How to set up a sales challenge?

When a company wants to boost the performance of its sales reps, setting up a structured and effective SPIFF is an essential strategic lever. 

The primary objective is to align the individual and collective efforts of the teams with the company's strategic objectives. Each SPIFF sales reps challenge must be meticulously prepared to address a specific issue, whether it's improving team commitment, increasing market visibility, boosting sales or supporting the launch of a new product. 

Together, we're going to explore all the crucial stages involved in preparing and defining a sales rep SPIFF!

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1. Define the objective

The main purpose of the SPIFF sales rep challenge is to help teams achieve an objective. As a reminder, this objective must be derived from the company's strategic objectives. 

"The objectives of the challenges are systematically adapted to the company's challenges at any given time. For example, at the moment we need to generate a sales pipeline, so we're going to organize a challenge with the SDRs to generate new opportunities."

Pierre-Emmanuel Branger, Account Executive at Spendesk & Podcaster at Systemes

"A sales rep challenge should not be based on the day-to-day work of the Sales, SDR or CSM, a challenge should exist and be based on a sales situation that we are struggling to resolve."

Wissam Zaiter, Sales Enablement at Doctrine

It is essential to ensure that the challenge addresses a specific problem facing the company: 

• Improve the commitment of sales reps
• Increase your company's visibility in the marketplace
• Boosting sales
• Renew as many contracts as possible
• Supporting the launch of a new product and/or service
• Developing a market segment
• Developing a geographical area
• Achieving a sales rep objective
• Responding to specific market demand
• And so on.

"At Glady, one of the things we offer is gift vouchers for works councils. It's a very periodic business, we make a lot of sales at the end of the year, so we set up a major sales rep SPIFF at the end of the year. We set up sales reps at the most appropriate times of the year for our business."

‍Paul Barret, Team Lead Sales Ops at Glady

Once the overall objective has been defined, it is important to ensure that the sales reps understand it, and to clearly set out what is expected of them so that they can meet it.

Next, we need to define the other conditions of the challenge, which are logically closely linked to the objective being pursued. At this stage, it's a question of define the people who will be targeted by the sales reps!

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2. Define the target

To ensure that the peripheral objectives, as well as the main objective defined in advance, are met, the target population needs to be determined, i.e. the most suitable and receptive population to enable the sales reps to meet their objective. 

Depending on your objective, you need to draw up a list of people to target. By way of example, here is a non-exhaustive list of potential criteria to define:

• Type: Prospects or customers
• Role: CEO, COO, CTO, CPO, CFO, Head of Sales, Head of Growth, Head of Operations, Head of Finance, Sales Manager, HR, etc.
• Account size: Very small company (1 to 10 employees), small and medium-sized company (11 to 250 employees), medium-sized company (251 to 5,000 employees), large company (More than 5,000 employees)
• Sector: Industrial, automotive, food, technology, real estate, construction, banking, etc.
• Geographical location: continent, country, region, department, city

Once the target audience for the SPIFF has been defined, the next step is to define the administrators and participants of the sales reps.

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3. Identify admins and participants

Depending on the objectives of the SPIFF, it will be necessary to select the administrators and sales reps most likely to achieve them. That's why it's vital to determine the targets of the SPIFF sales reps beforehand. This enables you to select the employees best suited to the target, according to their respective roles and skills.

The degree of granularity of the target will depend on the degree of granularity of the participants. In a situation where the objective is to increase sales, with a few exceptions, this should involve all the company's sales reps, under the direction of the Sales Director.

On the other hand, if the objective is to renew contracts for customers with more than 100 employees in the UK, the Account Managers and/or Customer Success Managers UK Small and Medium Enterprise (SME) and Key Accounts (KA) should be the participants, under the management of the Head of CSM and/or AM UK. 

As far as possible, it is not advisable to include participants with few or no qualifications to meet the objective. As well as diverting them from their core business, and therefore wasting their time, their success is uncertain given their skills on the topic.

"The SPIFFs that don't work are often because they're not tailored to the sales reps taking part. And it's the job of the Head of Sales or the Managers to get to know their sales reps so that they can motivate them better."

