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.
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.
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.
While both are forms of payment, spiffs and stipends serve fundamentally different purposes in a business context.
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.
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.
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.
Platform as a Service (PaaS) is a cloud model where a provider delivers a platform for users to develop, run, and manage applications online.
Learn about B2B, including what is it, its key elements, the benefits of B2B partnerships, the differences between B2B and B2C, and strategies for effective marketing.
Sales automation uses software to streamline and automate repetitive, manual sales tasks, freeing up reps to focus on selling.
A weighted sales pipeline forecasts revenue by assigning a closing probability to each deal, giving a more accurate picture of potential income.
Product recommendations are a marketing strategy that uses customer data to suggest relevant products, boosting sales and customer engagement.
A persona is a semi-fictional profile of your ideal customer, based on market research and real data about your existing customers.
An API (Application Programming Interface) is a software intermediary that allows two applications to talk to each other and exchange information.
Inbound lead generation is the process of attracting potential customers to your business with valuable content and tailored experiences.
Git is a distributed version control system that tracks changes in code, allowing developers to collaborate and manage project history effectively.
Lead qualification is the process of determining which prospects are most likely to become paying customers based on predefined criteria.
Event tracking is the method of collecting data on specific user actions, or 'events,' on a website or app, such as clicks or downloads.
Inside sales is a remote sales process where reps sell products or services via phone, email, and other digital tools instead of in person.
Docker is a tool that packages applications and their dependencies into isolated environments called containers for easy deployment and scaling.
Single Sign-On (SSO) is an authentication method allowing users to access multiple applications with one set of login credentials.
The FAB technique is a sales framework connecting product features to advantages and then to the specific benefits for the customer.
CRM hygiene involves regularly cleaning and updating your customer data to ensure your CRM system remains a powerful and reliable tool.
Time on site, or session duration, is a key web metric that tracks the total time a visitor spends on your website during a single visit.
Private labeling is when a company rebrands a product made by a third-party manufacturer and sells it as their own.
A positioning statement is a concise description of your target market and how your product or service uniquely fills their needs.
Sales prospecting techniques are methods used by sales teams to identify, contact, and qualify potential customers, also known as prospects.
Outbound leads are potential customers a business proactively contacts through outreach like cold calls, emails, or social media.
Application Performance Management (APM) monitors and manages an application's performance, availability, and the experience of its end-users.
Forward revenue is the total value of all active, committed contracts that are expected to be recognized as revenue in the future.
Geo-fencing creates a virtual boundary around a real-world location. It triggers actions on a device when it enters or exits this area.
Gated content is premium online material, like an ebook or webinar, that users can only access after providing their contact information.
Customer centricity is a business approach that puts the customer at the heart of every decision, aiming to build loyalty and long-term value.
Employee engagement is the emotional commitment an employee has to their organization, motivating them to contribute to the company's success.
Firmographic data is information used to classify firms. It includes attributes like industry, employee count, location, and annual revenue.
A hybrid sales model blends traditional and digital sales methods to engage customers across multiple channels and buying preferences.
Marketing analytics involves measuring and analyzing marketing data to understand campaign performance and improve return on investment (ROI).
Warm calling is contacting prospects with a prior connection, like a referral or social media interaction, to make your outreach more relevant.
A value chain is the series of business activities required to create and deliver a product or service, from conception to the final customer.
On-Target Earnings (OTE) is a salesperson's total potential pay, combining base salary and commission for hitting their sales quota.
Demographic segmentation divides a market into groups based on traits like age, gender, and income, allowing for more targeted marketing efforts.
A lead magnet is a free incentive offered to potential customers in exchange for their contact details, like an email, to generate sales leads.
Customer Acquisition Cost (CAC) is the total cost a business spends to gain a new customer. It includes all sales and marketing expenses.
Enterprise Resource Planning (ERP) is a system of integrated software that businesses use to manage and automate their core day-to-day processes.
Employee advocacy is the promotion of an organization by its staff members, who share positive messages and content through their personal networks.
Consumer Relationship Management (CRM) is a strategy for managing all of a company's relationships and interactions with its customers.
Think of a trademark as a brand's unique signature—a word, symbol, or phrase that legally protects its identity and sets it apart from the rest.
Microservices is an architecture where apps are built as a collection of small, independent services that communicate with each other over APIs.
Sales rep training is the process of equipping your sales team with the skills, knowledge, and tools to effectively sell and hit their targets.
Funnel analysis is a method for understanding the steps users take to complete a goal, revealing where they drop off in the conversion process.
A sales pitch is a persuasive presentation of a product or service, aimed at convincing a potential customer to make a purchase.
Targeted marketing focuses on specific consumer groups whose needs align with your product, allowing for more personalized and effective messaging.
A sales bundle groups multiple products or services into a single offering, often at a discounted price to provide greater value to customers.
Scalability is a company's ability to handle increased workloads or market demands without a drop in performance or a spike in costs.
A small to medium-sized business (SMB) is a company whose employee count and annual revenue fall below certain industry-specific thresholds.
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.
A sales stack is the suite of tech tools—from CRMs to prospecting software—that sales reps use to close deals faster and more efficiently.
Learn about ballpark, including estimating with ballpark figures, understanding ballpark estimates in sales, & ballpark estimates vs. precise quotes.
