In a recent survey, it was determined that 59% of customer service centers measure customer satisfaction by first call resolution rates. Surprisingly, just 4% of companies conduct a follow up survey after the initial call to better understand customer satisfaction levels.
If a component of your sales force’s compensation is based on similar measures of customer satisfaction, your plan is flawed.
There is no disputing the importance of happy customers. However, where most companies go wrong is how and what they measure in relation to sales compensation.
Take, for example, a car dealership. From the moment you drive off the lot in your new car, the sales rep is begging you to give him “highly satisfied” marks because it impacts his bonus. The dealerships advertise their “99.5%” customer satisfaction scores as a way to lure more buyers. Is this a true reflection of your satisfaction level? More importantly, does the sales person actually impact your overall level of satisfaction with the car a week, month, year after you’ve gone home with the car?
It isn’t enough to merely ask the customer if they are satisfied and hand out bonuses based on the answer. Relationships are complex and deserve to be treated as such.
Here are three things you can do to properly compensate the sales force using customer satisfaction metrics:
- Controllables – Measuring categories sales people control will result in improved sales. Sales reps work within their comp plans, so giving them control of how they earn is a must. If on time deliveries are part of your satisfaction survey, yet sales has no ability to influence shipment status, the bonus component will not motivate them to improve the metric. Make sure the reward is directly tied to metrics sales can (and will) influence.
- Ask Your Customer – Have you ever asked your customer how they determine the value you provide? For every $1 they spend with you, what do they expect in return? The value you provide determines much of the customer’s satisfaction. If sales is executing by creating value for the customer, everyone deserves to share in the result.
- Ask Your Sales Force – What metrics does the sales team feel are most important? Asking sales to help create satisfaction metrics creates a shared vision. When customer issues arise, they will take corrective measures to improve areas of concern. They own the results and are paid for keeping the customers happy.
A business services client of ours was struggling with customer retention and changed their customer satisfaction metrics in 2010. Not surprisingly, the customer satisfaction index (CSI) declined in year one. This is because they started measuring factors developed from the 3 aforementioned methods, which produced a CSI score based in reality. This allowed them to focus on metrics the customer cared about and the sales force could influence. The result was a 4.2% increase in customer retention rates in year 1. The resulting revenue made it an easy decision for the CSO to pay out the quarterly satisfaction bonuses. He knew his sales team had a direct impact on customer satisfaction and revenue increases.
“Customer satisfaction” is a loosely used term in many companies, creating a flawed compensation model for the sales force. Take the bold step of refining the metrics used to pay your sales reps. The result? The money you pay for high customer satisfaction scores will be worth every penny.