Sammy Girma, ex-Head of Sales Enablement at Mooncard and Co-founder of Salesmates

Of course, the list of participants also depends on the size of the company, its available human resources and their degree of specialization.

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4. Choose format 

The format of the sales rep challenge is crucial, as it will determine the state of mind of the employees taking part.

There are three possible formats: individual sales reps, group sales reps and a combination of individual and group sales reps.

In practical terms, the aim of the individual sales rep challenge is to reward the best employee(s) for their individual performance in relation to the target set and the associated performance indicators. This format makes it more difficult to engage and motivate all employees, as it rewards only the best. Ultimately, this can lead to tension and a split in the sales reps.

On the other hand, a group sales reps challenge rewards a group of employees, or even all the participants, if they achieve the target set and the associated performance indicators. The collective challenge creates a healthy and stimulating competitive environment, creating cohesion and collective emulation. 

Finally, it is possible to take the best of both worlds and set up a collective sales rep challenge, with one or more individual challenges inside, indexed on similar or different performance indicators.

"The individual challenge alone will create separations, a leader will stand out, detractors will appear, etc. The collective challenge will create a spirit of cohesion. The collective challenge will create a spirit of cohesion, they will create a discussion between them, routines, action plans to push the team upwards. This is much more beneficial for the company than if each person acted alone."

Geoffroy Pommier, Sales Manager at Spendesk

It is important to note that the format of the SPIFF depends above all on the initial objective of the challenge, but above all on the company's sales culture.

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5. Define frequency and duration

Firstly, let's talk about the launch date of a challenge, and once again, everything is linked to its initial objective! 

As we saw earlier, some SPIFF sales reps are organized at a specific time to respond to a problem that arises in a limited space of time. Examples include the launch of a new offer, the achievement of a target before the end of a period or the approaching end of customer contracts.

"At Mytraffic, we have a 3-month sales cycle, so we do our SPIFF sales reps at the end of the quarter to prepare the sales pipeline for the following quarter."

Frédéric Deloffre, Head of BDR at Mytraffic

As far as the frequency of SPIFF sales reps is concerned, as a matter of principle, they should be rare in order to reap the expected benefits, i.e. commitment, motivation and, ultimately, sales performance. 

"A sales rep challenge is a one-off thing, it has to break the sales reps' routine, they have to be more motivated than the rest of the time."

Geoffroy Villard, Head of Sales at Partoo

What's more, too regular a frequency encourages sales reps to wait for SPIFFs in order to perform, but it also leads to what's known as the "fridge effect".

"We don't do sales reps too frequently, otherwise the sales reps expect them to be commercially effective."

Paul Barret, Team Lead Sales Operations at Glady

Most experts on the topic recommend between 3 and 6 challenges per year and per group of participants.

Secondly, just as the frequency of a challenge needs to be exceptional, the duration of a challenge needs to be short. And for good reason: it has to generate motivation and enthusiasm, and we know that these are difficult things to maintain over the long term. 

"A long-term SPIFF sales rep challenge, over 1 month or a quarter, is the equivalent of the sales reps' original job, it's their core business which is already remunerated by the variable remuneration plan."

Geoffroy Pommier, Sales Manager at Spendesk

However, it is important to note that the duration must be in line with the objective! So a sales rep challenge, which by its very nature needs to be spread over several weeks or months, needs to be split into several parts to keep the sales reps committed.

"We do sales reps for very, very short periods, 1 day, 2 days sometimes a week, but it's rare."

Romain Darbon, Business Manager at Figaro Classifieds

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6. Select a theme

The success of a SPIFF depends mainly on the commitment of the sales reps. One of the simple things you can do to engage sales reps is to define a theme for the SPIFF.

An original and unique theme will make the SPIFF sales reps exceptional and create a buzz around them.

To define the theme, it is essential to start from the initial problem, the objective of the sales reps challenge, but also the type of challenge (individual, collective, both). It's essential to start with the structure and then add the gamification element.

"For example, let's imagine a challenge with 10 sales reps, with a system of pairs where we want to reward the best pair, but also the best sales rep over the whole challenge. In this example, we could then create a challenge on the theme of Formula 1 with a reward for the best team and one for the best driver."

