From meeting sales quotas to achieving high levels of customer satisfaction, incentivising employees is commonplace for businesses aiming to increase performance within their workforce.
However, incentives have a direct impact upon shaping cultures, customers, employees, and the business as a whole. More often than not, they produce both bad behaviors and bad experiences that damage relationships—and limit the business impact of customer experience (CX) investments.
Tying compensation and incentives to customer experience might provide a short-term bump in employee performance, but it may do more harm than good in the long run to the experience of the customer.
Most companies that offer incentives use a pay-for-performance or “variable” pay structure, directly tying incentives to individual employee performance. But this model encourages negative employee behaviors. Time and energy shifts from the big picture customer focus to how best to tick the performance boxes or the process behind the numbers. Incentives also run the risk of cheapening employee achievements and becoming a source of demotivation if not managed consistently.
Ultimately, when employees feel the weight of incentives – especially relating to pay – the risk becomes an unhealthy focus on achieving rewards. As a result, interactions between employees and customers can become insincere or self-serving, leaving customers feeling uncomfortable.
Delivering exceptional customer experiences shouldn’t be contingent on whether there are incentives on the table. CX leaders should regularly encourage employees to deliver their best work, without solely offering rewards.
The first essential step is to share positive customer feedback with employees. Socialising voice of the customer resonates faster than any other methodology. Customer feedback typically circulates at a high level, with most employees completely unaware of how customers rate their experiences. Highlighting great feedback helps to keep employees motivated and excited about their work.
The importance of investing in more opportunities to coach employees shouldn’t be underestimated. Customer feedback presents an excellent opportunity to improve employee performance. Instead of reprimanding employees if they receive less-than-favorable feedback, the comments should be positioned as a development opportunity to coach future performance. This turns an initially negative scenario into a positive career-growth moment.
Tracking metrics is the cornerstone of successful customer experience programs, so it’s essential to focus on impactful metrics employees understand. In this sense, set smart objectives that use data and information that’s meaningful to employees, and that they can directly impact. Make the big picture of the business obvious, so employees know exactly how performance links to overall business success.
Companies that have attained high levels of maturity and customer-centricity can see positive outcomes by applying financial incentives to actions taken based on customer feedback. This subtle shift rewards doing the right thing instead of chasing a number—a fundamentally different proposition.
The bottom line
Incentives for CX don’t work – at best they give a company a short-term bump, but mostly lead to longer-term losses. They can encourage bad behaviors and competitiveness in organisations, which may negatively impact your business. Instead of using monetary rewards, CX leaders should support employees through coaching, metric sharing and a customer-centric focus – so they can continually provide top-tier customer experiences.
Incentives that are used to prove a company’s commitment to customers are actually sad and faulty substitutions for doing the real, albeit harder work, of consistently making decisions that demonstrate a genuine customer focus.