Why Zellerbach's Customer Service Reps
Aren't Paper Tigers - part two

Overcoming Barriers

Political change also was necessary at Zellerbach: Inside salespeople needed authority to negotiate prices and commit to delivery schedules. The challenge was not in assigning this authority, but in controlling the effect it had on other business operations. For example, when inside sales reps set price and delivery times, it puts pressure on purchasing to maintain margins, on inventory to maintain availability, and on delivery to get goods to the customer on time. And when each inside rep handles 20 to 30 calls per day, the implications become widespread.

Zellerbach's comprehensive customer service program requires a complete change in both attitudes and actions of 500 customer service (now "inside sales") representatives at more than 50 locations across the United States.

To deal with this situation, Cooper developed a 15-step implementation process to use on a location-by-location basis. The process begins with selection of a location champion and continues with a three to six month assessment of the location's individuals, departments, and working relationships between departments. This assessment identifies all the changes required to support the new inside sales program in that particular business unit. The next phase involves evaluation of customer service people, selective promotions to inside sales, and then the training program. When all 15 steps are implemented, a location is onboard with the new program.

Another potential barrier to the new program's success was difficulty sustaining the "sales attitude" created by the training. Inside sales representatives need to realize that every customer call represents an opportunity to sell additional business. For example, when a specific type of product is not available, the inside salesperson must suggest and secure an order for a different but comparable product.

To motivate and sustain this type of activity, Morris and Cooper recognized the need for a new compensation plan. Obviously, when customer service reps have any sales responsibility, some kind of sales-based compensation will motivate them. But where should this compensation come from? If a new plan appears to threaten compensation of field salespeople, there will surely be resistance. This is one reason why some planners peg customer service incentive compensation to "add-on" or "over-quota" sales. However, even in these systems the field salespeople may rightly lay claim to some portion of this compensation, particularly when it comes from "their" clients.

Zellerbach's productivity pay plan tracks each inside salesperson's success in terms of gross-profit dollars on orders to salary. An individual inside salesperson's salary is based on achieving his or her prior year's gross-profit-to-salary results. Then, Zellerbach pays a commission against every dollar of gross profit more than the prior year. The commission opportunity goes from 4 to 10 percent on the dollar depending on the over-quota amount. Field salespeople like this plan, because they also receive commissions on incremental sales.

So far, this new system has produced dramatic results. In fact, some inside salespeople now augment their salary by as much as 40 percent.

Early Results

The company has completed only about 60 percent of its three-year transformation, but 90 percent of the targeted locations have completed implementation or are in the 15-step process. Early results of the program are just coming in. . . and they are marvelous.

Zellerbach ran a test with a Midwest group whose performance ranked in the third quartile against industry standards for inside sales performance. The group moved to the first quartile in less than a year and a half as a result of the new program. Another major benefit also surfaced. According to Morris, "Under the old system, this location's outside salespeople had begun spending a significant amount of their time inside the office, helping the customer service people. Once the new program was in place, these salespeople got back out on the streets and gained a 15 to 25 percent productivity increase.

Individual success stories are just as revealing. In one case, an on-staff person raised individual performance from $50,000 to $85,000 a month in 30 days. At another location, an individual who had been considered marginal by performance standards went from $250,000 per year to $500,000 per year (annualized) in six months. In still another location, a new recruit who had a very high assessment score against the top performer success profile became a company-wide top inside salesperson in just one year on the job.

Finally, among all the on-staff customer service reps who participated in the implementation process and were promoted to inside sales, the overall average increase in individual gross-profit dollars to salary has been 8 to 12 percent.

Tough. . .But Worth It!

Building a successful service and inside sales system can be a difficult process. In some cases, lack of planning for integration of new people and roles in customer-contact positions can lead to serious confusion among customers. Likewise, cultural and organizational issues can create resistance. For example, there may be confusion as to where new customer service groups should fit into an organization. Some would suggest the sales department, others may suggest a separate profit center. HR professionals can help their companies anticipate these problems and devise ways to address these issues for the benefit of both the organization and its employees.

Make no mistake, the stakes are very high when it comes to customer service. Increasingly, companies are seeing the role of the customer service rep or inside salesperson as pivotal, in not only creating customer satisfaction but also adding substantially to sales volume, market share, sales force productivity, and corporate profitability. HR professionals can have a major impact on their company's success in this area, especially when they get involved in the initial strategic thinking.

As Phil Morris puts it, "After all the other issues are put to rest, it is the people in the positions that will generate results . . . or fail to get them." And finding, training, and motivating those people is often HR's responsibility.

12 Winning Characteristics for Successful Customer Service Representatives

Based on comprehensive and statistically accurate position validation studies, The H.R. Chally Group has established these characteristics as predictive of top performers in customer service or inside sales positions:

1. Optimism/enthusiasm. People with this personal characteristic expect positive results from their actions and will "hang in there" during tough going. Their optimism is usually a self-fulfilling prophecy. They see opportunities for achievement, as opposed to threats. Sometimes their enthusiasm can run unrealistically high.
   
   
2. Positive mental attitude. Because of their own inner sense of well-being, individuals with this trait always look at the positive side of situations and are very solution-oriented. They tend to discount the importance of negative events and feelings of personal failure. They try always to stay cheerful and happy, and they refuse to stay angry.
   
   
3. Competitive spirit. People with this quality enjoy competition with others but have learned to accept defeat and can be patient through failure. They really want to succeed and sometimes compete more with themselves than others.
   
   
4. "People" orientation. Individuals with this orientation can mix well and enjoy interaction, often preferring to lead the interaction. They will make group presentations when needed. They are genuinely interested in people, like to develop a wide circle of acquaintances, and are good at small talk.
   
   
5. Objective problem-solving ability. People with this characteristic have inquiring minds. They recognize and define problems, can select pertinent information for solutions, will recognize stated and unstated assumptions, will review options, and will draw valid conclusions about potential solutions. They are objective and fair.
   
   
6. Spontaneity/impulsiveness. This is a typical trait of salespeople. People with this characteristic have low reserve and relax easily around others. They can be open with others and communicate expressively.
   
   
7. Customer service orientation. In general, people with this skill take a craftsman's attitude about their specialty and will work to improve their skills. They are also very empathetic to the feelings of others, a key in handling customer problems.
   
   
8. Organization. Well-organized people strive for accurate information because they need to do tasks correctly, avoid irrelevant detail, and produce short-term results. They are list compilers . . . and enjoy checking things off their lists.
   
   
9. Customer relations skills. People with these skills enjoy sharing and helping others, but can keep a distance between their own egos and the problems they solve. They survive by building their experience base and by learning how to shortcut problems.
   
   
10. Decision-making accuracy. People with this skill are thorough in researching information prior to decision-making. It is important that decisions are compatible with their overall goals and priorities. As a result, they weigh pros and cons, identify and plan for contingencies, and consider the likelihood of success--all prior to actual decision-making.
    
    
11. Communication skill. People with this skill have the ability to make points in a clear, logical, and sufficiently interesting manner, hold attention, and focus on key points and ideas. They get right to the point and are not overly abstract or conceptual.
    
    
12. Product and customer knowledge. Top customer service representatives typically have from seven to ten years of experience. They have learned that complete understanding of a product or services features, options, and applications is critical to success, as is understanding customer needs for a product or service and the key benefits that fulfill those needs.

Back to "Classic Articles" page