Executing a Successful SPIF

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eBook from CCI: Channel Management Solutions

SPIFs are a great way to generate enthusiasm and mindshare, promote

market adoption of a new solution, incent the sales of a specific

combination of products, or even to reward soft skills development.

However, execution is where most programs fall short of success. This

ebook will help you to sidestep the pitfalls and provide useful and

practical advice to start a SPIF program and/or helpful tips to improve

under-performing SPIFs.

BEST PRACTICES, TIPS,

AND TECHNIQUES

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CCI eBook: Executing a Successful SPIF

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www.channelmanagement.com

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Defining “SPIF”

SPIF Challenges

Best Practice #1: Design a SPIF Program Versus a Single SPIF

Best Practice #2: Optimize Your SPIF Design

Six Tips & Techniques for SPIF Design

Best Practice #3: The Value of Registration

Best Practice #4: Measure Program Success

Summary

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The Classic SPIF (Sales Performance Incentive Fund)

Sales incentives can be divided into two main types:

The first is where the classic SPIF sits. Individual sales incentives typically:

 Are focused on the sales rep or sales engineer

 _{Have the core objective of influencing point-of-sale}

 _{Have program timeframes that can be shorter or longer term}

This eBook focuses on the most common types of individual sales incentives and their key attributes.

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Targeted at the

individual

Targeted at the

partner entity

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Title

Definition

Attributes

SPIF

 Provides guaranteed rewards to

participants for accomplishing a particular action

 Example: “Sell X, get $Y”

 Usually short-term

 May be quickly deployed

 Requires re-launch of every program

 Can tailor for different audiences (SEs/SRs)

 Difficulty forecasting payout

Loyalty

 Designed to build long-term mindshare and relationship

 May be designed to reward a variety of behaviors

 Example: “Sell X, do Y, to earn points toward Z”

 Rewards are often cumulative in nature

 Longer term

 More robust infrastructure required

 Can “follow” participant

Contest

 Rewards that have an element of chance

 Example: “Sell X or do Y to qualify for winning Z”

 Subject to local laws

 Good for driving mindshare, individual/team motivation/excitement

 Short or long term in nature

Rebate

 Drive product sales through temporary price decreases

 Gather consumer info, promote new products

 Example: “Buy X, get $Y discount or rebate”

 “Instant” or “mail-in” are the most common

 Short term

 Trade-In or Trade-Up program (rebate may go to partner or consumer)

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Common Pitfalls of SPIFs

SPIF Challenges

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SPIFs are certainly among the simplest and easiest sales incentives to deploy, however this can often be their downfall. When we talk to clients about SPIFs, it is common to hear about a lot of challenges. Some common frustrations about SPIFs:

 “Here today, forgotten tomorrow” – no ongoing engagement is derived

 Constantly have to invent new programs and manage unique processes for each

 _{Narcotic in nature – the more you use them, the more they seem to be needed}  _{Viewed as an entitlement versus a bonus or reward}

 Hard to target the right people – partner principals do not allow for individual-level SPIFs run by vendor

 _{Difficult to predict payout needed as well as participation}

 _{Hard to measure impact/ROI – understanding that SPIFs are most effective in attaining goals}

The remainder of this eBook will address the above frustrations with some tips and best practices for implementing successful SPIFs.

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Design a SPIF Program Versus a Single SPIF

Best Practice #1

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While SPIFs have the benefit of being easy to deploy, that very aspect can result in a lack of longer-term thinking around them. While SPIFs themselves are best used for short-term initiatives, when designing a SPIF one should not just look at the immediate result or action you want to influence, but at the broader and longer-term needs of engaging with the particular target individual (sales rep, sales engineer, business owner, etc). Vendors are typically engaging with the targeted audience between four and ten times per year. Given this statistic, a “programatic” versus multiple “one-off” approach is called for. This leads us to…

Best Practice #1

:

Design the Program First, Then the SPIF

Program

SPI

F SPI

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There are a couple benefits to this approach:

First, creating a program will provide you with a framework where individual SPIFs can be deployed. Having a framework addresses the second frustration – constantly needing to invent new programs and manage unique processes for each. A programatic approach allows for core processes to be outlined at the outset (and

hopefully automated) so that the “invention” can be focused on the “do-get” proposition, not on administrative processes.

