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To Spiff or Not to Spiff? That is the Question!

By Ron Henson on Jan 9, 2013

Ok, full disclaimer.  I know that this is a polarizing topic in dealerships everywhere.  That having been said, without bias to either side, I would like to present an argument for both sides and see where the community lands.  Hilary Clinton once said, "Freedom means the right of people to assemble, organize, and debate openly.

So, SPIFF.  A dirty word to some dealers and a heavenly gateway to results for others.

Position A: I have spoken with many dealers who take the position that their sales consultants are very well compensated within the confines of their pay plan and should be expected to perform to certain standards without cash bonuses playing a part.  One dealer also expressed the very analytical opinion that the additional expense generated in manpower required to track such cash bonuses and assure that they are properly accounted for in payroll for tax purposes was not worth any "lift" they would receive from offering them.  Phew, quite a mouthful indeed.  And furthermore, (Yes, he had more to say) offering spiffs is like giving your consultants Crack Cocaine!  Give it to them one time and they are addicted.  

Position B: I heard it said by more than one GM in my NADA General Dealership Management class (Many moons ago)  that if they offer up a Saturday morning $100 spiff for the 1st unit sold, oldest unit sold, and for a hat trick, they are guaranteed to have a good day.  In fact, many sales consultants will chase that "Cash in Fist" so hard they will stack appointments for Saturday!  (Hmm, does that statement belong in position A?)  Someone even went so far as to say that he would offer a full commission at the end of the month or a 50% cash spiff on the spot in lieu of said full commission. (I do not advocate that for accounting and payroll legality reasons but it was his store surprise)  Any guesses on how many opted on the "Cash on the spot?"

In conclusion, I have my own thoughts about spiffs but I throw this debate out to the Ultra Intelligent DrivingSales community for a healthy discussion on what your position is......... TO SPIFF OR NOT TO SPIFF?

Let's move some metal!

 

Comments

Wow, Ron, what a great topic. I completely understand the sentiment about paying someone already to do their job, so spiffs seem over the top. And once you give a mouse a cookie, he's going to want some milk. However, I think one of the most important things in a leader is knowing what motivates your people. Everyone is motivated differently and it's not uncommon for average salespeople to be strongly motivated by money and short-term accomplishment. In this case, spiffs would seem a viable option. Of course, if your pay plans are set up differently or you know your team doesn't thrive in that setting, spiffs would be obsolete. Great question, Ron!

Jan 10, 2013

Once again and as usual, Lindsey Auguste is dropping the knowledge. Way to go Lindsey!

Jan 10, 2013

As we progress in this digital age, what about "spiffing" people to grow the business digitally? For example, "spiff" a guy at the morning meeting who put an idea out there that worked.

"Hey, let's video our sales guys Sunday morning run and put it on YouTube showing what we're like outside of the business."

Offer incentives to think outside the box....and watch as the ideas start to flow - even from an older team that's not very tech-savvy.

Jan 11, 2013

Well said Kyle! I like the way you think

Jan 11, 2013

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