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SPIFs have been around for a long time, but not many are done well. The concept is sound – a short-term (or longer-term) incentive program to promote market adoption of a new solution, incent certain salespeople to sell a specific combination of products, or even to reward soft skills development. However, execution is where most programs fall short of success. While SPIF programs can be especially effective for influencing behavior because they directly target the sales rep “where the rubber meets the road,” many companies implement SPIFs in a knee-jerk reaction to the need to “sell now!” and then are disappointed with the results. CCI’s webinar How to Build a Smarter SPIF will address common pitfalls, including: • The “here today, forgotten tomorrow” effect of many programs • Their narcotic nature – the more you use them, the more sales reps expect them • Encouraging sales people to sell products that may not meet the customer’s need • Difficulty of predicting reward payout and participation Learn how you can sidestep these issues with SPIF best practices, presented by CCI’s Senior Director of Marketing and Strategic Alliances, Dale Taormino.
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How to Build a Smarter SPIF
…and the incentive strategy around it
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
Frustrations & Challenges with SPIF (and Incentive) Programs
Here today, forgotten tomorrow
Narcotic in nature
Gets sales focused on the wrong things
Constantly have to invent new
SPIFs
Different processes for each program
Not able to target People I need to Program
viewed as entitlement
Can’t Measure ROI
Difficult to predict participation/reward
payout
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
Agenda
Part 1: Definitions – the incentive landscape
Part 2: Incentive Strategy & Design
Part 3: Incentive Execution & Measurement
Part 4: Current Incentive Trends & Summary
Why We Understand SPIFs
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
channel sales & marketing programs
CCI Provides Solutions to:
Manage
Measure Optimize
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
Incentive Solutions Throughout the Demand Chain Distributor Reseller Sales Reps Consumer
Co-op/MDF
Streamline management of joint marketing programs
Marketing Planner
Plan marketing programs, forecast and measure ROI SPIF & Rebates
Run short- and long-term incentive programs Sales Performance Rewards
Reward channel partners for attaining sales goals Trade In Rewards
Manage incentive programs requiring physical return of goods Opportunity Management
Deal Registration, Lead Management, Referral Rewards, and Special Pricing
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
CCI Clients
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 105 Novato, CA 94945 Phone 415.427.5100
Professional Services At Every Step
Program Design
Program Development
Program Evolution
Complete Incentive Solutions
Highly Configurable SaaS Application
ROI Metrics
Multi-currency/lingual
Fund allocation
New fund set up
Approval workflows
Partner and Activity –
add, deletes, changes
Email alerts
Program Management
Available follow-the-sun support
Claim administration
Payments
Program administration
Making Sense of the Options
The Incentive Landscape
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
A Sea of Different Programs – What’s Right?
SPIF
SPIFF
Volume Incentives
End User Rebates
Loyalty Program
Discounts
Rebates
Deal Reg
Soft Skill Rewards
MDF/Co-op
Activity Based
Referral Rewards
Growth Rebate
Sales Contest
Tiered Program
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www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
Incentive Programs Targeted to the Individual
Title Definition Attributes SPIF
• Stands for ‘Sales Performance Incentive Fund’
• Provides guaranteed rewards for participants (e.g. sell “X” get “$Y”)
• Usually short-term • May be quickly deployed • Requires re-launch of every program • Can tailor for different audiences (SEs/SRs) • Difficulty forecasting payout
Loyalty • Designed to build long-term mindshare and relationship
• May be designed to reward a variety of behaviors
• Rewards are often accumulative in nature • Longer plan cycle • More robust infrastructure required • Can “follow” participant
Contest • Rewards based on chance (won vs. earned)
• Subject to local laws • Good for driving mindshare, individual
/team motivation/excitement • Short- or long-term
Rebate • Drive product sales through temporary price decreases
• gather consumer info, promote new products
• ‘Instant’ or ‘mail-in’ most common • Short-term • Trade-In or Trade-Up program (rebate may
go to partner or consumer)
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
Title Definition Attributes Sales Performance Reward
• Reward for hitting certain pre-arranged sales goals
• Quarterly, semi-annual or annual • Different payouts for meeting/beating
quota • By partner or partner tier
Growth / Stretch Goal Rewards
• Designed to encourage growth, or stretch beyond committed sales targets or ‘normal’ performance
• Monthly, quarterly or annual • Typically tied to MoM, QoQ or YoY $
improvements, # new accounts, # new opportunities, # new products/solutions, # upsales, etc.
