• October 1, 2014
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

Should CSRs Be Paid for Performance?

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TV, phone, and Internet service provider Comcast made national news in mid-July when an eight-minute audio clip of a pushy customer service representative (CSR) trying to convince a customer not to disconnect his service went viral. In the audio, the agent is heard badgering the caller, pressing repeatedly for an answer: "Help me understand why you wouldn't want the number-one service!" The agent carried on as if his salary depended on keeping the customer from churning. As it turns out, it did. Agents in Comcast's retention department were being paid based on the number of customer accounts they saved. According to one account, Comcast can withhold agents' bonuses if they fail to retain as many as 75 percent of cancellation requests.

Comcast issued a formal apology to the caller, tech editor Ryan Block. "The way in which our representative communicated with him is unacceptable and not consistent with how we train our customer service representatives," Tom Karinshak, senior vice president of customer experience at Comcast, said in a statement.

Comcast also placed the agent on leave, even though Block requested that he not lose his job over the incident.

"While the overwhelming majority of our employees work very hard to do the right thing every day, we are using this very unfortunate experience to reinforce how important it is to always treat our customers with the utmost respect," Karinshak added in the statement.

When a customer service debacle turns into a public relations nightmare, it puts a lot of pressure on an organization to find the cause of the problem immediately. The simple, and often public, response is to blame the agent. But is the agent solely at fault for his behavior, or is there a larger, more systemic, problem at hand? Contact center experts suggest it could be the latter, pointing to agent compensation as one of the biggest customer service snags.

Compensating CSRs

Base pay for contact center employees has always been low. The average annual starting salary for contact center agents is $27,542, while more experienced agents earn $34,777 on average. Team leaders/supervisors earn $43,977 per year on average, and pay for managers averages $67,580 per year, according to research firm ContactBabel's 2014 study "U.S. Contact Center HR and Operations Benchmarking Report."

The low salary for CSRs is one of the reasons that their turnover rate is so high, according to ContactBabel, which puts the mean attrition rate at 27 percent. It states that contact centers that offer a higher base salary see far lower attrition rates, averaging more than 10 percentage points below industry norms.

To compensate, many contact centers supplement low wages with performance-based bonuses, incentives, or rewards programs that can bolster salaries by several hundred to several thousand dollars, depending on the type of work the agent performs.

Agents who make outbound calls, for example, tend to receive lower base pay than those who handle inbound calls, but they typically get higher bonuses and commissions, according to ContactBabel's report. Sales and collections agents also tend to get rewarded more often than customer service agents, the firm found.

The ContactBabel report notes that 86 percent of contact center operators offer bonuses to sales agents, typically in the form of commissions that average about 18 percent of their sales totals. In collections, agents also receive a percentage of the money they bring in.

"In the customer service arena, there are far fewer rewards for doing your job," laments Donna Fluss, founder and president of DMG Consulting. "It's not fair. Sales gets all the attention and the rewards."

But some industry professionals question whether performance-based incentives belong in the contact center. "I am not a fan of these programs," Kathleen Peterson, founder and chief vision officer at contact center advisory firm Powerhouse Consulting, states emphatically. Peterson says it would be far better for contact centers "to pay people what they deserve up front," rather than having them compete with or outperform their peers to get extra pay.

Current research supports part of this claim. "One would think that higher pay should produce better results, but scientific evidence indicates that the link between compensation, motivation, and performance is much more complex," researchers concluded in a study 

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