Which Practice Sells More Products: Spifs Or Lead-Generation Programs?
For some people, sales promotion incentive funds, better known as spifs, are the high-tech industry's own example.
Spifs are incentives given directly to sales reps by manufacturers for selling specific products. It's an age-old practice that certainly was not invented in high-tech and that doesn't get used or talked about nearly as much as it did in the early days of the channel. But as this week's cover story explains, the practice of using spifs is alive and well and still being debated.
At the most basic level, spifs prove that channel promotions can help move lots of very specific products quickly.
But there is little doubt that this business is about much more than just selling products. Business technology integrators sell solutions, not products. I've written columns in the past that talked largely about how the solution is the product, as far as the customer is concerned. But for product companies, the business is about moving hardware or software, and as we all know, solution providers have a choice as to which supplier's product is incorporated into a solution.
Let's face it, solutions are made up of a slew of products, and spifs can be effective in getting one product specified into the plan over another. Spifs are also very effective in companies that support significant telemarketing sales activities. CDW, PC Connection and the broadline distributors are a few excellent examples. CDW, by the way, is one of those companies that is against the use of spifs unless approved first by management.
I've been hearing both sides of the argument since the early 1980s. Critics will tell you that the customer's best interests may not be served when there are spifs involved. They also claim that spifs can throw solution provider compensation plans out of whack.
Proponents will tell you that spifs are an effective way to get a leg up on a competitor.
To me, the whole spif debate proves that manufacturers can sell more products by creating programs and incentives that encourage the channel to push their brands.
In the end, the first thing manufacturers want from the channel is product sales. Sure, they also want the channel to help them reduce their cost of providing technical support, training and logistics. But none of that comes into play until a product is sold.
Everyone in this debate needs to accept that spifs are not going away. In fact, depending on competitive situations and other factors, there will be times when spifs are heavily used and times when they will be seen as less effective.
I think the channel ought to encourage their use because it is a great way for sales reps to make additional dollars without directly impacting the solution provider's bottom line.
Let's think about this for a minute. Solution providers often tell manufacturers they want more sales leads, despite the fact that we all know those leads universally stink and result in very little new business.
On the flip side, some solution providers tell manufacturers they do not want spifs, when we know they work very well.
What manufacturers ought to do is stop wasting their money on lead-generation programs that are difficult to measure and funnel that money into channel sales-generation programs like spifs that result in real revenue.
Make something happen. I can be reached at (516) 562-7812 or via e-mail at [email protected].