Learn about business to customer, including maximizing B2C sales strategies, B2C vs. B2B: unveiling differences, & core principles of B2C success.
Channel partners are third-party firms that help market and sell a company's products or services, acting as an indirect sales force.
Dynamic segments are self-updating lists that group contacts based on real-time data, ensuring your outreach is always timely and relevant.
Economic Order Quantity (EOQ) is the ideal order quantity a company should purchase to minimize its total inventory-related costs.
A sales call is a real-time conversation between a salesperson and a prospect, aiming to persuade them to purchase a product or service.
Forecasting uses historical data to make informed predictions about future trends, helping businesses anticipate outcomes and plan accordingly.
An Account Executive (AE) is a sales professional responsible for closing new business deals and managing existing client relationships to drive revenue.
Channel marketing is a strategy where a company sells its products or services through third-party partners, like resellers or affiliates.
Demand forecasting is the process of predicting future customer demand for a product or service based on historical data and market trends.
Pay-per-click (PPC) is an ad model where you pay a fee each time your ad is clicked. It's a method of buying targeted visits to your website.
Sales Operations Management streamlines sales processes, tech, and data analysis to help sales teams sell more effectively and efficiently.
Overcoming objections is the process of addressing and resolving a prospect's concerns or hesitations to move a sale forward.
Feature flags let you remotely control features in your app without new code. This enables safe testing, gradual rollouts, and quick rollbacks.
Revenue forecasting is the process of estimating a company's future revenue, using historical data and market trends to guide strategic planning.
Learn about BAB formula, including implementing BAB in sales strategies, crafting an effective BAB pitch, & comparing BAB with other sales frameworks.
Product-Led Growth (PLG) is a business strategy where the product itself drives user acquisition, conversion, and expansion.
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.
Learn about buyer, including identifying your ideal buyer, understanding buyer's journey, & evaluating buyer decision processes.
A Data Management Platform (DMP) is a software that collects and organizes audience data from various sources for targeted marketing efforts.
Personalization in sales means tailoring outreach to a prospect's specific needs, interests, and context to make communication more relevant.
Compliance testing ensures a product or system adheres to specific regulations, standards, or policies set by governing bodies or organizations.
Average Customer Life is the average time someone remains a customer. It's a key metric for predicting revenue and measuring customer loyalty.
Learn about B2B2C, including benefits of B2B2C model, key strategies for B2B2C success, & B2B2C vs. B2C vs. B2B: understanding the differences.
A Sales Director leads a sales team, develops strategies, and is responsible for meeting a company's revenue targets.
Affiliate networks are platforms that act as intermediaries between publishers (affiliates) and merchant affiliate programs.
Account-Based Marketing (ABM) benchmarks are key metrics used to measure the performance and success of your targeted account strategies.
Multi-channel marketing uses various platforms—like email, social media, and direct mail—to engage with customers wherever they are.
A messaging strategy defines what your brand says, how it says it, and where it says it to connect effectively with your target audience.
Hadoop is an open-source framework designed for the distributed storage and processing of extremely large data sets across clusters of computers.
A hard sell is an aggressive sales technique that uses high-pressure tactics to push a customer into making an immediate purchase decision.
Marketing performance is the process of measuring a campaign's effectiveness against set goals using key metrics like ROI and conversion rates.
A go-to-market (GTM) strategy is an action plan that outlines how a company will reach target customers and achieve a competitive advantage.
Learn about B2B marketing analytics, including key components of B2B marketing analytics, & getting started with B2B marketing analytics.
Pay-per-click (PPC) is an internet advertising model where businesses pay a fee each time one of their online ads is clicked by a user.
The buying process is the journey a customer takes from first realizing a need to making a final purchase decision and evaluating it afterward.
An Ideal Customer Profile (ICP) is a detailed description of the perfect, hypothetical company that would get the most value from your product.
Virtual selling is the process of selling to customers remotely using technology like video calls, rather than meeting them in person.
A Customer Relationship Management (CRM) system is a tool that centralizes customer data to help manage interactions and nurture relationships.
Demand is the economic principle describing a consumer's desire and willingness to purchase a specific good or service at a particular price.
Sales territory planning is the process of dividing customers into geographic areas to be assigned to specific sales reps or teams.
Learn about bulk API, including how it works, the advantages of using it, common use cases, and tips for optimizing it.
Customer Success is a business strategy focused on proactively helping customers achieve their goals with your product or service.
A drip campaign is a series of automated messages sent to prospects or customers over time to nurture leads and drive engagement.
Learn about buyer behavior, including understanding the buyer's journey, influencing factors in buyer behavior, & buyer behavior and marketing strategy.
Digital analytics is the analysis of data from digital channels to understand user behavior and optimize online experiences for business goals.
Lead enrichment tools are platforms that automatically add missing data to your leads, like contact info, firmographics, and buying signals.
Sales Operations KPIs are measurable metrics that track the efficiency and effectiveness of a sales team's operational processes.
Sales intelligence is technology that gathers and analyzes data to help salespeople find and understand prospects and existing clients.
The Jobs to Be Done (JTBD) framework focuses on understanding customer needs by identifying the specific 'job' they are trying to accomplish.