how to build a smarter spif

How to Build a Smarter SPIF

…and the incentive strategy around it

www.channelmanagement.com [email protected]

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



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



channel sales & marketing programs

CCI Provides Solutions to:

Manage

Measure Optimize



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



CCI Clients

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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

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Making Sense of the Options

The Incentive Landscape



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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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)



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



• 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



• 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



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



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?



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



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



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?



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



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



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



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



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



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



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



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



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



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 [email protected]

how to build a smarter spif

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