Sales incentives have the potential to backfire on principals and clients alike

IS it possible your sales incentives are not aligned with customer satisfaction? - writes Robyn Henderson

It shouldn't be, because the point of incentives (for the business development team at least) is to make the customer a special offer that is a "win-win" also rewarding the sales team.

However, while researching this article with my fellow road warriors, I found that incentives can backfire on the customer ñ particularly in larger organisations if the follow-through or sales trail is too long to track.

Case 1. A passenger was a late night arrival in a capital city and went to the car rental desk to pick up the car he had arranged by phone a week before.

When he arrived at the rental desk, he was told there were two bookings for him - and was there going to be a second driver for the second car and what name should they put it under? He explained he only needed one car, quoted the confirmation number for the multiple day car hire that he was given and the second booking was cancelled. 

Then, at hotel check in, his debit card was declined. He knew he had at least A$2,000 in the account, but was forced to use a second card.

To cut a long story short, his bank confirmed there were two separate holds on his debit account from the rental car company, both for the same amount but with different reference numbers. As it was a multiple day car hire, there was a hold of 4 days' car hire plus an additional hold of A$500 for each booking because he used a debit card rather than a credit card. That is that rental car company's policy - even though he has been a preferred customer since 1995. That news solved the mystery of the A$2,000 not being accessible on hotel check-in. 

Being in sales himself he knew that sometimes there is a bad egg in the call centre who manipulates the system to gain the short term benefit of achieving the top sales for the week/month and the subsequent bonus. So when he called the car rental company, he asked the call centre supervisor one question: "During the week of XX, was there an incentive on the floor for the number of sales that week or month?"

Response: "Yes."

The incentive system had let the car rental company down because it was not monitored.

Case 2. A client was one of the first organisations to use the remodelled conference centre in a 4-star hotel for its awards dinner. 

She was assured that her event for 140 people (including a three-course meal plus drinks) entitled her to use conference rooms 1 and 2 with a dance floor, a DJ and with plenty of room for the guests to move around the room. The date was confirmed, remodelling was on track, awards winners were selected.

One week out, final numbers were confirmed, full payment was made, the awards dinner was ready to go. 

But on arrival, my client found a second event - a birthday celebration - also was scheduled and her tables for 140 people were squashed into a small area - and the dance floor was nowhere to be seen. 

The original BDM had 'left the company' and the manager was nowhere to be found. 

The hotel could not offer another area or a different venue, so they crammed into the much smaller room, relocated the DJ to the foyer and made the best of a very bad situation. 

To make matters worse, as her ceo made his speech about the company's highest achiever, his voice was drowned out by the adjacent room's 'happy birthday' greetings and party noises through the sound system.

Post event, it was discovered that the BDM who had left the company had scooped the pool, winning all the sales incentives the month prior to her resignation. Apparently the incentive was based on securing as many bookings as possible for the renovated area, as it had been closed for many months during the makeover and revenue was down. 

Sad truth

In both these situations, front line staff were in the firing line and were put in a position where they had to fix or try to fix someone else's deliberate deception. 

And probably, neither of my clients will use either that rental car company or the hotel again. 

I suggest that companies have to be conscious of the potential for manipulation of sales incentives. Repeat customers are vital and in today's competitive marketplace, no one can afford to lose a valuable client one through a faulty sales incentive system.

For more articles by Robyn Henderson, visit www.networkingtowin.com.au

Sales incentives have the potential to backfire on principals and clients alike

IS it possible your sales incentives are not aligned with customer satisfaction? - writes Robyn Henderson

It shouldn't be, because the point of incentives (for the business development team at least) is to make the customer a special offer that is a "win-win" also rewarding the sales team.

However, while researching this article with my fellow road warriors, I found that incentives can backfire on the customer ñ particularly in larger organisations if the follow-through or sales trail is too long to track.

Case 1. A passenger was a late night arrival in a capital city and went to the car rental desk to pick up the car he had arranged by phone a week before.

When he arrived at the rental desk, he was told there were two bookings for him - and was there going to be a second driver for the second car and what name should they put it under? He explained he only needed one car, quoted the confirmation number for the multiple day car hire that he was given and the second booking was cancelled. 

Then, at hotel check in, his debit card was declined. He knew he had at least A$2,000 in the account, but was forced to use a second card.

To cut a long story short, his bank confirmed there were two separate holds on his debit account from the rental car company, both for the same amount but with different reference numbers. As it was a multiple day car hire, there was a hold of 4 days' car hire plus an additional hold of A$500 for each booking because he used a debit card rather than a credit card. That is that rental car company's policy - even though he has been a preferred customer since 1995. That news solved the mystery of the A$2,000 not being accessible on hotel check-in. 

Being in sales himself he knew that sometimes there is a bad egg in the call centre who manipulates the system to gain the short term benefit of achieving the top sales for the week/month and the subsequent bonus. So when he called the car rental company, he asked the call centre supervisor one question: "During the week of XX, was there an incentive on the floor for the number of sales that week or month?"

Response: "Yes."

The incentive system had let the car rental company down because it was not monitored.

Case 2. A client was one of the first organisations to use the remodelled conference centre in a 4-star hotel for its awards dinner. 

She was assured that her event for 140 people (including a three-course meal plus drinks) entitled her to use conference rooms 1 and 2 with a dance floor, a DJ and with plenty of room for the guests to move around the room. The date was confirmed, remodelling was on track, awards winners were selected.

One week out, final numbers were confirmed, full payment was made, the awards dinner was ready to go. 

But on arrival, my client found a second event - a birthday celebration - also was scheduled and her tables for 140 people were squashed into a small area - and the dance floor was nowhere to be seen. 

The original BDM had 'left the company' and the manager was nowhere to be found. 

The hotel could not offer another area or a different venue, so they crammed into the much smaller room, relocated the DJ to the foyer and made the best of a very bad situation. 

To make matters worse, as her ceo made his speech about the company's highest achiever, his voice was drowned out by the adjacent room's 'happy birthday' greetings and party noises through the sound system.

Post event, it was discovered that the BDM who had left the company had scooped the pool, winning all the sales incentives the month prior to her resignation. Apparently the incentive was based on securing as many bookings as possible for the renovated area, as it had been closed for many months during the makeover and revenue was down. 

Sad truth

In both these situations, front line staff were in the firing line and were put in a position where they had to fix or try to fix someone else's deliberate deception. 

And probably, neither of my clients will use either that rental car company or the hotel again. 

I suggest that companies have to be conscious of the potential for manipulation of sales incentives. Repeat customers are vital and in today's competitive marketplace, no one can afford to lose a valuable client one through a faulty sales incentive system.

For more articles by Robyn Henderson, visit www.networkingtowin.com.au