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Spiff
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A spiff, or spiv, is slang for an immediate bonus for a sale. Typically, spiffs are paid, either by a manufacturer or employer, directly to a salesperson for selling a specific product. It is sometimes given as SPIF or SPIFF, a backronym, with invented words to fit the letters.
Origin
[edit]An early reference to a spiff can be found in a slang dictionary of 1859; "The percentage allowed by drapers to their young men when they effect sale of old fashioned or undesirable stock."[1] An article in the Pall Mall Gazette of 1890 on the practices in London shops uses the term:
a "spiff" system is usually adopted, spiffs being premiums placed on certain articles, not of the last fashion, indicated by a marvelous hieroglyphic put on the price ticket. These marks are well known by the assistant, and the almost invisible mystic sign explains why an article, wholly unsuitable, is foisted on the jaded customer as "just the thing."[2]
The Oxford English Dictionary suggests that (apart from a corruption of specific) it could be connected with the use of the word in that period to mean a dandy or somebody smartly dressed (hence spiffy, and to spiff up - to improve the appearance of a place or a person), but nobody seems to have been able to disentangle the threads of which came first, or what influenced what, or where the word originally came from.[1][3]
References
[edit]Further reading
[edit]- Zoltners, Andris A.; Sinha, Prabhakant; Lorimer, Sally E. (2006). The Complete Guide to Sales Force Incentive Compensation: How to Design and Implement Plans that Work. Amacon. ISBN 0814473245.
- Caldierero, Fabio; Coughlan, Anne T. (2007-01-01). "Spiffed-Up Channels: The Role of Spiffs in Hierarchical Selling Organizations". Marketing Science. 26 (1): 31–51. doi:10.1287/mksc.1060.0204.
Spiff
View on Grokipediafrom Grokipedia
Spiff (or ''spif'') is slang originating in 19th-century British English, meaning to make something neat, spruce, or more attractive.[1][2] The term, first recorded around 1873, derives from "spiffy," denoting a well-dressed or dapper person, and evolved to describe excellence or something first-rate by the late 1800s.[3]
In modern usage, particularly in sales and marketing, "spiff" commonly refers to a short-term incentive bonus (backronym: Sales Performance Incentive Fund or SPIFF) awarded to salespeople for meeting specific targets, such as promoting particular products.[4] These incentives, often cash or prizes, motivate immediate performance and differ from standard commissions by their tactical, time-limited nature.[5]
Definition and Etymology
Core Definition
In sales terminology, a spiff refers to an immediate cash or non-cash bonus paid directly to a salesperson for selling a specific product or achieving a short-term sales goal, serving as a targeted motivational tool to drive immediate performance.[5][6] These incentives are typically funded by manufacturers as "push money" to promote their products or by employers to meet urgent business objectives.[4][7] The term is commonly spelled as "spiff," "spif," or in uppercase as "SPIFF," which stands for Sales Performance Incentive Fund, though the acronym is often considered a backronym applied to the existing slang.[5][8] Unlike standard commissions, which provide ongoing percentage-based earnings tied to overall sales volume, spiffs are short-term and product-specific, offering quick rewards to shift focus toward high-priority items without altering base compensation structures.[6][9] Common examples of spiffs include cash payouts for exceeding quotas on new product launches, gift cards for closing deals on targeted inventory, or merchandise rewards for promoting specific vendor items during promotional periods.[10][5] The term may etymologically relate to "spiffy," slang for being smartly dressed, reflecting an origin around 1853 in British English for something polished or presentable.[11][12][13]Historical Origins
The term "spiff" emerged in 19th-century slang, closely linked to "spiffy," which denoted a well-dressed or dapper individual, originating around 1853 in British English as a descriptor for neat or stylish appearance.[11][13] This connection suggests "spiff" may have evolved from expressions related to grooming or adornment, with possible roots in "spiflicate," an 18th-century dialect term meaning to confound or thoroughly dress up something.[14] The precise etymology remains uncertain, though it likely draws from British dialect influences emphasizing attractiveness in dress or manner.[1] The earliest documented use of "spiffs" appears in John Camden Hotten's 1859 A Dictionary of Modern Slang, Cant, and Vulgar Words, where it is defined as "the per-centages allowed by drapers to their young men when they effect sale of old goods," marking its initial association with incentive payments in retail contexts.[15] Hotten also records "spiff" contemporaneously as referring to a well-dressed man or "swell," reinforcing the word's dual ties to appearance and commerce.[15] Scholars note that the word's origins are obscure, with links to British tailoring slang, where "spiff" denoted an extra payment for handling fancy or high-quality goods, possibly reflecting practices in cloth trade, as evidenced in Hotten (1859). By 1891, the verb form appeared in sales contexts, meaning "to allow a certain sum as commission on (an article)" (OED).[16] This linguistic foundation in apparel and bonus structures laid the groundwork for its later adoption in sales environments during the 19th century.Historical Development
