Loyalty Register glossary
Spiff
A short-term bonus paid to a salesperson or channel partner for selling a specific product or reaching a narrow target.
A spiff is a short-term incentive, usually cash or a prepaid card, paid to a salesperson or channel partner for selling a specific product or reaching a narrow target within a set window. A manufacturer might pay store staff a fixed amount for each unit of a new model sold during its launch month. Unlike points that build toward a later reward, a spiff pays for one action, soon after it happens.
Updated · By Loyalty Register Editorial TeamRelated terms
How does a spiff work?
The sponsor defines the product, the period, the amount per unit or per target, and the proof required, such as a serial number, an invoice or a point-of-sale record. Participants submit claims, the sponsor validates them, and payment follows, often within a few weeks. A spiff can go to the individual seller, to the partner business, or be split between them. Who receives the money matters: a payment to the person at the counter changes what gets recommended, while a payment to the business may never reach the sales floor.
When does a spiff make sense?
Spiffs suit focused, temporary goals: launching a product, clearing old stock, winning attention against a competing brand, or getting sellers to learn a new line. They are quick to set up and easy to understand. They fit long-term goals poorly, because the effect usually stops when the payments stop. For sustained aims, such as growing a partner’s annual volume, a rebate or a tiered partner program is a better match.
What are the risks?
The first risk is paying for sales that would have happened anyway. If a product already sells well, a spiff adds cost without adding volume. The second is dependence: when spiffs run all the time, sellers learn to wait for the next one and treat it as part of their pay. The third is gaming, such as splitting orders, registering units that were never sold, or pushing a product onto customers it does not suit. Clear rules, claim validation and caps reduce all three.
How do you measure whether a spiff worked?
Compare sales of the target product during the spiff with a baseline, ideally from stores, regions or partners that did not run it, and keep watching for several weeks after it ends. A spike followed by a dip often means the spiff moved sales forward in time rather than creating new ones. Also check whether the spiff stacked with other incentives on the same sale, because the combined payout can be far higher than any single program intended.