If you’ve ever had a spiff program not work the way you’d hoped, you already know that partners can behave in completely unexpected ways…
Or are they really that unexpected? With a little forethought, if you consider what an incentive program is actually enticing, you will see pretty quickly that the partners’ behavior is completely expected. The question is: will that behavior create any problems down the line?
When vendors conjure up programs to correct for missed sales numbers, it can create a lot of noise. Consider the impact of a short-term program offering discounts. For prospects with deal cycles about to close, this new discount is pretty distracting and can cause them to take deals off the table to reassess.
Bad spiff programs attempt to shortcut what we know are immutable truths about sales, namely that there’s an appropriate process and trying to cut corners means you’re shortchanging something else, whether it’s the customer or next quarter’s numbers. They can also interfere with your documented, agreed upon joint business plan.
Here are a few ways spiffs can create more problems than they’re worth:
- They reward things like sales volume at the expense of margin
- By artificially compressing the sales cycle, they create problems for the next quarter
- They distract reps from doing their job correctly
- They distract prospects from becoming closed deals
The thing is, partners don’t want to NOT sell your solution. You can throw $100 or $1,000 at them for selling it, but the customer still has to buy it. If you’re bringing on partners that are truly trusted advisors to customers and prospects, part of what you’re bringing them on for is their understanding of customers’ needs.
When your spiff program encourages partners to offer your product at the wrong time to the wrong customer—rather than because it’s the right product for that customer—everyone loses. You want partners to offer it because it’s a good fit, not because there’s a spiff.
These programs intended to drive sales quickly often have the effect of encouraging a sales rep to not perform his or her job effectively by not seeking out the best customer for your product or service.
So how do you prevent these problems? Stay tuned for part two of Structuring a Program to Get the Partner Behaviors You Want, which will run on this blog in one week….