Commission-Based Sales and Customer Service: Getting the Right Balance.

Commission-Based Sales and Customer Service: Getting the Right Balance. Parallax Image

Most sales jobs have an element of commission-based pay to incentivise sales, but there’s a danger that salespeople focus more on closing as many deals as possible to secure the highest possible commission, rather than ensuring that customers get the best possible service. It’s an issue companies need to look at in order to get the right balance between winning new business and delivering quality customer service. After all, securing a single sale is no guarantee of future business. That all depends on delivering great customer service.

Commission can mean commiseration for customers

The problem with performance-based remuneration packages for sales personnel is that they aren’t always ideally designed for the role, or for the company’s business model. One way of getting round this is to ensure that there is some element of commission based on quality of customer service delivered by the sales person. However, this can be difficult to measure and integrate into performance based sales structures.

Of course, every business want to maximise sales, but how customers are treated has a big impact on whether or not that customer comes back to buy from the business again. When you consider that selling to new customers is more expensive that selling to existing customers, it can be detrimental to future business if the commission based sales programmes means that the salesperson is more focussed on the initial sale, rather than any follow-up business.

But, the question is, just how do you get the balance right?

Sales vs customer service

Clearly, when it comes to sales, you can quantify performance based on number of sales, volume and profit margin. But, short of aftersales customer surveys, it’s much more difficult to gauge customer service performance. Furthermore, there’s also the risk that the salesperson encourages the customer to give five star ratings when it comes to any aftersales feedback mechanisms.

In the end, it comes down to how you formulate performance-based pay depending on the specifics of the role. For instance, for a sales professional working in business development, typically, there will be a bias towards commission-based pay as the goal is to secure new sales. On the other hand, it’s much preferable to use a bonus-based package for someone in an account management role, who is looking after and developing clients already secured by the business development team.

Certainly, in many industries, that is already the case, but this can still bias a focus towards maximising commission at the expense of customer service. Businesses need to take this on board when creating remuneration packages based on performance, but there are other ways in which customer service can be promoted by customer facing staff on the frontline.

Driving excellent customer service from the front

New technology means there are more tools than ever used to deliver and report on customer service. Getting business development personnel to report back on their own efforts to improve customer service can be helpful too. It’s all about identifying the right tools for your business and the staff using them.

Start by making clear organisational expectations for each type of sales person for customer care and service. Clear and realistic objectives need to be agreed on, as well as ways to measure how those goals are met.

Another area often neglected is training. By identifying where gaps in customer service are occurring, companies can look at providing training and coaching to help sales personnel in those roles to deliver better customer care.

Make sure you capture all customer feedback channels for assessment and consider incentives other than monetary rewards. One idea might be to focus on work/life based benefit, such as days off or working from home in return for demonstrable success in delivering better customer service.

Bear in mind, however, that it’s important to treat all your frontline reps with respect when delivering these changes in order to get as much buy-in from staff as possible.

Deliver exceptional customer care to keep the customer there

What is abundantly clear is that it’s vitally important to make sure that some element of commission-based pay is geared towards rewarding excellence in customer service provision. Compensation plans need to be shaped to focus on company goals and, in this day and age, exceptional customer service has to be one of any organisation’s primary objectives.

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