Dead-End Spifs

In the point-product era, spifs were an effective hammer to drive sales. But in a world where solution providers are acting as trusted advisors solving business problems by integrating complex multivendor solutions, they are more often than not nothing but deadweight. To spif or not to spif is the question that this week's cover story places front and center, with partners eagerly weighing in on both sides.

Clearly, there is frustration with vendors that use spifs as a crutch. At the end of the day, however, compensation is the most critical factor in all channel discussions.

So a big question for all solution providers is, what effect is spiffing having on their sales reps?

Tom Foley, CEO of Networked Information Systems, a solution provider in Woburn, Mass., said one surefire way to ruin a sales rep is to let him or her be driven by spifs. Foley said he has no problem with a vendor offering one of his sales reps a golf club or $50 giveaway as a reward, but when spifs balloon into the thousands of dollars they simply lead to "bad behavior." The focus at Networked Information Systems is on delivering complex, multivendor solutions, Foley said. "That is how the company makes its money," he said. "And if you start allowing that behavior to be changed and driven by another agenda, your salespeople are going to go off in all the wrong directions for all the wrong reasons."

For his money, Foley said the most innovative vendor program in the past several years is Cisco Systems' Value Incentive Program (VIP), which provides rebates to partners around IP communications and security sales when they generate specified levels of customer satisfaction. "That program not only drives the behavior of selling something, but it is driving behavior that is bringing customer satisfaction, which means repeat business. So it is good for everybody. It is good for the whole ecosystem."

Interestingly enough, Cisco is also hammering out the details of a Solution Incentive Program (SIP) that rewards partners for building solutions practices that include a full complement of life-cycle services. It is solutions that provide customers with a solid return on investment that are driving business today.

SIP or spif? You choose.

What do you think about spifs? Let me know at (781) 839-1221 or via e-mail at [email protected].