19th-Century Usage
In the late 19th century, the spiff system gained prominence in British retail as a targeted incentive for moving slow-selling merchandise. A notable description appeared in an April 2, 1890, article in the Pall Mall Gazette, which detailed practices in London drapers' shops: "To balance this network of penalties a 'spiff' system is usually adopted, spiffs being premiums placed on certain articles, not of the last fashion, but still good, which it is desirable to clear. These premiums are marked on the articles in hieroglyphics, and the assistant who sells them gets the spiff." This method allowed shop owners to discreetly signal high-priority items to clerks, fostering immediate sales efforts without alerting customers or competitors. During the Victorian era, spiffs played a key role in the increasingly competitive retail landscape, particularly in textile and apparel sectors. Manufacturers leveraged these bonuses to encourage clerks in drapers' and haberdashers' shops to promote specific fabrics, such as surplus woolens or cottons, and accessories like ribbons or trimmings that might otherwise linger on shelves. The practice addressed the challenges of overstocked inventories amid rapid urbanization and expanding consumer markets, where seasonal fashions quickly rendered goods obsolete. Early implementations of spiffs often involved immediate cash payments to clerks upon completing a qualifying sale, enabling quick turnaround of outdated stock. Representative cases included bonuses for disposing of lingering items like last-season's hats or ties, which helped maintain cash flow in bustling urban shops while rewarding proactive selling. Similar incentive mechanisms began appearing in early American retail contexts in the early 20th century, adapting the British model to local dry goods trade.20th-Century Evolution
Following World War II, spiffs gained widespread adoption in American sales practices, becoming integrated into department store policies and manufacturer rebate programs amid the era's economic expansion and rising consumer demand. In the 1940s, these incentives were commonly awarded to salespeople for achieving high volumes of electronic goods sales, helping to clear inventory and stimulate post-war retail growth.[17] By the 1950s, material incentives like spiffs formed a core competitive strategy for U.S. manufacturers and distributors in consumer goods sectors, such as television sets, where they encouraged retailers to prioritize specific products through direct bonuses or premiums to maintain market share and price stability.[18] This period marked the evolution of spiffs from ad hoc bonuses to more structured programs, particularly in high-volume industries like automotive and consumer electronics. In the automotive sector, manufacturers used spiffs to target sales of particular models or slow-moving inventory, offering immediate cash rewards to dealership salespeople to drive volume. Similarly, in consumer goods, these programs shifted toward formalized rebate systems where producers directly compensated retail staff for promoting designated items, enhancing efficiency in distribution channels. In the United Kingdom, spiffs maintained continuity from their earlier informal use in retail, with ongoing application for boosting seasonal merchandise sales. By the late 1960s, such practices were embedded in British retail operations, as evidenced by bonus payments for selling specific products in electronics shops.[19]Modern Usage and Applications
In Sales Incentives
In contemporary sales strategies, spiffs serve as short-term incentives lasting days to weeks, aimed at motivating teams to achieve specific, immediate goals such as promoting underperforming products or clearing seasonal inventory.[20] These programs emphasize product specificity, for instance, by offering bonuses for upselling complementary accessories like phone cases with new devices, which focuses salesperson efforts on high-margin opportunities.[20] Payout structures commonly feature tiered rewards, where salespeople earn escalating bonuses—such as $100 for the first 10 qualifying sales and $200 for each additional 10— to encourage sustained performance without overcomplicating administration.[21] Best practices for spiff implementation include clear, aggressive communication through kickoff meetings, weekly leaderboards, and updates to build excitement and maintain focus, while avoiding demotivation of core sales activities by positioning spiffs as supplements to base commissions rather than replacements.[21] Integration with customer relationship management (CRM) systems enables real-time tracking of metrics like demo completions or unit sales, ensuring transparency and swift payouts.[20] Return on investment (ROI) is evaluated primarily through metrics such as sell-through rates and incremental revenue, with budgets typically set at 5-7% of average salesperson income to balance motivation and cost efficiency.[21] For example, tech companies have deployed $50 spiffs for each add-on sale of new software modules during launches, driving rapid adoption over 30-day periods.[22] In retail, goal-based spiff programs for inventory clearance can yield approximately 25% sales uplift in targeted categories compared to baseline performance.[23] Overall, well-designed spiffs can generate 15-25% short-term sales lifts when tied to measurable objectives, as evidenced by goal-driven programs.[20]In Commission Software
