When Sales Strategy Harms Customer Service

by

Joan M. Ridley, CEPA, CBI, CFP™

I was sitting in a reception area of a lower mid-market business recently. I watched two very experienced and professional receptionists (call them Kathy and Diane) struggle to write company advertising to be placed on Craig's List. Some company sales come from Craig's list so new ownership thought it would be a cost-saver to have Kathy and Diane write the Craig's List ads. Under previous ownership, all advertising had been written by an outside source that specialized in ad writing and placement.

While Kathy and Diane had fantastic people skills, they lacked the natural skills to write ad copy. Writing ad copy was not included in their job description when they were hired several years ago. As they struggled over writing on deadline, a valued customer (call him Tom) of nearly 12 years approached them three times and asked for assistance. But they couldn't take the time to help him because they had ad placement deadlines to meet, and, a under new ownership, a large portion of their compensation now depended on the response to their ads. Kathy and Diane were stressed because they were being asked to do something they were not skilled at while ignoring their primary job where clearly they excelled.

I wish I could say this was an isolated incident. But it isn't. I am in and out of businesses every day. There seems to be a trend where employees are being asked to be salesmen in addition to their regular work. In many cases, they are paid below market fixed compensation for the primary service they deliver, with as much as 75-80% of total compensation coming from sales commissions. Often, reduced customer service is well-documented as the employees focus on sales to new customers rather than servicing existing customers.

What About Ownership Thinking

Developing a workforce of ownership thinkers' is a sound foundation for creating and growing enterprise value. According to Brad Hams, owner of Ownership Thinking and author of the book by the same name, ownership thinking helps employees become active participants in their company's financial success. The key is to establish clear performance goals for every employee where each can see how his efforts contribute to the bottom line, and, more importantly, value enhancement. Further, when they meet those performance goals that are clearly quantified, they are rewarded. The key is for each employee's goal to be consistent with his natural skillset and job description. Compensating every employee when he is responsible for a sale and his role in value enhancement engages the employee and helps to align the entire workforce with ownership's goals of value creation. But expecting every worker to be a salesman could eventually result in loss of enterprise value. Upward trending revenues is an important value driver, but not at the expense of the other 49 value drivers.

A Better Idea

Incentivize every employee when he brings in new business but don't depend on company-wide employee sales to generate revenues. Design all employee compensation to be consistent with his job description. Consider hiring dedicated professional sales people and a sales manager. Maybe you have tried to have a dedicated salesforce but your efforts have not worked out. Try a different approach. Hire a sales consultant, or coach, to help you establish successful hiring practices, compensation, and a sound sales management system. A professional sales management consultant can show you how to quickly assess a candidate for a sales position saving you months, if not years, of keeping the wrong hire on board. He can also help you find the right sales manager to maximize the performance of your salesforce. When working with clients to maximize value, we often bring a sales manager or consultant onto the team. Call us today at 214-692-9192 to learn more about how we can help you increase revenue and profitability.

Copyright 2015 Joan M. Ridley

 

Joan M. Ridley is President of Business Wealth Solutions, a business consultancy that helps business owners maximize enterprise value. She is a Certified Business Intermediary, Certified Business Exit Planner, and a Certified Financial Planner™. In 2013 she received the first Excellence in Exit Planning Award conferred by the Exit Planning Institute for her pioneering contribution to this new discipline. She is the Founder of the North Texas Chapter of The Exit Planning Institute. Call 214-692-9192 and visit www.bwsllc.net.