FEATURE

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Are you trying to motivate your Sales-people, yet nothing seems to get their attention? It’s an age-old issue that crosses all product genres -- especially automotive dealerships. What motiva-tional tool works best for your Salespeo-ple at your dealership? Most certainly, it’s the ‘carrot’ rather than the ‘stick.’

Spiffs are tactical budgets that are used to influence sales or sales partner’s be-havior by offering a direct reward above and beyond income and commission compensation. The effort is targeted -- a lever used to drive specific quantifiable behaviors and results.

Salespeople respond to different re-wards. However, cash (the ‘carrot’) is still the leading motivational tool. How you implement, track and manage your incentive program is the key to a suc-cessful outcome. Spiffs work wonders and, if designed and managed correctly, can lead to extraordinary results. People respond well to recognition and reward. This typically works much better than threatening their livelihood if they don’t sell more (the ‘stick’).

The Origin of Spiff (acronym: Sales Pro-gram (or Performance) Incentive Fund) When you mention Spiff to most ev-eryone in the auto business, there’s an

image of going back in time to dealer-ships that were owned and operated by our fathers or grandfathers -- to a time when Spiffs were used frequently to increase sales. A time when the re-sults were kept on whiteboards or chalk-boards, when claims captured on slips of paper (chits) piled on a manager’s desk, along with detailed reports kept on reams of paper in a controller’s of-fice. That seems like a forward-thinking approach when you dive into the origins of a Spiff.

Spiffs first appeared in a slang diction-ary in 1859; “The percentage allowed by drapers to their young men when they affect the sale of old fashioned or unde-sirable stock.”

More recently, Spiffs were used to launch home computers in the 80’s and

were big for introducing Apple and IBM home computers to the general public.

Spiff incentives were given to comput-er store salespeople for demonstrating these new products at a time when these personal demonstrations were essential for selling this not-yet-understood tech-nology.

Today, rather than being used to sell drapes or home computers, dealer-ships regularly are offered manufacturer or aftermarket product Spiffs. Whether it’s wiper blades or tires in your Parts Department, an upsell to a needed fluid flush in your Service Department, a new finance option in your F&I office, or for your Sales team to sell a used car that’s been on the lot for a few weeks, Spiffs can be a huge part of your dealership sales process.

HOW DO YOU MOTIVATE YOUR SALESPEOPLE? DO YOU SPIFF?

T H E C A R R O T B E AT S T H E P R O V E R B I A L “ S T I C K ”

B Y S E A N U G R I N

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How do ‘Old’ Motivation Spiff Tools meet ‘New’ Technology?

When walking into some dealerships, it seems like you’re walking into a scene from “Mad Men.” Men in suits and whiteboards on the walls filled with a bar graph of how the Salespeople are do-ing this month with a dot-matrix printer spewing out results from a box of green form-fed paper.

Technology is catching up to the car world, yet still not as fast as most other businesses. The ‘old school’ dealership is still run on whiteboards and ‘souped-up’ spreadsheets, so when new technol-ogy is introduced (meant to make things easier) that new solution is frequently looked at skeptically and often times not used, because, “that’s not the way we do things around here.”

Doing business with today’s tech-savvy shopper means that dealerships must keep up. The typical customer has per-formed research (sometimes LOTS of research) before coming into your deal-ership for Parts or Service on a specific problem.

Dealers must also explore new technol-ogy to motivate and incentivize their Salespeople and Service Advisors and Technicians to upsell and bring in more revenue. Competition is too great to not seek new tools that help motivate your Salespeople or Service Advisors and build revenue.

Spiffs Align Behavior with Your Strat-egy A dollar spent = product moved = gener-ated revenue. The relationship between spending and revenue are immedi-ate and direct. Spiffing is a tactic that supports a “push” strategy. It happens behind the scenes. In comparison, cou-pons or point of sale rebates support a “pull” strategy that is consumer-facing.Data by itself has no value. An automat-ed Spiff program will help manage and

drive your team to reach its peak perfor-mance. In today’s world of technology, dealership management simply sets up Spiff programs online and an automated interface allows Salespeople to see the results of their daily activity. This type of an advanced technology strategic tool drives behavior, allowing management to track the leaders and encourage all participants to improve their daily activi-ties and increase performance.

A wisely planned and coordinated incen-tive program will allow you to implement and track your team’s performance and efficiently administer the Spiff payouts. By strategically automating your Spiff program, all of your dealership staff will view dashboards, which can be moni-tored, putting real-time performance at your fingertips. Claim activity can be monitored to determine leaders and lag-gards. No need to run a lengthy report to see how your team is performing. Dashboards are becoming prevalent in today’s world, so they should include easy-to-read metrics that are simple to track and provide real-time compiled sales information, promoting cohesive push strategies.

