To Spiff or Not to SpiffTo Spiff or Not to Spiff

Every supplier that sells through the Channel knows that to be successful, they have to get the attention of the TA community. So we suppliers host happy hours, organize golf outings, teach lunch & learns, and of course, promote lots and lots of spiffs.

Before I go any further, I’m just going to say it: I HATE spiffs.

Don’t get me wrong, when promoted well, spiffs can get a lot of attention. And since attention is what we suppliers want, how could I possibly hate spiffs?

Simple: in almost every case, spiffs consist of an almost unbelievable headline like “10X MRR!” followed by pages of disclaimers, exclusions, and caveats making it almost impossible to actually earn the spiff. In other words, all too often, the spiffing vendor gets the attention they crave without actually paying out on the program.

It sort of feels like cheating to me.

A perfect example happened just this past fall when a very well-known competitor of ours did an amazing job promoting a 10X MRR spiff. It was all over Linkedin and everyone was talking about it.

GREAT JOB on getting attention right?

Unfortunately, the 3 pages of terms & conditions that followed the “10X MRR” headline (and the 5 pages of additional legalese found online) pretty much guaranteed that no one would ever earn the full spiff. The spiff’s rules required the lead be previously unknown to the supplier, the deal must be registered AND CLOSED within a specific 4-month period, the final contract must be a 3-year deal worth at least $X with one year fully pre-paid, and so on.

You get the idea. Impossible. But that’s the norm; come up with a big headline and devise pages of complex rules so it’s impossible to achieve.

Just your average, every day spiff.

While writing this article, I came across an old spiff offered by my own company. And while the disclaimers and exclusions section didn’t take up 8 pages, the caveats took up more room than the program itself. Even though that spiff was offered well before my time, I was retroactively embarrassed.

I’m sure there’s at least one TA reading this right now that makes great money chasing the various spiffs offered by vendors. If that’s you, congratulations! But I’d be surprised if you’re the norm because complex, short-term, and unpredictable incentives are designed for the exclusive benefit of the supplier, while effective partner incentive programs benefit both the TA and the supplier, and are simple, predictable, and long term. 

Early in my sales career, I was evaluating a job offer and reached out to a mentor for his advice. As he read the offer letter, he looked at me and said, “Tom, if it takes more than 5 minutes to fully understand your comp plan, you’re getting screwed.” We discussed the purpose of incentives/commissions and that in order for plans and programs to be truly effective, they must allow for a win-win and benefit all involved - not just the company offering the incentive.

Our discussion - and his sage advice - prompted me to take a closer look at the comp plan I’d been offered and to really do the math. I didn’t take the job.

Since then, whenever given the opportunity, I’ve followed the “5-Minute Rule” in every incentive/commission plan or program I’ve influenced or designed.

In October 2023, I was offered the chance to build Sharpen’s channel program - almost from the ground up. I jumped at the opportunity because I knew we could be different. I knew we could do it right.

In January of 2024, Sharpen launched SharpenUP! where members earn 40% gross commission (before TSD pass-through) for the first year on all deals registered while a member of the program and 25% evergreen commission beginning in year two - including renewals. Members also receive bonuses on closed deals, quarterly consistency bonuses, and have access to MDF for joint marketing activities.

That’s it.

No asterisks, no disclaimers, no legalese. Just a simple, predictable, and ongoing membership program that just happens to pay a higher commission than any other CCaaS supplier in the Channel.

So next time your go-to supplier throws out another spiff, read the fine print, apply the “5-minute rule”, and judge for yourself if they really want to pay that spiff or if you’re just getting screwed.