What is SPIFFs (Sales Performance Incentive Fund)?
SPIFFs are short-term incentive payments offered to sales reps for achieving specific behaviors or outcomes, like booking demos for a new product or closing deals in a target segment.
SPIFFs (sometimes spelled SPIFs) are tactical compensation tools that sit on top of the standard commission plan. They're designed to drive specific, time-bound behaviors that the regular comp plan doesn't fully incentivize. Think of them as targeted bonuses for the next 30-90 days.
Common SPIFF Examples
SPIFFs are used to drive short-term priorities. Examples include: $500 per demo booked for a new product launch, $1,000 for every multi-year deal closed this quarter, $250 for each meeting set with a Fortune 500 account, or double commission on deals closed before month-end. The best SPIFFs are simple, time-limited, and tied to a specific strategic objective that the team wouldn't naturally prioritize.
SPIFFs vs Standard Commission
Commission is the ongoing variable component of OTE. SPIFFs are temporary bonuses layered on top. A rep earning 10% commission on a $100K deal gets $10K in commission regardless. A SPIFF might add an extra $2K if that deal was a multi-year contract closed during a specific promotion period. CROs should use SPIFFs sparingly. If you need a SPIFF every quarter, your core comp plan probably needs restructuring.
SPIFF Best Practices
Keep SPIFFs simple (one clear rule, one clear payout), short (30-90 days max), and strategic (aligned with a business priority). Pay them fast, ideally within the next pay cycle. And track ROI. If a $50K SPIFF budget doesn't move the metric you care about, that money was better spent elsewhere. The best VP Sales use SPIFFs 2-3 times per year for specific pushes, not as a permanent fixture.
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