Spiffs: Good for Reps, Bad for Customers?
I spend probably too much of my spare time thinking about all things customer strategy. In fact, as I strolled home from a trip to the grocery store last weekend I got to thinking about spiffs. What I wondered was, is it possible to make spiffs customer-friendly?
Sure, spiffs can be highly motivating incentives to get salespeople to focus on one brand or product. They sell that item and they win big; maybe they get a bonus or are in the running for a trip or their commission percentage for that product gets a boost. Whatever the incentive, it seems that the only benefit is to the seller. The customer who encounters the spiff-hungry salesperson has a good chance of not getting the best product to suit his needs, but instead will likely be offered the product that delivers the salesperson her extra incentive.
Is it possible for a company that purports being customer centric to offer product-focused incentives to salespeople, dealers, etc., that also benefit end customers? What’s your opinion?
Sarah,
You make a great point. I think that if a company has done a good job with hiring the right people (like yourself) and supporting them with training and a positive, customer-focused work environment, then, like you said, salespeople are bound to make the choice that's best for the customer. Thanks for your comments.
I work in a commissioned area for window treatments, and while yes, it is a tremendous incentive to sell one certain brand/product during a Spiff if you're a good salesperson you should listen to the customer and really give them what they came in for, not what you want them to get, regardless if you're going to get the extra whatever or not. My workplace Spiffs last about a month 1/2 and we have atleast 4 different brands with atleast 10-15 different products for each so usually what the customer wants to begin with will be included on the Spiff. I never force a customer to get something they didnt come in for and Ive done really well. It just depends on the sale person, but more than likely you'll have a satisfied customer with a little extra cash in your pocket with no pressure to just get one certain thing.
In fact, you can hardly name a business that this dilemma doesn’t apply to. Even our own publishing business, 1to1 Media, must reconcile the interests readers have in getting the best, most objective information, and the interest the company has in securing advertising revenues from the very companies we write about.
The only way to manage this boiling cauldron of conflicting interests is to focus on a professional, trustworthy culture. If employees know that your company is sincerely interested in serving the best interests of customers, and that the customer’s self-interest comes BEFORE the profit motive at the firm, then you can deal with the issue effectively.
Martha and I have written a lot about this dilemma. In 1999, for instance, in our book The One to One Manager, we have a whole section devoted to exploring the need customers have for “trusted agents” – companies or people at companies who can be relied on for the most objective advice. And in our most recent book, Return on Customer, we dedicate nearly half of it to an exploration of the importance of earning and keeping customers’ trust, by always trying to act in the customer’s interest. This is the best way to ensure that your firm is not just focused on this period’s sales, but on building long-term shareholder value, as well.
There’s no magic button solution, however. The conflict will always be there.
Ginger-
For some reason, (probably because like you I think about customer strategy too much) when I read your blog post I immediately thought about a salesperson vs. a waiter.
Both may be trying to sell you on something specific, like a certain item they receive incentives for or that night's special, but only one is a pressure situation. Why? Because the waiter doesn't get anything if you opt for the special instead of what you had planned on eating.
I think companies have to make their salespeople more like waiters who are there to serve the customer. There's nothing wrong with mentioning options, but the pressure should stop there. I don't feel badly if I go with the Chicken Parmigiana over the Catch of the Day, so why should I if I stick to my guns and buy the car I want instead of last year's model the dealer is trying to unload?
Unfortunately I don't think salespeople can offer customers the right products if they have a carrot dangling in front of them, tempting them to sell something else instead.