Terms

Spiff

A spiff is a short-term, immediate bonus paid to a salesperson for achieving a specific goal, like selling a particular product or booking a set number of demos. Companies use these incentives to quickly move specific inventory, launch new products, or meet short-term sales targets. While typically a cash bonus, a spiff can also take the form of gift cards, merchandise, or travel incentives.

Historical Context

The term "spiff" dates back to 19th-century England, originally describing a bonus paid to retail clerks for selling old or undesirable merchandise. This practice helped shopkeepers move slow-selling stock while motivating their sales staff. By the early 20th century, spiffs were a common practice in both wholesale and retail.

The concept continued to evolve, with a notable modern example being Apple's use of spiffs in the 1980s to drive computer sales. This strategy significantly boosted their market presence and helped solidify the spiff's place in modern sales culture. Today, they remain a popular short-term incentive across many industries.

Common Uses

Spiffs are versatile tools used to drive specific sales behaviors and achieve immediate business objectives. Companies strategically deploy them to influence sales team focus and accelerate results in key areas, often outside of the standard compensation plan.

  • Products: Pushing high-margin items or new product lines to gain market traction.
  • Inventory: Clearing out old or overstocked merchandise to make room for new items.
  • Adoption: Encouraging the sale of a newly launched product or service.
  • Loyalty: Building brand preference among channel partners or third-party resellers.

Spiff vs. Stipend

While both are forms of payment, spiffs and stipends serve fundamentally different purposes in a business context.

  • Spiff: A variable, short-term bonus tied directly to performance, such as selling a specific product. It's ideal for driving immediate sales goals, like clearing old inventory or promoting new items. However, it can sometimes encourage unhealthy competition. Enterprises and mid-market companies use spiffs for tactical sales boosts.
  • Stipend: A fixed, regular payment meant to cover specific expenses, often for interns, trainees, or as a general allowance. It provides predictable income but isn't tied to sales performance. This makes it suitable for roles where support and enablement are prioritized over direct sales incentives across companies of all sizes.

Industry Applications

Spiffs are a go-to tactic across numerous industries to energize sales teams and hit specific targets. They are particularly effective in environments with tangible products and clear sales cycles, allowing companies to adapt them for various strategic goals.

  • Retail: clearing out seasonal merchandise or slow-moving inventory.
  • Manufacturing: incentivizing distributors to prioritize and push new product lines.
  • Technology: driving sales of specific software bundles or new feature adoption.

Benefits and Drawbacks

Spiffs can be a powerful tool for motivating sales teams and achieving quick wins, but they aren't without their risks. When implemented thoughtfully, they can drive significant results. However, if poorly managed, they can lead to unintended negative consequences.

  • Benefits: Spiffs provide a direct incentive, boosting sales team motivation and focusing efforts on specific, short-term goals. This is highly effective for launching new products or clearing out excess inventory quickly.
  • Drawbacks: They can encourage negative behaviors like "sandbagging," where reps delay sales in anticipation of a spiff. This can also foster unhealthy competition and lead reps to prioritize spiffed products over the customer's best interest.

Frequently Asked Questions about Spiff

Are spiffs considered taxable income?

Yes, spiffs are considered taxable income by the IRS. They are treated as supplemental wages, and companies must report them accordingly. Salespeople should expect to pay income and payroll taxes on any spiff payments they receive, whether in cash or as a non-cash prize.

How are spiffs different from regular sales commissions?

Spiffs are short-term bonuses for specific, tactical goals, like selling a new product. Commissions are a core part of a salesperson's compensation, calculated as a percentage of total sales revenue over a longer period. Spiffs are extra, commissions are standard.

Can spiffs create a negative sales culture?

They can if not managed properly. Over-reliance on spiffs may lead to unhealthy competition, reps prioritizing spiffed products over customer needs, or "sandbagging" sales. A balanced incentive structure is key to avoiding these pitfalls and maintaining a positive team environment.

Other terms

Oops! Something went wrong while submitting the form.
00 items

Serviceable Available Market

Serviceable Available Market (SAM) is the segment of the total market that your business can realistically serve within its geographical reach.

Serviceable Available Market

Channel Partner

A channel partner is a company that works with a manufacturer or producer to market and sell their products, software, or services to customers.

Channel Partner

GPCTBA/C&I

GPCTBA/C&I is a sales qualification framework for understanding a prospect's goals, plans, challenges, timeline, budget, and authority.

GPCTBA/C&I

AppExchange

AppExchange is Salesforce's cloud marketplace, offering a vast ecosystem of apps and expert services to extend Salesforce functionality.

AppExchange

Loss Aversion

Loss aversion is our tendency to feel the sting of a loss more acutely than the pleasure of an equivalent gain.