Value Rebate • Reward to achieving certain pre-arranged ‘soft’ goals (customer sat score averages, solution specializations or certifications)
• Targeted at activities/skills vs. final results • Often overlay on top of other
reward/rebate offerings
Volume Rebate
• Reward for hitting sales volume targets
• Quarterly or annual • % rebate(s) of sales volume, typically higher
% for higher volumes
Incentive Programs Targeted to the Entity
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
• Sales Training • Technical Training • Promotion/
Marketing • Product Specialists
• Close deals
Incentive Program Influence
Pre-Sale (Enablement/Influence)
Post-Sale (Reward/Recognition)
• Hunt for new business
• Register & work • opportunities • Follow up on leads
• Sales goal, ‘Soft’ goal, and growth goal attainment
Strategic
Transactional
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
• Sales Training • Technical Training • Promotion/
Marketing • Product Specialists
• Close deals
Incentive Program Influence
Pre-Sale (Enablement/Influence)
Post-Sale (Reward/Recognition)
• Hunt for new business
• Register & work • opportunities • Follow up on leads
• Sales goal, ‘Soft’ goal, and growth goal attainment
Strategic
Transactional
• Performance Rewards
• Growth/Stretch Goal Rewards
• Volume Rebates
• MDF/Co-op Programs • Joint Marketing
Planning
• SPIF/Rebates • Loyalty Programs • Sales Contests • Trade-in programs
• Deal Registration • Lead Management • Referral Rewards • Special Pricing
Strategy & Design
How to Design a Program that Gets Results
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
First: Determine Your Objective(s)
Quantitative Goals Revenue, profit, unit sales, average order size, sales/revenue target for products?
Qualitative Goals Skills/knowledge improvements, customer sat improvement, partner loyalty to your brand?
Timeframe This year, quarter, ongoing?
Your Objective
Corporate Sales/
Marketing/ Channel Strategy
Customer Purchase Process
Environment Competition Geography
Partner Go-to-Market
Strategy
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
Second: Determine Behaviors and Key Contributors
What key behaviors do you need to drive? What partners exhibit those?
What barriers exist? Level of trust with partner orgs? Your share of
wallet with partner orgs?
Increased # of new prospect meetings booked? Ongoing, superior customer service?
Visibility/engagement with individuals at partner org? Willingness of orgs to let
you engage?
Speed of lead follow up? Promotion of particular product or brand?
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 105 Novato, CA 94945 Phone 415.427.5100
Third: Determine Type and/or Mix of Programs
Meeting or Beating Quota
Improved consultative selling skills
Sales of Product Model “X” Before
Release of Model “Y”
Influence End-user to try new Product
Increasing % of new solution sales
Behavior Targeted Program Type
SPR/Rebate
SPIF
Loyalty and/or Value
Trade-Up/Trade-In
Growth/Stretch Goals
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
Fourth: Determine Best Reward Structure to Drive Results
Title Pros Cons
Cash • Directly impacts bottom line • Good for short-term programs
with limited infrastructure requirements
• Easy to communicate
• May have limitations in global markets
• May be considered part of regular comp, less long lasting impact
Reward Cards • Reloadable cards are ideal for long-term programs
• Fixed value are more suited for short-term programs
• Offered by majors: VISA, MC, AX and are valid anywhere they are
• General high appeal due to branded card in-wallet
• Infrastructure more costly due to card printing and distribution costs
• Global Programs may have limitations due to limited distribution and/or exchange rates
Travel/ Merchandise
• Trophy/Lifestyle value of prizes
• Allows program managers to create “tiers” that create a stretch goal for participants
• Can have longer mindshare impact for participants
• Program’s appeal is largely driven by reward options and perceived attainment ability
• Global programs may have limitations due to distribution or local tax codes
What is the ‘do/get’ proposition?
Evaluate in relation to main comp structure – high enough for interest, not so high as to distract from primary goals
Do the math - your investment to your return
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
Lastly: Determine your Metrics to Measure Success
• Baseline - what is the current state?
• Key Performance Indicators - How are they defined? What are the strategic metrics (program level) vs. tactical metrics (operational level)?
• Data Sources - What sources of data will be needed to measure these? How will this influence systems/processes?
