Achieving Excellence through Customer Service by John Tschohl

Author:John Tschohl
Language: eng
Format: epub
Publisher: AudioInk Publishing
Published: 0101-01-01T00:00:00+00:00

DOES MONEY ALSO MOTIVATE?

“Many service companies haven’t realized that the person who delivers the service is the most important [in the company],” says Alden Clayton, head of the Marketing Science Institute of Cambridge, Massachusetts, a nonprofit business think tank.

Apparent ly certain that money is at least somewhat motivational, she suggests that people who deliver service should be paid very well instead of being pegged at the lowest position on the wage scale, a common practice.

Retailing companies using commission-based compensation systems are finding that the increased compensation that such systems pay is, indeed, motivational. The usual result of commission-based systems is better customer service.

Commissions

More and more often today the best customer service is found at companies where employees are on some kind of commission system whether you are buying a car or real estate, men’s suits, or expensive women’s clothing. Commission jobs pay more so they usually attract more capable people.

One specialty retailer, Bergdorf Goodman, has good results with an all-commission sales force. The high-fashion Manhattan unit of Carter Hawley Hale of Los Angeles also put all its sales associates on commission. Said Marita O’Dea, when she was vice president and director of personnel: “We get people who are highly motivated, like to sell, and want to stay.” But these people also must possess “the basics of good selling skills and knowledge of high fashion and high-priced merchandise,” she adds.

Most employees of Nordstrom Department Stores work full time, unlike employees at most other department stores, and they all work on commission. They’re encouraged to build long- term relationships with customers. They keep a “client book” on what each customer likes and doesn’t like. Customers are then called when items that might interest them arrive or when preferred items are on sale. Competitors who have tried to imitate Nordstrom by putting more salespeople on commission — without building up the concept of long-term relationships and without using full-timers — have failed by driving away customers because the salespeople push too hard for a single sale. Bloomingdale’s, the department store chain, put all 1,500 sales personnel at its flagship store in Manhattan on commission

instead of hourly wage.. The commission setup at Bloomingdale’s is part of a plan

to improve customer service by giving sales staff greater incentive to satisfy customers so they will buy more and return to buy again. When commission selling was established in the men’s accessory department, sales rose 22 percent as employee take-home pay grew.

A commission-based sales compensation system also has been successfully adopted by Stanley Korshak, the Dallas-based high-fashion retailer.

But commissions are not incentives for everybody.

Profit Sharing

Besides commissions, Maurice Maio, when he was president of Maio plumbing, the leading plumbing repair service in the San Diego area, offered money in the form of profit sharing and a 401-K retirement plan. He also had a very liberal vacation pay benefit program based on a year’s total average earnings and several other attractive motivational perks.

Money may be motivational when it is a reward strictly for customer satisfaction. At Renex Corp., a

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