Loss Aversion

Sales Funnel Metrics

Sales funnel metrics are key data points that track how effectively you're moving potential customers from awareness to a final purchase.

Sales Funnel Metrics

Annual Recurring Revenue (ARR)

Annual Recurring Revenue (ARR) is the predictable income a company expects to receive from its customers over a one-year period.

Annual Recurring Revenue (ARR)

Affiliate Marketing

Affiliate marketing is a performance-based model where affiliates earn a commission for promoting another company’s products or services.

Affiliate Marketing

B2B Intent Data

Learn about B2B intent data, including how B2B intent data enhances sales strategies, sources of B2B intent data, leveraging B2B intent data for competitiveness.

B2B Intent Data

Account-Based Analytics

Account-Based Analytics measures engagement and impact across target accounts, not just individual leads, to guide B2B sales and marketing efforts.

Account-Based Analytics

Drip Campaign

A drip campaign is a series of automated messages sent to prospects or customers over time to nurture leads and drive engagement.

Drip Campaign

Integration Testing

Integration testing is a software testing phase where individual modules are combined and tested together to verify their interaction.

Integration Testing

InMail Messages

LinkedIn InMail messages are a premium feature that lets you directly message any LinkedIn member, even if you're not connected to them.

InMail Messages

Direct Sales

Direct sales involves selling products directly to consumers in a non-retail setting, such as at home, online, or person-to-person.

Direct Sales

B2B Marketing Analytics

Learn about B2B marketing analytics, including key components of B2B marketing analytics, & getting started with B2B marketing analytics.

B2B Marketing Analytics

Champion/Challenger Test

A Champion/Challenger test pits a new 'challenger' against the current best-performing 'champion' to see which one performs better.

Champion/Challenger Test

Sales Compensation

Sales compensation is the total pay a salesperson receives, including salary, commissions, and bonuses, structured to motivate performance.

Sales Compensation

B2B Data Enrichment

Learn about B2B data enrichment, including benefits of B2B data enrichment, implementing B2B data enrichment strategies, B2B data enrichment vs. data cleaning.

B2B Data Enrichment

Programmatic Advertising

Programmatic advertising uses AI and real-time bidding to automate the buying and selling of digital ad space, targeting specific audiences.

Programmatic Advertising

Dynamic Segment

Dynamic segments are self-updating lists that group contacts based on real-time data, ensuring your outreach is always timely and relevant.

Dynamic Segment

Corporate Identity

Corporate identity is the visual and verbal persona of a company, encompassing its logo, color palette, communication style, and core values.

Corporate Identity

Voice Broadcasting

Voice broadcasting is an automated system that delivers a pre-recorded voice message to a large list of phone numbers simultaneously.

Voice Broadcasting

FAB Technique

The FAB technique is a sales framework connecting product features to advantages and then to the specific benefits for the customer.

FAB Technique

B2B Leads

Learn about B2B leads, including identifying quality B2B leads, generating B2B leads effectively, & B2B leads vs. B2C leads: understanding the differences.

B2B Leads

Cross-Site Scripting

Cross-Site Scripting (XSS) is a web security vulnerability that allows attackers to inject malicious scripts into trusted websites.

Cross-Site Scripting

B2B Demand Generation Strategy

Learn about B2B demand generation strategy, including key elements of demand generation, & crafting your demand generation plan.

B2B Demand Generation Strategy

Lightning Components

Lightning Components is a UI framework for building dynamic web apps for mobile and desktop devices on the Salesforce Lightning Platform.

Lightning Components

Proof of Concept

A Proof of Concept (PoC) is a small exercise to test whether a business idea or project is technically feasible and has real-world potential.

Proof of Concept

Lead List

A lead list is a curated database of potential customers (leads) with contact information and other key data for sales and marketing outreach.

Lead List

Lead Conversion

Lead conversion is the process of turning a prospect into a customer by getting them to complete a desired action, such as making a purchase.

Lead Conversion

B2B Demand Generation

Learn about B2B demand generation, including strategies for effective B2B demand generation, & key components of a demand generation program.

B2B Demand Generation

Landing Pages

A landing page is a standalone web page created for a marketing campaign. It’s where a visitor “lands” after clicking an ad or email link.

Landing Pages

CSS

CSS, or Cascading Style Sheets, is the code that styles a website. It controls the colors, fonts, layout, and overall look of a web page.

CSS

Dialer

A dialer is software that automatically dials phone numbers for agents, boosting call efficiency and connecting them to live prospects faster.

Dialer

On Target Earnings

On-Target Earnings (OTE) is a salesperson's total potential pay, combining base salary and commission for hitting their sales quota.

On Target Earnings

Customer Lifecycle

The customer lifecycle is the journey a person takes from first becoming aware of your brand to becoming a loyal, repeat customer.