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
4 Best Practices for Designing a Program that Gets Results
1. Use the 4-Step Process Start with objectives Then behaviors/contributors Then program mix Lastly rewards
2. Target key elements of the demand chain Considers role of entities and individuals focuses on influencing the behaviors that make the most difference Address barriers (principals may be “gatekeepers”)
3. Keep it simple SPIFers KISS applies – especially at individual contributor level Guidelines should answer for individual or organization clearly:
“What do you want?”, “What do I do?”, “What do I get?” 4. Determine how you’ll measure success at the outset
You cant measure what you don’t collect or have data for
Execution & Measurement
Optimizing Execution for Program ROI
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
The Key Components for Program Execution
• Communication strategy Pre-launch Launch During program lifecycle
• Program Operations Registration Earning & claiming processes Rewards issuance
• Measurement & ROI Tactical metrics capture Reporting
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
Your Communication Strategy Should Have Three Parts
Pre-Launch Communication GOAL: Pre-test program and communication to fine tune
• Review/get feedback from key partners or partner council • Pilot with a particular partner audience
Launch GOAL: Make ‘do-get’ proposition clear, generate program enthusiasm
• ‘Roadshow’ program via in-person or webinar format • Print & online promotion (email, newsletter, poster, etc.) • Guidelines, FAQ, Quick Reference Guides, etc. available on program site
Program Lifecycle GOAL: Ongoing education & maintaining mindshare • Monthly emails (reminder, case studies, tips, distance from goal) • SPIF overlays (as appropriate) • Dashboards/Reporting to track individual & team progress
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
Key Variables of Program Operations
• Registration Process Registration Requirements
• Claiming/earning Process Claim based or back end data Data/metrics capture
• Program support User support Auditing
• Issuing of Rewards Fulfillment process
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
Measuring ROI
• Standardized data capture at both the
tactical & business outcome levels
• Claim should capture ‘total deal value’ vs. only specific SPIF related sale
• Assure one ‘version of the truth’ by making sure ‘cleansed’ POS data is viewable to all.
• Reports should cover Program, Partner & Individual level performance info against your metrics
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
5 Best Practices for Optimal Program Execution
1. Pre-test if possible, or at least preview Understand Program appeal to all audiences Evaluate administrative processes Help forecast outcome, and fine tune before broader launch
2. Include registration at start whenever possible Provides an early indication of program popularity Capture profile information about participants on the form Can be further automated if participants already in your PRM
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
5 Best Practices for Optimal Program Execution
3. Take an incentive platform approach Leverage single infrastructure for multiple programs Reduce admin costs through automation & outsourcing operations Gather performance data on participants over time
4. Communicate, Communicate, Communicate Building awareness takes time Share success stories, progress against goal Keep it fresh to maintain excitement
5. Remember, Recognition Is as Important as Reward Elevates success of top performers Sets benchmark to share Doesn’t need to be costly Establishes case study and best practices
Summary
The Latest Trends in B2B Incentives
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
Top B2B Incentive Program Trends
• Individual earnings contribute to entity incentive programs SRs performance rolls into Sales Performance Reward or Rebate
Program as points or $ value • Alliance oriented incentives
Targeting multi-vendor solutions • More programs rewarding ‘soft skills’
Lead/Referral Submittal Execution of key marketing campaigns Training & certification attainment New logo opportunities opened, close rate on registered deals
• Ties to Marketing Programs Directing awards (all or %) to soft funds (MDF, Co-op) Allowing funding of partner run SPIFs with MDF dollars Incentives tied to marketing activity execution
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 214 Novato, CA 94945 Phone 415.427.5100
Frustrations & Challenges with SPIF (and Incentive) Programs
Here today, forgotten tomorrow
Narcotic in nature
Gets sales focused on the wrong things
Constantly have to invent new
SPIFs
Different processes for each program
Not able to target People I need to Program
viewed as entitlement
Can’t Measure ROI
Difficult to predict participation/reward
payout
www.channelmanagement.com info@channelmanagement.com
7250 Redwood Blvd. Suite 105 Novato, CA 94945 Phone 415.427.5100
In Conclusion, Let’s Return to Where We Began
Frustrations/Challenges Solutions Discussed
Here today and forgotten tomorrow Loyalty program to build relationship & bias toward your products over time
Narcotic in nature Don’t over use – think short-term, ideally ‘first time’ behavior
Gets sales focused on the wrong things #2 in design – target the right behaviors in right people
Different processes for each program Automated to standardize processes
Difficult to predict participation & payout Pre-test/Preview program & include user registration in process
Constantly have to invent new SPIFs Loyalty program on incentive platform
Not able to target the people I need to Tie individual & entity programs
Program viewed as an entitlement Different reward options, switch focus to ‘soft goals’
Can’t measure ROI Determine metrics during Design, insure proper capture during Execution
Thank you!
Dale Taormino dale.taormino@channelmanagement.com
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