Introducing Merit-Pay Into Customer Service
There have been, perhaps, six critical conversations I’ve had that have shaped my professional consulting career. One of them was with an operations manager at a division of Federal Express.
I had just completed a successful, nationwide training program for the field sales force, so my credibility and confidence were soaring. Then, I heard a simple, but challenging question.
“We know how to measure sales productivity,” he said. “But is there something you can develop that will measure customer service productivity?”
Reflexively, I thought, “Why bother? Even if we can do it, reps will hate it.” But I held my tongue, sensing that this was a rare opportunity to revisit some of my assumptions.
My gut reaction was informed by years of doing seminars across the country in which I brought together sales and service people into the same sessions. Evaluations told me that they felt they were adversaries with mutually exclusive value systems.
Sales types tend to see themselves as swashbucklers, rogues, high-wire types, who crave adventure and embrace risks. They thrive on contingent pay, on the prospect of receiving hefty commissions and bonuses when they make big sales.
Service folks tend to be more risk averse. Often, they have a clerical mentality, which commends accuracy while penalizing mistakes. I sensed, to my core, that if we suggested to them that their pay should be even partly variable, based on achievement, they’d rebel.
This was more than supposition on my part. I had introduced cross-selling programs for years into service departments, experience that informed my best-selling book, Selling Skills For The Non-Salesperson. I found I could design a great sales program for service people, yet many would balk, even after they had achieved success and financial rewards through it.
They explained to me, in a very straightforward way, that they simply didn’t want to be salespeople, and that was that. Noting resistance from the rank and file, senior management, in those days, refused to push for implementation, despite the fact that big profits were being left on the table.
What, if anything, has changed since I was asked this question?
Four crucial things:
(1) We know much more about measuring customer service achievement.
(2) Job enlargement, downsizing, CRM, and the rise of professionalism in companies have all contributed to an expectation of broadened CSR responsibilities and heightened performance.
(3) Global competition, especially from knowledge workers in countries such as India, China, and elsewhere, is beginning to exert pressure on domestic workers to find ways to increase their contributions, if only to keep jobs onshore.
(4) Management is more cost and profit conscious than ever before.
Customer Service Achievement
If there have been three unwritten commandments in the past for being a capable CSR they have boiled down to: (1) Sound nice; (2) Defuse angry customers; and (3) Don’t make mistakes entering or retrieving data or reciting company policies.
Now, associates are being discouraged from focusing primarily on themselves, on customer service, or the motions they go through as they work. They’re being required to focus on outcomes: on customer satisfaction and on customer loyalty.
They’re being shown, through new training and unobtrusive, real-time performance measures, how to evaluate the impacts they’re having on transactional satisfaction and a customer’s decision to buy again from their organizations.
To borrow a phrase from Peter F. Drucker, suddenly the customer handling process is being managed for results.
If we can objectively monitor, measure, manage, and systematically replicate customer results, there’s no reason to deny better pay to the people that can produce them.
Future articles will explore some of the other crucial changes that have occurred, as well as discuss the pragmatics of introducing a pay-for-performance plan into the customer service context.
Dr. Gary S. Goodman, Copyright 2005
President, Customersatisfaction.com
Dr. Gary S. Goodman is a popular keynote speaker, management consultant, and seminar leader and the best-selling author of 12 books, including Monitoring, Measuring & Managing Customer Service. Gary’s programs are offered by UCLA Extension and by numerous universities, trade associations, and other organizations in the United States and abroad. When he isn’t consulting, Gary can usually be found in Glendale, California, where he makes his home. He can be reached by calling (818) 243-7338 or at gary@customersatisfaction.com.
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