The emergence of dedicated commission management software has modernized the administration of spiffs, transforming manual processes into automated systems that ensure accuracy and efficiency in sales incentives. A prominent example is Spiff, a sales compensation platform founded in October 2017, which specializes in automating spiff calculations alongside broader commission structures.[24] This software emerged as a response to the limitations of spreadsheet-based tracking, enabling real-time payouts and seamless integration with sales data sources to minimize discrepancies in incentive distribution.[25] Key features of such platforms include user-friendly, spreadsheet-like interfaces that allow administrators to define custom spiff rules without extensive coding, facilitating rapid setup for short-term incentives. API connections to CRM and ERP systems, such as Salesforce and NetSuite, pull in real-time transaction data to trigger spiff eligibility and calculations automatically. Additionally, built-in analytics tools provide insights into spiff performance, including redemption tracking and overall incentive effectiveness, helping organizations optimize programs for better sales outcomes.[26][27] In February 2024, Salesforce acquired Spiff for $419 million, integrating its technology into the Sales Cloud to enhance incentive compensation management, while Spiff's solutions continue to serve clients.[28][29] The impact of these tools is evident in their ability to significantly reduce administrative errors inherent in manual processes, fostering trust between sales and finance teams while supporting scalable deployment across global organizations. For instance, SaaS companies leverage Spiff for managing partner channel incentives, where automated spiff handling ensures timely rewards and compliance in distributed ecosystems. Industry analyses highlight how such automation streamlines incentive management, enabling high-growth firms to handle complex, variable spiff programs without proportional increases in overhead.[30]Related Concepts and Variations
Comparison to Other Bonuses
Spiffs differ from commissions in their structure and timing, serving as short-term, one-off incentives tied to specific product sales rather than ongoing percentage-based rewards on overall performance. For instance, a spiff might offer a flat payment of $100 for closing a single targeted deal, providing immediate gratification, whereas commissions typically involve recurring payouts like 5% of total sales volume, fostering sustained effort over time.[31][4][32] In contrast to sales contests, which often reward teams for meeting aggregate goals such as quarterly revenue targets, spiffs focus on individual achievements for promoting particular items, enabling precise behavioral nudges without broader group dynamics. Contests may span weeks or months and emphasize collective outcomes, potentially diluting individual accountability, while spiffs deliver targeted, rapid rewards to drive immediate uptake of underperforming products.[33][34] The advantages of spiffs include their ability to generate quick motivation bursts at relatively low cost, as they allow companies to allocate fixed budgets for specific campaigns without altering base compensation structures. However, overuse can lead to channel conflicts, such as tensions between direct sales teams and partners competing for the same incentives, and may erode long-term focus if reps prioritize short-term gains. Some sources suggest limiting spiffs to 4-6 per year to balance these benefits and mitigate drawbacks like dependency or burnout.[35][36][37]Backronyms and Slang Extensions
In sales contexts, "spiff" has been retroactively expanded as a backronym, with one prevalent form being "Sales Performance Incentive Fund Formula," which refers to structured programs allocating funds for short-term sales bonuses; this usage gained traction in the late 20th century as incentive practices became more formalized in business literature.[4][38] Another variation, "Special Promotion Incentive For Field Force," appears in marketing materials to denote incentives targeted at on-the-ground sales personnel, emphasizing promotional efforts in specific territories.[39][40] Independent of its sales connotation, "spiff" extends into broader slang as a verb phrase, "to spiff up," meaning to enhance or tidy the appearance of a person, place, or object to make it more attractive or neat; this informal usage derives from the 19th-century English dialect adjective "spiff" or "spiffy," denoting dandified or stylish dress, and entered common American English parlance by the early 20th century without direct ties to commercial incentives.[12]References
- https://www.[merriam-webster](/page/Merriam-Webster).com/dictionary/spiff