Second, the consistency of a program framework in which to deploy SPIFs will allow you to develop an ongoing engagement with your target audience (addressing that “here today, forgotten tomorrow” frustration), and gather consistent data on where and with whom SPIFs are working and/or not working.

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Determining Program Objectives

The first step to designing an effective program is to think about what types of actions/results you are trying to achieve with your target audience over a minimum one-year timeframe. Is it all about

quantitative goals? Number of unit sales of a certain product, average order size, volume sold of a new solution? Or are there also more qualitative goals, skill/knowledge improvements, customer satisfaction scores?

Finding the Sweet Spot

Once your list of objectives is clear, review them through the lens of how they align with your corporate strategy, customer needs, market environment, and partner strategy. Given that you are targeting individuals who are most influential at the point-of-sale, understanding partner strategy (GTM, Business Goals, SWOT, etc.) and that individual (goals, needs/wants, strengths, weaknesses, etc.) are the key.

Going through this exercise will help you fine tune your program objectives and insure you have found the “sweet spot” for optimal success.

Your

Program

Objective(s)

Corporate Sales/ Marketing/ Channel Strategy Customer Purchase Process Ongoing needs Environment Competition Geography Partner Go-to-Market Strategy

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Processes and SPIF

With your objectives clear, you can now

determine the processes you need to support the types of SPIFs you’ll deliver. In most cases, a sales incentive platform or system that automates capture, review, and reporting of participants and SPIF-related data is a good investment to support your program.

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Now that you have program framework with your objectives, let’s explore how to

optimize the actual SPIF design. Here are

Six Tips & Techniques

for SPIF design:

1. “Short-term” Definition

– A common mistake made by many channel

professionals rolling out SPIFs to an indirect channel is to plan the timeframe

for the SPIF in the same way they would for an internal sales audience. A SPIF

that would typically run for days or weeks with an internal audience should run

for months or quarters in the channel. While familiarity with an ongoing sales

incentive program will allow you to shorten timeframes in the channel, in

general “channel noise” requires more time for a SPIF to gain mindshare and

traction. Secondly, consider the timeframe in relation to the action requested.

A SPIF related to the introduction of a new solution is going to require a longer

timeframe than a SPIF whose goal it is to get old product off the shelf before

the release of an upgraded model.

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A SPIF that would typically run for

days or weeks with an internal

audience should run for months or

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2. Focus on First-Time Behavior

– SPIFs are best suited to incentivize first-time or

one-time behavior, as opposed to ongoing behavior. Ongoing behavior is best

targeted by your other compensation structure with your partner (percentage

of product discount, MDF/Co-op offering, rebates, etc.) SPIFs are most effective

when they are reserved for first-time behavior and used with some

moderation. This helps maintain a high-energy/high-effort/high-result

perception of them, and prevents them from becoming narcotic in nature or

viewed as an entitlement.

SPIFs are most effective when they

are reserved for first-time behavior

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3. Get Organizational Buy-In

– It is key to get (and create) buy-in for

your SPIF with partner organization principals. Too many SPIFs that

have not taken a partner’s GTM strategy and goals into account have

resulted in the reluctance of the partner organization to allow the

SPIF to run with their sales team. A trend we are seeing is for

individual SPIFs to tie into to partner/entity-level sales incentive

programs.

4. Getting the “Do-Get” Right

– Given the shorter timeframes, the

“do-get” proposition needs to be simple, clear, and compelling. Based on

your goal, determine if the reward structure should be a per unit/per

action basis, or hitting a certain volume. What is going to be more

enticing? What is going to best align with your goals? Second,

consider the reward itself. Is it cash, merchandise, or travel? Is it the

same reward for all, or is it a points-based access to a variety of

choices? (See the following page for some reward pros & cons.) Lastly,

a crucial part of creating your “do-get” scenario is to determine the

specific metrics needed to measure progress towards your goal,

establish your current baseline, and do the cost/benefit analysis on

your SPIF.

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5. Effective SPIF Marcom

– Key to your design is your marketing &

communication plan. Communication of the WIIFM (What’s In It For

Me) message to the sales reps needs to be clear, compelling, and

engaging. Also, don’t neglect to consider any materials or tools that

will support the sales reps’ execution efforts in the field with

end-customers.

