it makes sense to utilize the spiff or loyalty program.
A compelling spiff is often the first point of engagement between your brand and the people who sell it. It is a direct path to your real customer: the person who buys it.
How to Make a Successful Spiff Program
The success of a spiff program depends on how well it is implemented and managed.
Here are recommended steps to achieve a successful one.
1. Create a strategy, define goals
Clear. Concise. With clear goals in place, you can begin building the strategy to achieve them. Think of it like planning a trip. In order to know when you've reached your destination, you need to select it first. Otherwise, you would be traveling aimlessly.
Your strategy should include consideration of the products you will be rewarding, who will receive the rewards, and how much the reward will be. Your strategy objectives should be along the lines of how much more in sales you expect, as well who you will allow participation in the spiff to (i.e., which market channels). Strategy is very important. Here is a good blog to read about how important it is: Who's on First when It's About Strategy?
2. Define participants/targets
It is important to identify your targets, define who will be eligible to participate in the spiff.
In B2B spiffs, typically there is two-step distribution involved to get a product to market. Will you reward the Distributor? The Contractor? Both? Spiffs can be created for internal rep firms as well (i.e., rewards for delivering specifications of the product). Spiffs can also be created for end users (where the product is installed). Audience definition is a critical part of your strategy.
3. Analyze market, engage participants
Know the audience you are trying to reach. Communicate directly to them.
A spiff's success largely depends on how it's communicated. A well-communicated and well-understood program is more likely to generate excitement and participation, and drive the intended results. Communicating regularly with the targets maintain momentum and awareness.
Announcing a SPIFF promotion once isn't going to lead to impressive results. The best SPIFF promotions are exceptionally well-communicated. You should build an appropriate integrated marketing and communication plan to get sales reps to register and participate in the promotion using various mediums to hit your targets. These communications should be regular and frequent.
4. Design program structure
The spiff must be designed to achieve your goals and budget parameters. State what you want participants to do and what they will earn for doing it. Plus, determine the duration of the spiff.
This means rules. Rules should clearly be defined upfront so everyone knows what's being rewarded, how much the reward is for, and when the rewards will be delivered.
5. Award options: merchandise, gift cards, travel, cash
Consider what participants will earn. Is “cash king?” What awards would the participants like?
For a discussion on whether to reward with cash or merchandise, read Cash Isn't King…Yea, Right.
6. Assign program administration
Don't go it alone. Look for a flexible partner, because circumstances inevitably change. Your partner and their systems should be able to adapt accordingly.
One of the biggest causes of a failed spiff is lack of flexibility on the part of the administration. Whether you do it inhouse, or hire a professional firm, be sure that flexibility is a key part of your decision. Create three "what if" scenarios during your evaluation process (i.e., "What happens if someone submits after the stated program period and we approve them. How does that work?"). This will help in your evaluation. Also, ask other manufacturers like yourself who they use.
7. Who read this?
Behind the scenes of your spiff lies the heart of its success. More than just web design, the technology infrastructure and databases supporting your spiff are vitally important to its smooth performance, engaging participant experience and ease of maintenance.
8. Budget
Establishing a budget protects you from runaway commissions that overshadow the core incentive plan and may exhaust the overall compensation budget.
Budgeting is part art, part science. Structured properly, the program will pay for itself out of the profits and cost savings they generate — which can't be known until the program ends. Rewards are not funded out of the incremental increases in sales. They are justified by them.
Four things to keep in mind:1) examine the plan (your objectives and strategy); 2) consider your costs; 3) review your options (i.e., fixed or variable rewards); and 4) find funding (i.e., some programs reward at the end, while others reward throughout). This is where "flexibility" of administration kicks in.
Finally, determine what your benefit really is. In some programs, that benefit goes beyond sales and resides in the unduplicated data which results from the sales information.
9. Track/database
For the promotion participant, allowing them to track his or her progress in real time, helps to keep the sales rep engaged and active in the promotion.
This should be considered in your strategy – why you are spiffing in the first place. There are lots of opinions about spiffs and the data resulting from such programs. One of the more interesting points of pro and con is The Human Side of the Spiff. This piece argues both sides of the equation.
10. Fulfill rewards
Want to keep the excitement going around the promotion? Make sure they get their due in a timely fashion.
11. Measure the SPIFF's impact and evolve the program.
Metrics are a key part of the spiff program. When running targeted spiffs, reports on performance, sales lift, ROI and other results help marketers strategize on how to further boost the effectiveness of those spiffs. Once it has ended, glean insights from the results: what worked, what didn't work, what could be improved, etc.
Why MarketNet Should be Your Partner for Success
MarketNet's experience and reputation for managing spiff and loyalty programs has reaped dividends for the manufacturers they serve. While many audiences such as showrooms, contractors and distributors have come to expect these programs, MarketNet knows that if poorly run, they can do more harm than good.
Participants become quickly disenchanted if they find it difficult to submit paperwork, earn prizes, or encounter hassles along the way. MarketNet supports their manufacturer programs every step of the way to ensure they operate smoothly and keep both manufacturers and customers satisfied.
MarketNet gives you a support team that:
Verifies
verifies participants paperwork
Pays
only pays on qualified products
Checks
checks for duplicates/fraud
Processes
processes the rebates
Issues checks
issues checks in a timely fashion, normally within two weeks
Answers questions
answers questions regarding the program by e-mail, phone or fax