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Design an Effective Inside Sales Commission Plan

When designing a commission plan for your inside sales team it’s important to focus on two main questions.

1. Will the plan help the organization achieve its sales/growth goals?

2. Will the plan engage the team to exceed performance expectations?

 

Your plan must align with the goals of the organization.  In many cases that revolves around sales conversion rates, but could also include total revenue, revenue per customer, or units sold.  An effective commission plan will drive both revenue and customer acquisition (units).  As we all know, acquiring a customer is never cheap.  That said, a conversion rate element in the commission structure will drive agent behavior to make the most of each call/lead.  The revenue side of the equation will allow the organization to determine a fair compensation rate for each unit sold.  The goal is to make the plan self funding by reducing customer acquisition cost and/or increasing revenue.  Effective plans that I’ve used in the past use conversion rate as the metric for determining the amount paid out on each unit sold.  If driving revenue is more important you could use conversion rate to determine the share of total revenue generated to payout to the agent.  As an example, 10% conversion rate would equal a 1% share of the revenue the agent generated.

Some organizations decide on more of a bonus structure vs. commission plan.  Bonus structures allocate a certain dollar bonus based on the level of achievement in regards to the driving metric.  Commission plans are usually not capped and payout on each unit sold.  For that reason I find commission plans more effective in engaging agents and driving performance.  Structured properly an inside sales commission plan should be engaging to agents, drive performance, be self-funding to the organization, and reduce agent turnover.

 

Planning for 2013

As we close out 2012 and prepare to move into 2013, you are probably thinking about your goals for your contact center.  Each year brings a new opportunity to analyze what is working and what needs improvement.  When thinking about your main objectives for 2013 you may want to break it down into the three main areas of focus.  People, Processes and Technology.  If your organization’s goal is to improve your NPS score or increase sales revenue, then chances are you’ll need to focus on each of these areas. Below are some key questions you’ll want to ask when reviewing each of the three areas.

People:

1. Recruiting – Do you have the staff need to achieve your service level objective?

2. Recognition – What are you doing to keep your staff engaged & motivated?

3. Training – What training should take place across the center (agents, supervisors, managers, etc.) to ensure everyone has the tools to achieve your objectives?

Processes:

1. Skill routing – Are the right agents handling the right calls?

2. Are there any redundant or dated processes that can be eliminated?

3. Do you have an effective knowledge tool available for agents and customers?

Technology:

1. Do you  have dated systems effecting customer experience?

2. Do you have adequate self-service options available to reduce call volume?

3. Have you implemented an effective social media strategy?

We should focus throughout the year on these areas, but the beginning of a new year offers an opportunity to set aside time for continuous improvement.

A Contact Center Leader’s Number One Job

The most important job of a leader is to clearly articulate the vision of the organization.  Every leader must be able to clearly answer the question of why the organization exists.  Once that vision is in place then it must be communicated throughout the organization.  Simply posting a sign with the vision written on it or verbally communicating the vision during your annual kick off meeting is not enough, although those things should be done as well.  Communication of vision is an ongoing process and is the number one job of the leader.

In order to get your employees to rally around the vision you must clearly link the vision to their specific role.  In other words, let everyone know they matter.  If your vision involves providing a superior customer experience then obviously the front line agents will impact the results based on how they handle customer interactions.  Just the same, those in workforce management impact as well by reducing hold times and abandonment rate.  The quality team helps to refine the customer experience by improving each agent and customer interaction.  Human Resources can make a difference by hiring the right people and providing benefits that improves employee satisfaction, when employees feel good they make customers feel good.  As well, the building’s janitorial staff provides a clean working environment that makes employees feel good and proud about their company.  Everyone is involved in bringing the vision to life, every day.

As a leader take every opportunity to tell ALL your people how they matter.  Let every new hire know how their job makes a difference.  Make sure everyone shares in the results and gets to celebrate the successes.

Are you focusing on the right metrics?

What are the most important metrics in your contact center?  Which ones should you focus one to make the largest impact toward performance?

These are two questions that every contact center leader deals with.  While we would all like a standard answer listing the four or five metrics every contact center should focus on, the real answer is it depends.

The metrics you choose to focus on should first and foremost align with the organization’s highest priorities.  If the priority is customer experience then you’ll need to focus on an entirely different set of metrics than if the number one goal is to increase revenue.  It’s also important that you measure leading indicators vs. lagging indicators.  Take the goal of increasing revenue as an example.  By simply looking at the sales volume you’re focusing on lagging indicators, instead focus on the daily activities that drive sales volume.  The areas your agents should be accountable to are metrics like calls per hour, quality sales presentations, lead management, time signed on the phone.  If all those areas are inline then sales volume will take care of itself.  The same holds true if improving customer experience is your focus.  Measure areas like FCR, service level, and quality to improve customer experience.  Then check your results against C-SAT scores, again if the metrics are at goal then C-SAT score will improve.

