How does employee compensation affect customer service culture?
When talking about any kind of corporate culture, there’s an important principle that applies. What you reward will become part of the corporate culture, and that which is not rewarded will tend to “go away”. This applies to creating and maintaining a customer service culture. In other words how you pay or compensate your employees will convey to them what the organization values, and does not value.
When companies compensate their employees for the value of new sales (i.e. using a commission structure) what they say to those employees is that what is most important is making the sale. This can have profound effects on other aspects of customer service, since a lot of customer service is oriented towards customer retention, and involves quality interactions outside of the sales arena.
It makes sense. If a sales person on commission has a choice between spending time making a sale to a new customer (for which he is compensated), or spending time with a customer who bought a product last week and is having trouble getting it to work properly (for which he is not compensated), where is he likely to spend his time?)
The employee in this situation may value both sales and support, since most of us understand the value of after-service when we are, ourselves, customers. However, the pay scheme (commission) tells the employee what is important. Make the sale. Prioritize time to make the sale even if it results in a less satisfied customer hoping for after-sale support.
A few other points are important. First, since pay and compensation are one (and only one) component that affects the development of a customer service culture, it is still possible to create that culture under a commission based scheme. It’s just a lot harder. Second, to understand how powerful compensation (and its effect on culture) are, go into several electronics retailers. Some have a commission structure, and some do not (It’s probably not appropriate to name specific companies here). In a very short time, you’ll be able to guess, from your interactions with staff, which company is commission based. You can ask to confirm your guess.
The bottom line here is that customers can tell what companies have a customer service culture and which ones don’t, and that the compensation system has a profound effect.