Paul Barret, Team Lead Sales Ops at Glady

The best way to define a theme for a sales rep challenge is to brainstorm as a team, bringing together the stakeholders involved in organizing and running the sales reps challenge. 

"It's vital to select a theme that speaks to everyone, that is not gendered, that doesn't compartmentalize or separate individuals."

‍Geoffroy Pommier, Sales Manager at Spendesk

Sports events (Olympic Games, World Cup, tennis tournaments, etc.), recurring events that happen every year (Christmas, Halloween, Bastille Day, etc.), game shows (Who Wants to be a Millionaire?Wheel of Fortune, Incredible Talent, etc.), films and series (Harry Potter, Lord of the Rings, Hunger Games, etc.), video games (Mario Kart, Pokémon, Fortnite, etc.), board games (Monopoly, Cluedo, Trivial Pursuit, etc.), etc. 

Ultimately, you need to bear in mind that there is no limit to the themes that are possible and imaginable. What's more, the best themes can also come from sales reps. Indeed, what could be better than proposing a theme that comes directly from the wishes expressed by the sales reps? To gather their ideas, nothing could be simpler than submitting a questionnaire.

Finally, once the theme has been defined, it's important to ensure that everything revolves around it: team names, names of the objectives to be achieved, presentation visuals, awards, office decoration, launch ceremony, closing ceremony, awards, etc. These actions will only serve to reinforce the emulation and commitment of the sales reps!

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7. Determine the objectives to be achieved and the performance indicators to be monitored

Logically, the objectives to be achieved, and the associated performance indicators will derive from the objective of the sales rep challenge, i.e. to improve the commitment of the sales teams, increase the company's visibility in the market, boost sales, renew as many contracts as possible, support the launch of a new product and/or service, etc. 

Then, depending on this objective, the company can set one or more quantitative sub-objectives (number of calls made, turnover achieved over a given period, new customers, etc.) and/or qualitative sub-objectives (customer satisfaction, quality of sales reporting, quality of sales pitch, etc.).

Then, in the same way as for determining the main objective of the sales reps challenge, the sub-objectives to be achieved must be SMART (Specific, Measurable, Attainable, Achievable and Time-bound).

The clearer the company and its managers are about their objectives, and the more specific they are, the more the challenge will pay off in terms of results!

Here are 5 essential rules to follow when defining objectives: 

• Choose between one and three objectives (quantitative or qualitative) so as not to make the rules of the challenge too complex to understand and to avoid difficulties of interpretation.

"The more KPIs you add, the more visibility you lose for Sales and the more you allow Sales to think about how to twist the model rather than thinking about how to go about finding new contracts. We try to simplify things as much as possible. A maximum of 2 KPIs."

Jean De Kerle, Sales Ops Manager at Doctolib

• Choose indicators that are easy to measure so that you can communicate regularly and easily determine the end result.

"All performance indicators must be tangible and measurable, and there must be no notion of arbitration."

Geoffroy Pommier, Sales Manager at Spendesk

• Select indicators that everyone can understand, to involve the whole team.
• Adapt the objectives to each participant according to their role, seniority, account size, geographical area, and therefore their ability to achieve them. All participants must be on an equal footing, with the same chances of success, otherwise the commitment of some will not be there, thus influencing results.
• Allocate a predefined number of points according to the difficulty of the objectives (Example: Objective: Penetrate the pharmaceutical industry sector. Sub-objective: Make 25 Meetings with companies in the pharmaceutical industry (Account Executive: 1 Meeting = 1 point; SDR/BDR: 1 Meeting = 0.5 point).

"Very often, a sales rep challenge is collective, i.e. for the entire sales population (SDR, AE, CSM, etc.), but the reality is that for some it is not achievable or at least much more difficult. That's why we have to use a weighting system, otherwise some people won't be motivated to take part because they'll leave with a thorn in their side."

Wissam Zaiter, Sales Enablement at Doctrine

The KPIs to be monitored are necessarily linked to the objectives that the sales reps have to achieve, as it is these KPIs that will enable the points to be calculated and the sales reps to know where they stand in terms of achieving their objectives. KPIs also enable managers to coach sales reps throughout the challenge and provide them with areas for improvement.