6. Drive Ongoing Mindshare

– Lastly, don’t put all your efforts just into

the launch of a SPIF. Ongoing engagement is as important, if not more

important. Provide progress updates, share success stories, use a

leader board to encourage friendly competition, etc., to keep the SPIF

goal and reward top-of-mind through its lifecycle.

The "What’s In It For Me" message

to the sales reps needs to be clear,

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Pros Cons

Cash

 Directly impacts bottom line

 Good for short-term programs with limited infrastructure requirements

 Easy to communicate

 May have limitations in global markets

 May be considered part of regular compensation, less of a long-lasting impact

Reward Cards

 General high appeal due to branded card in-wallet

 Reloadable cards are ideal for long-term programs

 Fixed value cards are more suited for short-term programs

 Offered by majors: VISA, MC, AX are valid anywhere

 Infrastructure more costly due to card printing and distribution costs

 Depending on churn, new card issuance can be costly

 Global programs may have limitations due to distribution and/or exchange rates

Travel/

Merchandise

 Trophy/lifestyle are highly valued prizes

 Allows program managers to establish tiers that create a stretch goal for participants

 Can have longer mindshare impact for participants

 Program’s appeal is largely driven by reward options and perceived attainment ability

 Global programs may have limitations due to distribution or local tax codes

Considerations:

 _{What is the “do-get”}

proposition?

 Cash versus points?

 _{Evaluate in relation to}

main compensation structure – high enough for interest, not so high as to distract from primary goals

 _{Do the math – what is}

your investment compared to your return?

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An automated software system or platform is helpful in supporting program operations and

reducing administrative costs. It will help streamline processes and make data capture (or

integration) far easier. Another benefit of automation is that it makes it much simpler to

include registration as part of your SPIF deployment process.

There are a number of key benefits to the inclusion of registration as part of your standard

SPIF process, including:



_{Adoption Monitoring}

Requiring individuals who are going participate in a particular SPIF to “opt in” through

registration is a great way to get an understanding of the SPIF’s appeal (or popularity)

with your target audience. Having this insight early on will allow you to forecast outcome

(spend, administrative support needed, etc.). If registration levels are too low, it allows

you to evaluate whether the program’s “do-get” proposition needs to be adjusted or if

marketing communications needs to be increased.

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Having this insight early on will

allow you to forecast outcome.

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

_{Getting to Know Participants}

A second benefit of registration is that it allows you to capture profile information about

participants and, over time, get an understanding of who the top performing individuals

are, develop a relationship with them, and target them for specific initiatives.



Mindshare

Lastly, including a simple “opt in” registration is a great way to ensure that you are paying

individuals you’ve gained some mindshare with around the SPIF versus those who just

happened to have performed the action/result you’re rewarding.

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Measure Program Success

Best Practice #4

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Evaluating Program Success

As previously noted, standardizing the process and method of data capture (and use in the case of a claimless approach based on POS data) are the key to being able to measure impact and, ultimately, ROI. Below are three important methods of evaluating program success:

1) SPIF Performance Versus Goal

Assuming your goals were established at inception, an assessment is as simple as evaluating program (or individual SPIF) performance against the goal. By using an automated system to capture data during the SPIF’s lifecycle, progress toward the goal can be monitored throughout the process.

2) Sales Lift

Calculating sales lift over regular sales that would otherwise have occurred if the SPIF wasn’t implemented has always been the goal of channel marketers. Doing so requires a comparison between both a test group and a control group of partners. The test group represents those resellers who have participated in the program, and the control group represents a similar group of resellers who haven’t participated in the program.

Note: Sales should be analyzed before, during, and after the promotion period to truly understand the impact of outside trends that may affect sales (economy, seasonality, competitive conditions, etc.). The duration to be measured pre- and post-program depends upon your sales cycle. B2B products with longer sales cycles will typically require one to three months of data to establish a baseline.

3) Tactical Metrics

Just as important as evaluating the strategic “end result” is examining the tactical metrics. Tactical metrics help determine why a given program succeeds or fails. Examples include: number of partners participating, reasons for non-participation, average/highest/lowest results by rep, etc. Tracking tactical metrics

throughout the SPIF lifecycle can provide opportunities to make program adjustments and course corrections to insure that strategic level outcomes are met.