Customer Lifecycle

Closed Lost

Closed Lost is a sales term for a deal that didn't go through. The prospect decided not to buy, or the sales team disqualified them.

Closed Lost

C-Level or C-Suite

The C-suite, or C-level, refers to a company's most senior executives. Their titles usually start with 'Chief,' such as CEO, CFO, or CTO.

C-Level or C-Suite

CCPA Compliance

CCPA compliance is adhering to the California Consumer Privacy Act, a law that grants consumers more control over their personal data.

CCPA Compliance

Sales Forecast

A sales forecast is a projection of future sales revenue. It's a crucial tool for businesses to make informed decisions and allocate resources.

Sales Forecast

Forecasting

Forecasting uses historical data to make informed predictions about future trends, helping businesses anticipate outcomes and plan accordingly.

Forecasting

Personalization

Personalization is the practice of using data to tailor products, services, or content to an individual's specific needs and preferences.

Personalization

Sales Director

A Sales Director leads a sales team, develops strategies, and is responsible for meeting a company's revenue targets.

Sales Director

Business Process Management

Learn about business process management, including benefits of implementing BPM, steps to effective BPM, common BPM mistakes to avoid, & BPM tools and software.

Business Process Management

Account-Based Selling

Account-Based Selling is a B2B strategy where sales and marketing treat high-value accounts as markets of one, using personalized outreach.

Account-Based Selling

Touchpoints

A touchpoint is any time a potential or existing customer comes in contact with your brand, from seeing an ad to receiving an email.

Touchpoints

Sales Funnel

A sales funnel is a model illustrating the customer's journey from initial awareness to the final purchase, narrowing down leads at each stage.

Sales Funnel

Video Email

Video email involves embedding a short video directly into an email. This lets recipients watch your message without leaving their inbox.

Video Email

Always Be Closing

“Always Be Closing” (ABC) is a sales mantra meaning every action a salesperson takes should be with the ultimate goal of closing the sale.

Always Be Closing

Customer Success

Customer Success is a business strategy focused on proactively helping customers achieve their goals with your product or service.

Customer Success

Buyer's Journey

The buyer's journey maps the path a potential customer takes, from first becoming aware of a problem to making a final purchase decision.

Buyer's Journey

Sales Forecast Accuracy

Sales forecast accuracy is a key metric that compares your predicted sales revenue against the actual sales revenue you ultimately achieve.

Sales Forecast Accuracy

Sales Coaching

Sales coaching is a process where managers help reps improve their skills and performance through personalized feedback, training, and guidance.

Sales Coaching

Trade Shows

Trade shows are events where companies in a specific industry showcase their latest products and services to find new customers and partners.

Trade Shows

Ballpark

Learn about ballpark, including estimating with ballpark figures, understanding ballpark estimates in sales, & ballpark estimates vs. precise quotes.

Ballpark

Open Rate

The open rate is the percentage of recipients who opened an email. It's a primary indicator of a subject line's effectiveness.

Open Rate

Price Optimization

Price optimization is the process of finding the ideal price for a product or service to maximize profitability or other business objectives.

Price Optimization

Marketing Attribution Model

A marketing attribution model is a framework for assigning credit to the marketing touchpoints that lead a customer to convert.

Marketing Attribution Model

SPIN Selling

SPIN selling is a sales technique using a sequence of questions—Situation, Problem, Implication, Need-Payoff—to uncover a buyer's needs.

SPIN Selling

Follow-up

A follow-up is a communication sent after an initial interaction to continue the conversation, provide more value, or prompt a response.

Follow-up

Sales Kickoff

A sales kickoff (SKO) is an annual event for a sales team to celebrate wins, align on goals, and get motivated for the upcoming year.

Sales Kickoff

Regression Testing

Regression testing ensures that new code changes don’t negatively impact existing features. It's a key step to maintain software quality after updates.

Regression Testing

Consultative Selling

Consultative selling is an approach where salespeople act as expert advisors, diagnosing customer needs to provide the most suitable solutions.

Consultative Selling

Warm Outbound

Warm outbound is a sales strategy for contacting prospects who've shown interest in your brand through prior engagement, like website visits.

Warm Outbound

Direct-to-Consumer

Direct-to-Consumer (DTC) is a business model where companies sell products directly to customers, bypassing traditional retail middlemen.

Direct-to-Consumer

B2B2C

Learn about B2B2C, including benefits of B2B2C model, key strategies for B2B2C success, & B2B2C vs. B2C vs. B2B: understanding the differences.

B2B2C

Enterprise

An enterprise is a large-scale organization, often a corporation, defined by its complex structure and substantial number of employees.

Enterprise

Demographic Segmentation in Marketing

Demographic segmentation divides a market into groups based on traits like age, gender, and income, allowing for more targeted marketing efforts.

