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Compensation Beyond the Contact Center
One study finds many technology companies link employees' salaries with customer satisfaction.
Posted Jan 28, 2008
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Competitive technology vendors already know they need to attract and retain customers. Courting the customer, however, was traditionally seen strictly as the purview of those in the contact center and the sales department. But a new Gantry Group study finds vendors now realize nearly all employees have some role in keeping the customer satisfied. And they plan to pay them accordingly. In fact, 92 percent of the 215 technology solutions providers surveyed by Gantry Group are implementing, planning or interested in exploring the notion of linking compensation with customer satisfaction, says Dawna Paton, a managing partner at the Concord, Mass.-based management consulting firm. In fact, half of the responding companies have their initiatives already up and running. Gantry surveyed the technology vendors, all headquartered in North America, late last year on their customer satisfaction policies. The results clearly showed a trend toward getting all employees on board when it comes to customer interaction, Paton says. "Vendors are realizing that to compete they have to become customer-centric and that means moving beyond their call center," she says. "They need every discipline in the company tied in with what will make customer happy. That's where all the company's revenues come from: the customer." Linking pay with customer results in this way, respondents say, can get employees thinking about how they best communicate with customers. "At the end of the day people see how their behavior affects the customer," Paton says. "Whereas before, most of them felt they functioned in isolation from the customer -- they really never thought about it." Gantry found that 58 percent of those surveyed felt linking compensation to customer satisfaction would align employee behavior with company objectives. Furthermore, 50 percent said it would strengthen customer loyalty, and 48 percent said it could increase financial performance. But how much of the employee paycheck should be tied to performance?
More than half of all respondents (55 percent) said they would link between 10 percent and 24 percent of employee pay to customer satisfaction, according to Paton; nearly a third said they'd link less than 10 percent of pay. "Those are reasonable amounts," Paton says. "Clearly there's real drive to do this." Respondents also reported following a similar method when it comes to implementing a salary-based-on-results policy. Often a team made up of top players -- executive or president, chief operating officer, human resources head -- meet to assess the appropriate level of customer interaction for each department or group. "For instance, folks in accounting or billing will be involved with customers calling about questions on a bill," Paton says. "The development department would be involved in customers using the solution. Does it have bugs or not? That's their responsibility." Based on the level of interaction, the executive group then sets a specific percentage of compensation in line with customer satisfaction results, the survey found.

Related articles: Feature: Turning Lemons to Lemonade Tie compensation to customer satisfaction. The Quest for Customer Centricity Companies often tie satisfaction levels to internal compensation models. Feature: Happy Employees Equal Happy Customers Employees should be paid back for meeting and exceeding targets, which can key off of timing, profitability, satisfaction, and a number of other metrics. Is Your Compensation Plan Undermining Your CRM Initiative? How to create incentive plans that are in line with your corporate strategy. Viewpoint: 5 Secrets To Customer Nirvana Adjust compensation plans to remind everyone what's at stake. Size Doesn't Matter Companies should create a compensation plan that awards all employees for improved customer satisfaction.
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