Finally, be sure to control the amount of metrics you choose to focus on.  Just because it can be measured doesn’t mean it has to be communicated as a performance standard to your agents.  Your agents should be accountable to 3-5 metrics that will make the biggest impact, anymore than that and they’ll likely lose focus on the main objective.  It’s ok for management to monitor other areas to ensure that they maintain focus on the entire business, but the message to the front line is keep it simple.

It’s the goal of every leader and every organization to continually improve.  Key performance indicators will give you some insight into your progress.  Just be sure you’re looking ahead in your focus and not in the past.

Blending Sales and Service – Part 4

Today we’ll discuss the final two benefits of blending sales and service in your contact center.

Improved understanding of the customer

By having the same group handle both new business and customer service you’ll gain a better understanding of your customer’s needs.  Your front line agents as well as the data you gather from your CRM will reveal problems with products and services, what customers are asking for that you currently don’t offer, customer expectations regarding your offerings, as well as problem offerings that receive multiple complaint contacts from customers.  This data combined with your regular sales data like, who your best customers are and which offerings are most profitable can provide great insight into your business.  Now sure we can get all that information without blending the groups, but the data can become foggy with different groups sharing their findings as well as the potential for conflicts of interest based on departmental objectives.  In a blended sales and service environment the voice of the customer becomes the focus of the organization.  This leads right into the last benefit better organizational communication.

Along with a better understanding of your customer through reporting data and front line feedback, you’ll be able to quickly communicate information across the organization.  In order to develop true voice of the customer focus an organization must be able to quickly exchange ideas and feedback with various stakeholders; such as marketing, R&D, training, and senior leadership.

Blending the functions of sales and service is a key strategy in driving organizational results while remaining customer focused.  Below is a recap of the 6 benefits we’ve discussed during this 4 part series.

1. Improved Customer Experience

2. Increased Customer Loyalty

3. Increased Revenue

4. Reduced Cost

5. Improved Understanding of the Customer

6. Better Organizational Communication

 

Blending Sales & Service – Part 3

When deciding if its best to combine your sales and service functions you must weigh out the pros and cons.  Today we’ll discuss two more benefits gained from combining these functions, reduced cost and increased revenueCost reduction is gained in two ways, reduced handle time and reduction in staffing requirements.  Having one group handle both functions will eliminate the need to transfer customer interactions to another group, reducing the handle time of the interaction.  Also only need to plan staff coverage for one group will reduce staffing needs.  While total contacts handled will increase for the group with both sales and service interactions, you’re only required to plan staff based on one group’s coverage hours vs. two separate groups.  This blended environment can usually reduce total center staffing requirements as much as 20%.  In addition, first contact resolution will also improve with cross trained agents, reducing the total volume of contacts within the center.

In many of the silo style organization the function of the customer service team is simply to resolve problems.  Until recently most contact center leaders didn’t feel driving revenue was part of the customer service mission.  By combining the groups, it has become clear that revenue opportunities exist in service.  Service agents trained to cross sell, up sell, and mention add-on/complementary products and services are becoming key revenue drivers for their companies.

As your organization benefits from cost reduction and increased revenue, your customers will receive a better customer experience.  Customers today look at transaction time, first contact resolution, multiple channel access, and multiple product/service options to define their experience.  The blend of sales and service can provide the experience your customers are looking for.

Blending Sales and Service – Part 2

In building off my previous post of the first benefit in combining your sales and service teams, today’s benefit we’ll discuss is increased customer loyalty.  When we think about customer loyalty its more than just having repeat customers, it’s about customers choosing your business versus other options without considering cost or convenience.  They simply believe that doing business with your company adds so much value to their life that they are not concerned with other options.  Think about how Apple has done this.  Recently with the launch of the iPhone5 I passed the Apple store at the mall and noticed about 50 people waiting the turn to purchase the new phone.  obviously, this was not the most convenient option and most likely not the least expensive.

So how does Apple do it?  They allow their sales representatives to provide solutions to their customers without constant sales pressure.  When you cross train your sales and service functions you empower your people to become fully engaged with the customer, not focusing on meeting quota or putting out the next customer service fire.  Your employees will all have the same goal in mind; provide a solution to each customer interaction that increase customer satisfaction.  Your customers will benefit by knowing that any employee can handle their unique situation, regardless if its to purchase a new product or resolve a billing problem.  The customer will also feel that each solution you provide will be to their benefit and not only the benefit of the bottom line.

When a customer feels you have their best interest in mind, then they begin to trust you.  Developing trust in your company is the first step in becoming loyal to your company.  Combining your sales and service teams will create a culture of customer satisfaction and satisfied customers are more likely to become loyal customers.

To recap, below are the two benefits we’ve discussed so far.

Six benefits of combining sales and service:

1. Improved Customer Experience

2. Increase Customer Loyalty

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