Demographic Segmentation in Marketing

Representational State Transfer Application Programming Interface

A Representational State Transfer (REST) API is a web service that uses a simple, stateless architecture for systems to communicate online.

Representational State Transfer Application Programming Interface

Bounce Rate

Learn about bounce rate, including understanding bounce rate implications, key factors affecting bounce rate, & reducing your bounce rate effectively.

Bounce Rate

Ransomware

Ransomware is a type of malicious software that encrypts a victim's files, holding them hostage until a ransom is paid for the decryption key.

Ransomware

Gone Dark

Going dark is when a once-responsive prospect suddenly stops all communication, leaving you wondering what went wrong.

Gone Dark

Website Visitor Tracking

Website visitor tracking collects and analyzes data on user behavior to understand their journey and improve the overall user experience.

Website Visitor Tracking

Sales Intelligence Platform

A sales intelligence platform is software that provides sales teams with data and insights about prospects to help them sell more effectively.

Sales Intelligence Platform

Multi-threading

Multi-threading allows a single CPU core to run multiple independent threads (or tasks) at the same time, boosting efficiency and performance.

Multi-threading

Kubernetes

Kubernetes is an open-source system for automating the deployment, scaling, and management of containerized applications.

Kubernetes

Demand Generation Framework

A demand generation framework is a strategic process for creating awareness and interest in your product, ultimately driving new business.

Demand Generation Framework

Browser Compatibility

Learn about browser compatibility, including understanding the importance, common challenges, best practices, & tools for testing.

Browser Compatibility

Predictive Lead Generation

Predictive lead generation uses data and AI to find prospects most likely to buy, helping teams focus their efforts on high-value leads.

Predictive Lead Generation

Closed Question

A closed question is a type of query that elicits a simple, often one-word answer like 'yes' or 'no,' or a specific, factual response.

Closed Question

Scrum

Scrum is an agile framework that helps teams structure and manage their work through a set of values, principles, and practices.

Scrum

DevOps

DevOps is a culture and set of practices that merges software development (Dev) and IT operations (Ops) to shorten development cycles.

DevOps

Pipeline Coverage

Pipeline coverage is a key sales metric. It's the ratio of your total open pipeline value to your sales quota for a specific period.

Pipeline Coverage

Marketing Mix

The marketing mix is the set of marketing tools a company uses to sell products, defined by the 4Ps: Product, Price, Place, and Promotion.

Marketing Mix

Salesforce Administrator

A Salesforce Administrator is a certified professional who manages and customizes the Salesforce platform to meet a company's specific business needs.

Salesforce Administrator

MOFU

MOFU, or Middle of the Funnel, is the crucial evaluation stage in the buyer's journey where leads compare solutions to their known problem.

MOFU

Horizontal Market

A horizontal market is one where a product or service is designed to meet a common need for a wide array of customers, regardless of their industry.

Horizontal Market

Product Recommendations

Product recommendations are a marketing strategy that uses customer data to suggest relevant products, boosting sales and customer engagement.

Product Recommendations

Sales Engagement

Sales engagement is the sum of all interactions between a seller and a prospect, aimed at building a relationship and moving a deal forward.

Sales Engagement

B2B Contact Base

Learn about B2B contact base, including building an effective B2B contact base, & strategies for expanding your contact base.

B2B Contact Base

Firmographic Data

Firmographic data is information used to classify firms. It includes attributes like industry, employee count, location, and annual revenue.

Firmographic Data

Weighted Sales Pipeline

A weighted sales pipeline forecasts revenue by assigning a closing probability to each deal, giving a more accurate picture of potential income.

Weighted Sales Pipeline

Batch Processing

Learn about batch processing, including benefits of batch processing, best practices for implementation, & common use cases.

Batch Processing

Point of Contact

A Point of Contact (POC) is the designated individual or department that serves as the main hub for information and communication on a matter.

Point of Contact

B2B Sales Process

Learn about B2B sales process, including key components of B2B sales processes, & crafting an effective B2B sales strategy.

B2B Sales Process

Sales Pipeline Management

Sales pipeline management is the process of organizing, tracking, and managing potential deals through every stage of your sales funnel.

Sales Pipeline Management

Site Retargeting

Site retargeting is a marketing strategy that shows ads to people who have previously visited your website but left without converting.

Site Retargeting

Return on Marketing Investment

Return on Marketing Investment (ROMI) measures the revenue generated by a marketing campaign relative to the cost of that campaign.

Return on Marketing Investment

Call Disposition

Call disposition is the process of labeling the outcome of a call. It helps sales teams track interactions and plan their next steps effectively.

Call Disposition

Digital Advertising

Digital advertising is the practice of delivering promotional content to users through various online and digital channels like social media or search engines.

Digital Advertising