Although Salesforce has been on an M&A (mergers and acquisitions) hiatus over the past year, it didn’t stop them from acquiring Spiff towards the end of 2023. Before being acquired, Spiff was an AppExchange partner that provided incentive compensation management functionality, which in simpler terms, means calculating commission/compensation for sales based on closed-won deals.
Last week, Salesforce announced that “Salesforce Spiff”, as it has been renamed, is now available as part of Sales Cloud. The world of ICM (Incentive Compensation Management) is big business. In their announcement post, Salesforce stated that 90% of top-performing companies use incentive programs to reward their sales teams.
From this perspective, the Spiff acquisition seems like a no-brainer. Spiff had 1,000 customers and was growing at 100% YoY mid-way through last year (before the acquisition). Seeing as Salesforce owns around 23% of the Sales CRM market, most of which needs some form of ICM, there is plenty of room for growth.
Xactly has been one of the leaders in the cloud space and has had a strong partnership with Salesforce for almost two decades, having launched on the AppExchange back in 2006. But, unfortunately for them, Salesforce is now their competitor.
What’s the Big Deal With ICM?
Unless you’ve worked at a big corporation before, you may wonder what the fuss is around with ICM Software. After all, commission is just a percentage calculation of a sale, right? Well, yes and no…
Enterprises like Salesforce will often have extremely complex commission incentive plans. You might get paid a certain percentage on new products being sold and a different amount on a renewal. You may also get given a bonus for signing a completely new customer. What if you exceed your target? Well, then accelerators might kick in, where you get a few extra percentage points. There may also be special one-off incentives for selling a certain product, or even team bonuses.
Overall, calculating these numbers across hundreds or thousands of sales users can become a laborious task. It is also a function that requires 100% accuracy (or you may see the full wrath of your sales team!).
Excel spreadsheets have been a previous solution to ICM, but Spiff provides robust cloud technology, which in turn provides extra functionality to users.
How Does Spiff Work?
Salesforce Spiff is available as an add-on for Sales Cloud customers from May 2024, and it provides two main aspects of functionality:
- Firstly, using a low-code commission builder, you can design incentive plans that will ultimately pay out and reward the sales teams. Salesforce states that you can also “visualize the potential impact of various plan amendments”.
- Secondly, sales users can see their estimated commissions in real time. This allows users to build out different quotes and see the impact on their targets and incentives. Spiff also has built-in dashboards and a mobile app.
The ability to create commission plans using a low-code builder makes these plans a lot more scalable and saves time messing around in Excel spreadsheets.
However, I feel the real value is in the user front end of Spiff, and being able to show in real time how much potential commission can be earned from a certain selection of products on an Opportunity.
As you can see from the screenshot below, which was taken from this demo of Spiff last year, the “Commission breakdown” component on the left-hand side of the Opportunity shows exactly how much commission will be earned.
This not only shows the amount of commission earned, but also where it is being driven from. This gives sales users the ability to see if they can potentially earn more by selling a multiple-year deal or trying to push a new product that might have a further incentive.
It also shows overall quote attainment, which may affect incentives such as accelerators.
Final Thoughts
I’ve had some awkward conversations in the past with non-sales colleagues who don’t always understand why sales users deserve commission and others don’t. But there is no getting around the fact that working in sales is hard. And, ultimately, sales reps are the ones who ‘bring home the bacon’ for the rest of the business.
If tools like Spiff can provide direct insight into the cold hard cash that sales users could be taking home, it has the potential to have a huge impact for businesses using Sales Cloud.
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