Regardless of industry, most companies aim to increase sales, build customer loyalty, improve operations, and reduce costs. To achieve those goals, companies need to gain a better understanding of what sales and service process changes will have the most impact on performance and then share that insight throughout the entire company.

For instance, is it more important for a sales representative to make the sale and thereby meet her quota, or is the priority making the sale while properly setting customer expectations, thereby lowering support cost and lining up the next two sales opportunities? Aspects such as customer experience and profitability should be considered more important than simply hitting a sales number or call handling quota.

Changing long-standing approaches, however, requires operational reassessment, focused execution, and reinforcement at every level of the organization. With the massive rise in enterprise data, sales performance management and service performance management are two technologies that can help companies reach their customer facing goals.

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Integrated performance data is key

In successful companies, sales and service departments typically share a common strategy for customer lifecycle management, which translates into an approach for maximizing customer value and profitability. In the past these departments were usually managed and graded on such tactical aspects as average handle time (for service agents) and number of customer activities (for sales reps), plus retention and sales targets hit. They now need to work together and learn from each other to enable a winning model.

What can sales learn from service? Generally, a central process in the sales function is commissioning because variable pay motivates sales behavior in a way that aligns best with overall company goals. Therefore, the most important metric that is derived from performance data is variable pay. Common metrics, such as quotas and territory assignments, all factor in the commission engine calculations. But there are other metrics that successful companies examine, including customer value, profitability, customer-associated service cost, Net Promoter, and retention that cross the line into service and have a significant impact on future sales. While the commission engine has been the historical driver of incentive compensation activity, it's important for companies to apply best practices from the service department to achieve broader financial goals.

For years service departments have offered advanced coaching for their agents to help improve performance. Having new, advanced metrics, such as first-call resolution (FCR), can give supervisors and agents an all-around picture of performance and provide insight as to how agents can improve. Sales can learn from this, as well. This means looking beyond quota attainment to things like total customer journey across channels, lifetime value, or upsell and cross-sell rates. In order to set your organization up for success, sales departments should map out plans to measure multiple activities and tie them into the sales commission engine. This gives a truer perspective of the salesperson's performance, how his grade compares to other reps, and, most important, how well it helps improve customer loyalty.

Conversely, what can service departments learn from their colleagues in sales? First, it's important to understand that solving the customer's problem efficiently is key, but it's not the only issue. Most people are motivated by recognition, reward, and personal growth, so adding compensation and recognition tools, such as variable pay and bonuses based on customer feedback and returning customers, are at the core of tying multiple metrics to real agent improvement. It is a significant trend to add variable pay plans to service functions, leveraging plan design ideas from sales.

Let's look at an example of how Dell Computers addressed this issue.

Dell has long been praised for its operating efficiency, inventory management, and logistics. Dell knows that low customer effort is directly connected to customer loyalty and the potential for future sales, so the company uses an FCR/Issue Resolution metric to gauge performance. In doing so, Dell has generated compelling results, including helping to support its customer-centric culture. In addition, the company uses NetPromoter to gauge its customers' satisfaction, as well as provide its agents with rewards, superior training, and sharing of best practices to help influence first-call resolution.

Three steps to get started

Once a company makes the commitment to reengineer its sales and service processes for improved customer centricity, where does it start? Here are three steps to take in order to systematize strategic management processes.

  1. Leadership—Cross-functional performance change starts at the top. Buy-in must be secured from the leaders of key departments (vice president and above) in the organization including, sales, service, IT and others.
  2. Land and expand—Rather than quickly committing the entire organization to change, pick one department, such as customer service call centers, to serve as the test case. Pick one issue, such as up-sell/cross-sell, to address.
  3. Partner—Find a technology partner that has experience with these issues and has a track record of success. Ask about best practices, similar markets, and data that show trends/results to ensure that the vendor has a proven history of achieving success.

It takes a village to raise performance

While it may sound as though there is a lot of heavy lifting involved, it's the successful companies that have the strength, vision, and personnel to reengineer around customer lifetime value. Companies that have traditionally relied on metrics that view performance through a one-dimensional looking glass are missing opportunities and can be outflanked. Successful companies are the ones that can rally multiple departments to drive change while never losing sight of the goal: increased sales, stronger customer loyalty, improved operations, and reduced costs.