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Summary

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Frustrations/Challenges

Solutions

“Here today and forgotten tomorrow” Create a SPIF program that allows for building _{relationships with program participants over time}

Narcotic in nature Don’t over use, think short-term, ideally “first time” _behavior

Difficult to predict participation and

payout Pre-test/Preview program and include user registration in process Constantly have to invent new

programs, different processes for each Deploy SPIFs with a program framework, and automate to standardize processes

Not able to target the people I need to Align with Partner GTM, tie individual and partner entity programs

Program viewed as an entitlement Consider different reward options, don’t reward ongoing behavior

Can’t measure ROI Determine metrics during design, ensure proper capture during execution

To summarize, let’s recap with common frustrations and their solutions as addressed by the best practices, tips, and techniques outlined in this eBook.

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About CCI

CCI delivers comprehensive incentive solutions to optimize sales channel performance. As an enterprise software and services solutions provider, CCI enables channel marketers to manage and measure sales and marketing incentive programs throughout their demand chain, resulting in greater spending efficiency and improved program effectiveness. CCI provides a combination of on-demand software, professional services, and program management. CCI’s Professional Services team applies best practices to define and deploy programs that meet your business goals. Equally powerful is CCI’s software. Delivered on a SaaS platform, CCI automates your channel programs and partner activity for increased visibility, measurement, and ROI. Once deployed, CCI Program Management delivers services such as contact center support, auditing, and payment services to ensure program operational efficiencies. CCI is proud to work with market-leading companies in technology, telecommunications, and entertainment. For more

Executing a Successful SPIF

eBook from CCI: Channel Management Solutions

SPIFs are a great way to generate enthusiasm and mindshare, promote

market adoption of a new solution, incent the sales of a specific

combination of products, or even to reward soft skills development.

However, execution is where most programs fall short of success. This

ebook will help you to sidestep the pitfalls and provide useful and

practical advice to start a SPIF program and/or helpful tips to improve

under-performing SPIFs.

BEST PRACTICES, TIPS,

AND TECHNIQUES

3...

6...

8...

13...

14…………

19...

22……..….

24…………

Contents

Defining “SPIF”

SPIF Challenges

Best Practice #1: Design a SPIF Program Versus a Single SPIF

Best Practice #2: Optimize Your SPIF Design

Six Tips & Techniques for SPIF Design

Best Practice #3: The Value of Registration

Best Practice #4: Measure Program Success

Summary

The Classic SPIF (Sales Performance Incentive Fund)

Targeted at the

individual

Targeted at the

partner entity

1

Title

Definition

Attributes

SPIF

Loyalty

Contest

Rebate

Common Pitfalls of SPIFs

SPIF Challenges

6

Design a SPIF Program Versus a Single SPIF

Best Practice #1

8

Best Practice #1

:

Design the Program First, Then the SPIF

Program

There are a couple benefits to this approach:

Determining Program Objectives

Finding the Sweet Spot

Your

Program

Objective(s)

Processes and SPIF

Now that you have program framework with your objectives, let’s explore how to

optimize the actual SPIF design. Here are

Six Tips & Techniques

for SPIF design:

1. “Short-term” Definition

– A common mistake made by many channel

professionals rolling out SPIFs to an indirect channel is to plan the timeframe

for the SPIF in the same way they would for an internal sales audience. A SPIF

that would typically run for days or weeks with an internal audience should run

for months or quarters in the channel. While familiarity with an ongoing sales

incentive program will allow you to shorten timeframes in the channel, in

general “channel noise” requires more time for a SPIF to gain mindshare and

traction. Secondly, consider the timeframe in relation to the action requested.

A SPIF related to the introduction of a new solution is going to require a longer

timeframe than a SPIF whose goal it is to get old product off the shelf before

the release of an upgraded model.

A SPIF that would typically run for

days or weeks with an internal

audience should run for months or

2. Focus on First-Time Behavior

– SPIFs are best suited to incentivize first-time or

one-time behavior, as opposed to ongoing behavior. Ongoing behavior is best

_{Adoption Monitoring}

_{Getting to Know Participants}