Customer Loyalty and Compensation
"Does it make sense for sales account managers to be compensated on Net Promoter Scores for their accounts?"
A member of our audience asked this question during a recent Satmetrix event. In probing, the question was really about how to drive adoption of the Customer Loyalty program already in place: is it appropriate to tie compensation to customer-loyalty scores?
We’ve all heard how many of us are “coin operated” and that providing incentives around Key Performance Indicators influences those metrics. But before we all go and provide bonus compensation based purely on a Net Promoter Score (NPS), you might ask yourself the following questions:
Do you have adequate response rates to know that the NPS is “accurate” for the account? Lack of participation in the program is often an indicator itself of the strength of the relationship. Generally speaking, more feedback is better – especially from all the decision makers and influencers in the account – so that problems can be identified and solved. Make sure you have solid metrics and methodology in place in this area.
Is the program “for the field”? Sales people are generally already paid to drive sales. A good Customer Loyalty program optimizes longer-term “structural” feedback needs – such as input to improve products – with operational feedback that will engage sales people, such as identifying solution gaps that provide real up-sell and cross-sell opportunities. Where sales people see real leads that can drive their existing metrics there may be no need to make compensation more complex.
Does your program have all the necessary elements to enable front-line employees to improve the NPS for the account? In other words, if you’re holding front-line employees accountable for the score, make sure they have enough expertise, influence, participation, and authority to be able to improve the score. And make sure the right oversight is in place to prevent common gaming techniques, such as only inviting “friends” to participate in the survey.
For most companies, compensating individual employees based on individual Net Promoter Scores could drive undesired behaviors. But balance that fact with the need to drive customer-centricty throughout the company.
Let’s discuss. The question is complex, and a generalized response isn’t going to nail it. I invite you to comment using the links below.