Last but not least, visibility of performance indicators and the percentage of objectives achieved. This is one of the key factors in the success of a SPIFF, and it is vital that sales reps have real-time visibility of their objectives, and that they are easily accessible at all times.

In practical terms, by giving sales reps autonomy and eliminating exchanges between the various stakeholders, the company saves precious time, avoids frustration among sales reps and increases their commitment and motivation.

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8. Define the budget

Generally speaking, each company has a budget to allocate to sales reps per fiscal year, or at least this is common practice in the largest companies, and should be replicated in all companies for optimum budget management. Otherwise, poor cost management could limit or even cancel certain sales reps at strategic times for the company.

Very often, the budget allocated to sales reps is negotiated by the Sales Director with the company's financial teams. The best practice is to base the budget on a percentage of the turnover generated by the SPIFF sales reps. Of course, budget management and allocation need to be adapted and adjusted according to previous years.

"Once a sales rep SPIFF has worked well, it's easy to justify a budget to finance, because it pays for itself very quickly thanks to the business generated. It's a lever for negotiating a bigger budget."

Frédéric Deloffre, Head of BDR at Mytraffic

Once the budget has been defined, there are a number of criteria that can be used to allocate it as effectively as possible to each sales reps SPIFF. Here is the chronological order of the information to be taken into account when allocating the budget:

• The number of SPIFF sales reps
• The duration and/or difficulty of each sales rep SPIFF challenge
• The format (individual, group, both) and the number of possible winners per sales rep SPIFF challenge
• The different levels of winnings for each sales reps challenge

"Like most companies, we have a budget allocated each year for sales reps. We then divide this budget by team, and we also divide it according to the number of challenges. For example, at Glady, we have a big challenge at the beginning and end of the year, so we're going to allocate 80% of the annual budget to these two challenges. The remaining 20% will be used for smaller challenges throughout the year."

Paul Barret, Team Lead Sales Ops at Glady

This approach makes it possible to anticipate all sales reps, organise them better and manage their costs. It is advisable to keep a margin for manoeuvre, a part of the budget for possible SPIFF sales reps during the year to respond to one-off requests. If this part is not used during the year, it can be used at the end of the year for the last SPIFFs, with bigger rewards, more decoration and entertainment, a special venue, etc.

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9. Choose rewards

Quite often, the choice of rewards becomes a general headache. Each stakeholder feels that they will not be motivating or personalised enough to encourage participants to excel, or on the contrary that they will require too large a budget.

Firstly, it is important to note that if all the previous stages are respected, and there is sufficient communication and entertainment around the challenge, the participants will be committed to the sales rep challenge. Contrary to rewards that make a sales rep a success!

"Rewards are not the factor that determines Sales involvement and motivation. Of course, sometimes they are, but sometimes they're not. In my opinion, it all depends on how the challenge is organised."

Pierre-Emmanuel Branger, Account Executive at Spendesk & Podcaster at Systemes

However, rewards are still an important motivating factor for participants. To select the rewards best suited to your sales team, your company and the SPIFF itself, here are a few criteria to follow:

Determining rewards according to the needs and wishes of the sales reps

Generally, the choice of rewards is made by the organiser, who inevitably chooses what he or she would like. But why not ask the people who are most interested?

In fact, the best way to choose rewards is to ask participants about their needs and wishes. In this way, the rewards will be an indisputable motivating factor.

To do this, nothing could be simpler than submitting a questionnaire to them before the launch of the SPIFF sales reps!

The questionnaire obviously needs to be adapted to the points we'll be looking at next, such as the type of rewards, the format of the sales reps and the overall budget associated with the reps.

Examples of questions to ask in a questionnaire: 

• What types of reward motivate you most on a personal level?
• Are financial rewards more motivating than material gifts?
• Do you prefer learning-based rewards or moments of relaxation and entertainment?
• Do you attach importance to the sustainability of rewards (e.g. ethical gifts, environmentally-friendly experiences)?
• Do you prefer tangible, long-term rewards or ephemeral experiences?
• What are your hobbies or passions?
• Are there experiences you've always wanted to have or possessions you've always wanted to own?
• Do you prefer group activities or individual experiences?
• Would you be prepared to sacrifice quantity for quality when it comes to rewards, or vice versa?

