Do Spiffs REALLY Work in the Tire Industry?

Do Spiffs REALLY Work in the Tire Industry?

The majority of you said at least half of customers will switch brands based on your recommendations, but is that rec based on a spiff?

Spiffs aren’t just one of the sounds you make in a proper beatbox battle – they have a lot to do with your sales too. Let’s look at how much weight you give spiffs in the tire industry and how much they influence the products you recommend and sell.

For the uninitiated, the word “Spiff” is short for “Sales Program Incentive Funds.” Spiffs are a way of marketing or promoting a particular product – think special pricing, trips, experiences, bonuses, things like that – except a spiff isn’t directly advertised to the consumer. Instead, these benefits go to the seller. It’s essentially an opportunity for the manufacturer to entice dealers to recommend their brand to the dealer’s customers for the duration of the spiff. The dealer gets a sweet incentive, and as an added bonus, it gives those dealers another excuse to flaunt their tire expertise to customers face to face.

Spiffs work better in some industries than others. Spiffs happen to work very well in the tire industry because many drivers critically depend on their friendly neighborhood tire dealer to inform them of the best tire for them.

WATCH: Tire Review’s David Sickels Breaks Down Spiff Data

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In fact, in a recent survey distributed to our independent tire dealer audience, 68% of you said at least half of your customers will switch brands based on salesperson recommendations. And 6% of you said you can get a customer to switch brands over 90% of the time.

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But is this recommendation based upon a spiff? Seventeen percent of you say you never let a spiff influence the products you recommend, and 25% say you rarely do. Fifty-nine percent say that, at least sometimes, a spiff helps determine the recommendation, with 11% saying they almost exclusively rely on spiffs to know what to sell. So, there’s no doubt: Spiffs work.

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We also asked you what percentage of your customers buy tires exclusively on price, and the data was all over the board. Price matters, but it doesn’t matter as much as your recommendation for many drivers.

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So, what contributes to a good spiff? Sixty-one percent of you say it’s got to have a financial incentive. Also, 54% of you need it to be easy. The program needs to be hands-off, easy to understand and perhaps even automated. Customers are more likely to buy brands they recognize, so 38% of you say it helps when the spiff is already coming from a manufacturer they know.

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We see this data backed up in our survey results. Sixty-five percent of you say that you have received a monetary award via a spiff, while slightly less of you, at 56%, say you have received a non-monetary award via a spiff.

Not to be overlooked, though, many of you told us that regardless of spiff potential, it’s got to be a quality product or you won’t sell it. That’s the bottom line. You may respect two products equally but recommend one over the other because of a particularly tempting spiff. That’s what they’re there for. Don’t feel bad about being charmed by the incentives of a spiff, just don’t let your spiff be your guide above all else. Instead, use it to your advantage, and as a great excuse to engage your customer with your personal recommendation.

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