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Customer Service Speaker Suggests Introducing Merit-Pay To Achieve Customer Satisfaction


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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, President of, is a popular keynote speaker, management consultant, and seminar leader and the best-selling author of 12 books, including Reach Out & Sell Someone and Monitoring, Measuring & Managing Customer Service, and the audio program, “The Law of Large Numbers: How To Make Success Inevitable, " published by Nightingale-Conant. He is a frequent guest on radio and television, worldwide. A Ph. D. from USC's Annenberg School, a Loyola lawyer, and an MBA from the Peter F. Drucker School at Claremont Graduate University, Gary offers programs through UCLA Extension and numerous universities, trade associations, and other organizations from Santa Monica to South Africa. He holds the rank of Shodan, 1st Degree Black Belt in Kenpo Karate. He is headquartered in Glendale, California, and he can be reached at (818) 243-7338 or at: . For information about coaching, consulting, training, books, videos and audios, please go to


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