Determining the type of reward: Financial or non-financial

It's a question that is the subject of much debate within sales reps... But Scott Jeffrey has the perfect answer, and one that we wholeheartedly endorse!

Through his documentary research "The Benefits of Tangible Non-Monetary Incentives", the University of Waterloo professor evaluated and compared the benefits of financial and non-financial rewards.

Here are the 4 main reasons why he recommends non-financial rewards for a sales reps SPIFF:

A) Evaluability

Non-monetary rewards, such as a gourmet restaurant, an electronic device, a sporting event or a trip, trigger emotions that surpass their monetary value. 

This is because the human brain projects and imagines positive scenarios associated with the reward, such as singing at a concert by your favourite artist or using your kitchen utensil to prepare a meal for your family. A non-financial reward triggers emotions that become more important than the mere amount it might be worth!

On the other hand, monetary rewards are less subject to the emotional side of things, since money is easy to evaluate and everyone knows exactly what it represents.

Ultimately, by offering non-financial rewards, employees evaluate them more on the basis of their feelings and emotions than on their value. As well as providing additional motivation, non-financial rewards leave a lasting impression, unlike monetary rewards, which tend to fade quickly.

B) Dissociability

The risk with a financial reward is that the recipient does not separate it from other sources of income such as salary or commission. By nature, the brain has difficulty making the distinction! 

The beneficiary therefore feels a greater sense of legitimacy and entitlement, which is difficult to reverse.

"We believe companies should use cash sparingly because it can be confused with remuneration."

‍David Ridell, VP Marketing at Marriott International

On the other hand, a non-financial reward is much more exceptional in nature, and is therefore perceived in a more isolated way, provoking much greater interest and motivation among employees.

C) Justification

A non-monetary reward, whatever it may be (a trip, a game, a decorative object, a concert, etc.), can be something that the recipient would never have dared to buy for themselves. 

However, it is a well-deserved reward for work done, so the beneficiary does not have to justify the expense.

"Winning something you wouldn't allow yourself to buy gives it extra value."

Christopher K. Hsee, Expert in behavioural psychology

The more difficult it is to justify a non-financial reward as a personal purchase, the more motivating it is! It's all about offering a reward that makes the recipient proud to have won it rather than just having bought it.

D) Social reinforcement

In addition to the opportunity to win a reward, the SPIFF sales reps offer the winner(s) social recognition, both within the company and externally.

At first glance, you might think that whether the reward is financial or non-financial, the social recognition is the same. But it's not!

Psychologically, a financial gain can provoke malicious and disinterested judgement on the part of others. Conversely, a non-financial reward arouses curiosity and attention, and generally leads to discussion. It is more socially acceptable to talk about a non-financial reward than about money!

For example, every time the winner of a sales reps SPIFF listens to music on the speaker they won, they are reminded of their success and can share their story with the environment around them. Non-monetary rewards are a constant reminder of success and tell a story in their own right. 

✅ Other profits 

Non-financial rewards leave a lasting impression on winners and non-winners alike, giving the company a positive image, promoting the employer brand and fuelling long-term motivation. What's more, it's much easier and more legitimate to market non-monetary rewards, and so create emulation and motivation. They are visually attractive and have a psychological impact. Employees see them, they want them, and they start to think about how they can boost their performance to win them.

Of course, non-monetary rewards should be preferred to financial rewards, but they should also be chosen according to : 

• The wishes and needs of its sales reps.
• The budget allocated to sales reps rewards. Depending on the size of the budget, the choice of reward is more or less extensive, and certain types of reward are possible.
• The length and/or difficulty of the sales rep challenge. In line with the budget, the longer and/or more difficult the challenge, the greater the reward.
• The format of the sales reps challenge (individual, group or both). Also in line with the budget, depending on the format of the challenge, the number of rewards and the number of beneficiaries will differ, thus modifying the choice of possible rewards.
• Potentially the theme of the SPIFF sales reps. Depending on the theme and the company's wishes, it is more or less possible to associate rewards with it.

"What can be done is to give the equivalent of a budget envelope, give instructions that it must, for example, be used for the whole team, and that it must be used for a specific purpose, such as an extreme sport, for example."

Geoffroy Pommier, Sales Manager at Spendesk