The "Alignment Problem" Up Close and Personal

A friend of mine makes a decent living working at a contact center where for years the primary activity has been fielding inbound calls from retail customers interested in buying one or more of the firm’s high-end products.

Not long ago, however, this firm decided it should be doing a better job of managing relationships with its customers, so it introduced CRM software to begin tracking callers and the sales reps they talk to. They wanted a record of each customer’s information, along with a synopsis of each call and its results. My friend, who is a firm believer in the power of relationships to build sales, was part of the pilot program that introduced the system.

But he told me the system didn’t work very well when it was implemented, because the sales people at the call center were undermining the company’s objective, which just didn’t align with their own objectives (to maximize their commission income).

I call this an “alignment problem” and I’ve written about it in the past. It’s the kind of problem you get whenever you try to reconcile conflicting accountabilities, incentives, or metrics at a company, and it is a frequent affliction that plagues any company trying to turn itself into a more customer-centric operation. The alignment problem can only really be resolved at the senior-most levels of a company because, among other things, it frequently involves managing shareholder expectations.

This company wanted its sales people to begin cultivating relationships with past buyers, because they felt that by maintaining relationships they would generate more customer loyalty and future sales. So to ensure that their reps did this, they began requiring everyone to make at least twelve outbound contacts per day with customers they’d handled sales for in the past – that is, with the customers that were allocated to them by the CRM system, based on past transactions. And under the rules of this quota system, only a voice contact was to be counted. It wouldn’t be sufficient for a rep to make twelve attempts – he or she had to reach twelve folks on the phone, which usually meant making 20 to 30 or additional attempts, and would often consume and hour or more of a rep’s day.

But according to my friend, the company’s managers were soon puzzled by the fact that the CRM system wasn’t producing the results they had hoped for. In fact, there was no noticeable uptick in sales at all. If anything, the reps’ productivity numbers declined, upon implementing this set of processes.

It should be obvious, however, why this was. The company’s call-center reps were all commissioned sales people who lived and died by the sales they made. By requiring them to take time out of their day to accomplish one more task – making a certain number of outbound contacts – the company was reducing the time they had available to field inbound calls and make more commission.

The reps had quickly figured out that making contacts with previous customers and trying to get them to buy something more was not a very promising idea (for the reps). There were calls coming in that could generate commissions right now, while building long-term relationships with past customers would only pay off much later, if at all.

So to minimize the time required to make these dozen outbound contacts, many of them didn’t try to make contact with the folks who had bought the most expensive or comprehensive product package the last time around. While these were the company’s best customers, based on history, they also tended to be much more difficult to reach on the phone. Instead, the reps would call as many small-purchase, easily reachable people as possible, even though they knew they wouldn’t be selling anything to them, because they just want to “check the box” as fast as possible and get back to answering the phone. And earning commissions.

For a company wanting to strengthen its customer relationships, there’s an important lesson here. You can’t simply decree that employees should engage customers in relationships, for the long-term benefit of the company. Your employees have to want to do it.

And how do you make this happen? I have my own ideas, but what would you do if this were your company, and you had to come up with a policy that would push it in a more relationship-oriented direction? Write a comment with your suggestions, and Part Two of this post will go up in a few days.