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Using spiffs to target sales

By Scott Hochmuth

ScottHochmuthBlogSpiffs to make something "spiffy" or more attractive by assigning a premium or bonus to a specific item! Creating spiffs can be a great motivator in directing staff to sell items that most benefit the dealership. Putting a “bounty” on these items will help focus the employee’s attention to higher point margin (i.e., more profitable) items or to outdated stock, and get these items sold. Below are four different scenarios where a spiff program can efficiently promote your business.

First, target spiffed items through an aged inventory report. Monthly aged inventory reports will reflect items that need to go. These items have been tying up inventory dollars too long and need to be moved in order to create a cash flow for newer and more desirable items. That is, instead of deeply discounting a regularly priced item on a price tag hoping to attract the customer’s eye, conservatively mark the item down and put a $10 or $20 spiff on the item. Employees will certainly be more likely to shine the spotlight on spiffed items and get that inventory moved! Try putting discounted items in a designated clearance or sale area and marking the back of the clearance tag with the spiff amount in small numbers where your employees can see it. They can then turn in the tags to be added to their payroll for the week.

Another great way to implement a spiff is to target or jump start a new category or product line. Learning about and becoming comfortable with new accessories like Audio, LED lighting, custom wheels, or apparel require time and effort by employees. Creating a spiff for the first 60-90 days can give employees a more compelling incentive to accelerate the learning curve with new items and get those items moving.

Spiffs can also help guide staff to focus on selling more profitable lines. Offering a 5 percent spiff to sell more of higher margin lines at 40 or 50 points or more will pay off with increased profitability in the department. Of course, recently launched or lesser known brands that offer higher margins may take a bit more effort to sell, and a spiff program could help get employees comfortably focused on more profitable items. Spiff programs can be an introductory strategy to build momentum or an ongoing tactic in incentivizing sales.

Lastly, spiff programs applied to accessory items can help bolster profitability with new unit sales. Why are some employees not incentivized for selling accessories at the time of a new unit sale? At the very least, employees should benefit from the profit obtained through the sale of the accessories that complement the new unit in addition to commission for the new unit sale. Otherwise, employees may fail to take the opportunity to increase profitability at the point of a new unit sale. Perhaps in an effort to make accessory sales easier for sales staff, the sales, parts, and service managers can identify and provide a “top 10” list of accessories for each type of unit and include an attractive spiff amount as an incentive. Remember, the point of sale of new units is the BEST time for optimizing profitability through accessories. Frequently, buyers will finance the new unit, so why not finance the accessories too? Incorporating accessories at the point of a new unit sale may only increase the buyer’s monthly payments an extra $10 or $20 a month, whereas accessories bought afterward required an outlay of hundreds or thousands of dollars at one time. The key point is to focus on more profitable lines and put together packages for apparel, lighting, wheels, audio, security, and other accessories that will enhance your customer’s enjoyment of the new vehicle.

Scott Hochmuth is the owner of Real Performance Marketing, an Atlanta-based company representing ten different Powersports related product lines in the Alabama, Florida, Georgia, and Tennessee areas. He comes face-to-face with over 200 dealers every 8 weeks. He has been in sales since 1982 and started in the powersports industry in 1989 as a sales representative for a helmet manufacturer.

Email: scott@realperformancemarketing.net

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