For some reason, I’ve been hearing a lot of discussion about linking customer feedback to incentive compensation plans lately.
This edition of Walker Weekly noted including customer feedback in incentive compensation can prompt attention and motivate people to take action on the Voice of Customer (VoC) initiatives.
Another recent issue suggested companies should consider adding customer feedback to compensation plans when they want to:
- Create a culture of customer-focus
- Improve customer relationships
- Gain attention from key stakeholders
Does it work? It sure can! Here are just a few example of how companies have used VoC feedback to motivate their team:
A leading network security company sought to come up with an effective incentive compensation plan for the company’s global service and support organization. The team created visibility so employees would understand why they were changing the way they used customer feedback. Then they rolled out a plan that had a “top two-box” mentality and focused on rewarding people for consistently delivering excellent service. As soon as the program was launched there was an instant payoff. Customer perceptions dramatically improved, ensuring commitment and buy-in to this initiative throughout the company.
Another global organization has leveraged the goal of delighting their customers in an effort to drive improvement in their value chain and increase customer loyalty. Financial incentives helped drive the correct behavior and ensure internal collaboration. The bonuses of all employees were tied to the goal of improving their key customer metric, which is readily available to all employees. This was one of the critical success factors in ensuring alignment across the organization – contributing to improvements in responsiveness, fulfillment, delivery and other aspects of the customer relationship.
Some companies have been successful by linking customer metrics with compensation plans; others choose to motivate for action in other ways. Which approach would work best for your organization?
Vice President, Consulting Services