“DATA BY ITSELF HAS NO VALUE. AN AUTOMATED SPIFF

PROGRAM WILL HELP MANAGE AND DRIVE YOUR TEAM TO REACH ITS PEAK

PERFORMANCE.”

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Do you have Evidence of ‘Gaming’ your Spiff Program?

Do certain salespeople work the system using miscellaneous codes to say they moved something when they didn’t? Are you being ‘gamed?’ Without the appro-priate codes tied to your DMS, Sales-people can easily enter in false codes and get credit for items they didn’t sell. If you’re not using the proper monitor-ing technology, your DMS can’t quickly catch these ‘gaming’ tricks.

A real-time spiff technology solution al-lows managers to verify the sale of your Spiffed items, allowing your office to see what’s being sold and when a product code trues-up to the DMS. Action can be taken to ensure that everyone plays by the rules and that no one gets away with nefarious actions.

Spiffs as a Behavior Modifier

Spiffs drive staff and partners to move to action, to activate and to self-motivate.When running an incentive program, how much time do you spend monitoring and

keeping your Salespeople updated on how they’re doing? During a Spiff event, every morning Salespeople are typically lined up outside your door waiting for the whiteboard to be updated for them to see how they are performing.

Thanks to technology, an automated Spiff process, including real-time dash-boards, will save your managers sev-eral hours of time and also easily affect Salespeople’s behavior. Salespeople can quickly look up how they’re doing with spiff programs without interrupting your workflow. They can see how much longer a program is running and also see any new spiff programs that may be ini-tiated. Also, automating the procedure allows the reconciliation process in your back-office to occur in an accurate and timely manner.

More importantly, technology helps them to monitor their own performance and Spiff bank (the ‘carrot’) compared with other Salespeople on the team, spurring and modifying their behavior to move more products and track how they’re competing against each other. If

they’re not performing compared to oth-er Salespeople, automating your Spiff program can easily change their behav-ior and kick them into a higher gear or run the risk of the ‘stick.’

“A WISELY PLANNED AND COORDINATED

INCENTIVE PROGRAM WILL ALLOW YOU TO

IMPLEMENT AND TRACK

YOUR TEAM’S PERFORMANCE

AND EFFICIENTLY ADMINISTER THE SPIFF PAYOUTS.”

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Spiff Fulfillment and Accounting

Spiff programs can be the bane of the accounting and Payroll Department’s existence.

Here’s a typical scenario:

Service Manager “Joe” tracks his pro-gram with a split-screen with his DMS open on one screen and a spreadsheet open on a second screen. On Joe’s desk is a pile of claim chits that have been turned-in by Service Advisors to get credit for sales of Spiffed products and services. All the while his Advisors are dropping in to ask how much money they have earned, did they get credit, and to turn in last-minute claims.

Joe does his best to verify transactions. He runs a report and enters it into a spreadsheet to close the program. He puts the chits in a folder and e-mails the reconciled spreadsheet to “Jane” at payroll. He drops the folder on her desk.

Jane reviews the report and then audits the claims. Sales Advisors drop into her office to drop off last-minute claims and ask when their Spiffs will be paid. It’s the end of the month so Jane is under pressure to close the month and provide reports to her General Manager.

Jane runs payroll and Spiffs are re-leased.

Neither Jane nor Joe are keeping his-torical information on their programs or analyzing results. They suspect the data is not 100% accurate but they accept they did the best they could.

In contrast, programs that are automat-ed and that pull accurate information from a DMS throughout the day provide highly accurate data that requires very little reconciliation. Programs auto-rec-oncile. Payroll only has to run a report and pay claims. Auto-generated reports can be pivoted and compared for analy-sis.

Conclusion

The automotive business landscape is rapidly changing for the better. Tools are being developed to make doing busi-ness easier. Generational changes in the sector are creating managers and lead-ers who want the same tools that their contemporaries have access to in other industries. They want to be productive. They want to evolve. They’re asking for these tools. Take a look at your incen-tives and others areas of your opera-tion. Could your dealership benefit from implementing a new approach?

Sean Ugrin is the CEO / Founder of Den-ver, Colorado-based Spiffit. Sean’s motor-space roots come from working globally with Bosch. As an adviser and consultant, Sean designed and developed business solutions that tracked automotive produc-tion and drove sales efforts worldwide. Every automotive company who partners with Spiffit witnesses outstanding results as a result of Spiffit’s focus on the provid-ing the ultimate customer experience.