Definition
A SPIFF is a short-term cash bonus or reward paid to salespeople for selling a specific product or hitting a specific goal. In channel programs, vendors often pay SPIFFs to individual partner sales reps. SPIFFs are used to push new products, clear promotions or boost a slow quarter.
SPIFFs get attention quickly, but the effect often fades when the payment ends. They work best for a clear, short goal.
Some partner companies have policies on whether their reps can accept vendor payments directly. Vendors should check those policies and tax rules before launching a SPIFF.
In practice
A vendor offers partner reps a bonus for each new customer they sign on a newly launched product during the last month of the quarter.