Spiff
SPIF
A short-term bonus paid to salespeople for specific behaviors or outcomes. A tactical incentive on top of standard commission.
A spiff is a temporary bonus for a specific action. Close a deal in the first two weeks of the quarter: $2k spiff. Sell the new product add-on: $1k spiff per deal. Book five demos this week: $500 spiff.
Spiffs are tactical. They address a specific problem or priority right now. The company just launched a new product and needs reps to pitch it. Pipeline is thin and the team needs more outbound activity. A large deal is in danger of slipping and the team needs to pull it forward.
Use spiffs sparingly. If you run them every month, they lose their power. Reps start expecting them and adjust their behavior only when spiffs are active. The best spiffs are short (one to two weeks), specific (one clear action), and meaningful ($500-$5k depending on the ask).
Examples
A new product launch spiff.
The company launches an AI add-on. For the first 30 days, any rep who includes the add-on in a deal earns a $2k spiff on top of their standard commission. 40% of deals in that period include the add-on. After the spiff ends, it drops to 15%. The product team takes note.
A pipeline generation spiff for BDRs.
Pipeline is light entering Q3. The VP of Sales offers a $200 spiff for every qualified meeting booked this week. BDRs book 3x their normal meeting volume. Some meetings are lower quality, but the net increase in pipeline is worth it.
An end-of-quarter deal acceleration spiff.
Three deals totaling $500k are forecasted for Q2 but at risk of slipping. The CRO offers a $5k spiff per deal to the AE and SE if they close before quarter-end. Two of the three close. The third slips to Q3.
In practice
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Frequently asked questions
What does SPIFF stand for?
The origin is debated. Some say Sales Performance Incentive Fund. Others say it predates any acronym and comes from 'spiffing up' sales behavior. Regardless of etymology, a spiff is a short-term bonus for a specific sales action.
How much should a spiff pay?
Enough to change behavior but not so much it distorts the comp plan. For BDRs, $200-$500 per action. For AEs, $1k-$5k per deal or behavior. The spiff should feel like a meaningful bonus, not a rounding error.
Related terms
The percentage of revenue a salesperson earns for closing a deal. The variable component of their compensation.
The total compensation a salesperson earns if they hit 100% of quota. Base salary plus full variable commission.
The revenue target assigned to a salesperson for a specific period. The number they must hit to earn full commission.
A prediction of how much revenue the sales team will close in a given period. The number the CEO gives to the board.
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