John DiJulius | Customer Experience Blog

What’s wrong with incentive compensation?
March 7, 2012, 10:41 am
Filed under: Customer Experience, Customer Service Training, John DiJulius

The Danger of Linking Pay to Customer Satisfaction– The major new trend is incentive compensation. When done correctly, it can reinforce the company’s values. However, as Rob Markey, co-author of The Ultimate Question, points out, when it is done poorly, it can be devastating. Here are some examples of what can go wrong: once compensation depends on improving a particular score, people tend to focus on the metric rather than the customers’ needs. Instead, employees focus more time on criticizing the metric itself.

Image by Dominik Gwarek

Gaming– Markey also points out that the creativity that should be

focused on improving the customer experience and wowing the customer is instead channeled at gaming the system. For
instance, front line employee could only encourage customers they know are happy to share feedback and bury the negative responses, as well as pressure customers to give unauthentic feedback. We have all purchaseda new car and have been told point blank by the car salesman that they need “all 5’s” on their customer satisfaction survey. There are also stories of some employees writing down the wrong phone number of unhappy customers so the surveying companies couldn’t reach them.


Get over It!Management’s mentality is sometimes the leading cause of a

company’s inability to deliver superior service. So many people thinktheir situation is unique and use this as the reason they cannot provide better service. Don’t have tunnel vision and think, “some of the examples don’t apply to my business,” or “we are business-to-business,” or “my industry is totally different.” A great example is a great example, whatever your business and whoever your customer. I have found that the exact same principles apply in any industry for providing world-class customer service and creating a world-class culture internally. The application may slightly vary, but the formula is always the same.

I do an exercise that illustrates how similar all business situations are when it comes to dealing with customer service. When people from different businesses/industries share with each other their unique obstacles, it is remarkable how everyone realizes that they all share the exact same barriers. I have yet to come across a company that isn’t trying to do the following:

*Differentiate itself from the competition

*Make price irrelevant

*Find talented, service-minded people in a limited talent pool

*Get their employees to buy in, be enrolled, and do the right thing

*Create consistency in the service delivered by front-line employees

*Have protocols in place to recover when someone drops the ball

*Create anabove-and-beyond culture.

Southwest Airlines & Indianapolis 500 Pit Crews – If you look at some of the best customer service organizations, they went outside their industry to break old paradigms. For example, Southwest Airlines was looking for a way to improve the turnaround time of its aircraft and gate arrival to decrease push back for the next flight. Reducing this time would help the company stay on time and save a great deal of money. Did they study the airline that had the leading turnaround time in their industry? No! They studied Indianapolis 500 pit crews, who complete a similar process in only 15 seconds. As a result of adapting such techniques, Southwest Airlines reduced its turnaround time by 50 percent and became a leader in their industry.


“You have to find something that you love enough to be able to take risks, jump over the hurdles and break through the brick walls that are always going to be placed in front of you. If you don’t have that kind of feeling for what it is you’re doing, you’ll stop at the first giant hurdle.”



~John R. DiJulius III best-selling author, consultant, and keynote speaker, is the President of The DiJulius Group, the leading customer experience consulting firm in the nation. He blogs on customer experience trends and best practices. Learn more about The DiJulius Group or The Secret Service Summit, America’s #1 Customer Service Conference.


1 Comment

No way, this is indeed a great blog.

Comment by microinvest

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