When I saw that the topic of this month’s editorial focus was Turning Your Employees into Ambassadors for Your Company, two thoughts came to mind. First, how many executives would conceptually embrace the idea? Second, how many companies really invest the time, energy, and financial resources to make it happen?
Answering the first question seemed relatively easy to me. In hundreds of discussions Barry Trailer and I have had with CEOs. CSOs, CMOs, etc. over the past year nearly everyone mouths these words: customer-focused, vendor/customer partnering, solution-centricity, etc. We all say we want to be more than just a vendor to our customers and we all understand that a major part of that means establishing meaningful relationships between our people and our customer’s people.
But now let’s take a look at what we do. In our 2007 call center study we found that many firms measure their service center reps performance based on how fast they can complete each call. Think about this for a moment: you want your reps to be ambassadors to your clients, yet you reward them for getting off the phone as quickly as possible. A saying we have had for years is; “It is impossible to get someone to do what their wallet tells them not to do.”
What about in sales? We are seeing sales rep travel budgets being monitored with a steely eye. We are seeing the number of reps a single sales support person has to support continue to rise. And what about time available for reps to do account management work? Well that is dwindling because of other selling commitments. And so it goes. Fewer people, with less time, and precious few funds to go see customers doesn’t seem like a great ambassador success formula.
In fact, based on the results of our 2008 CSO Insights’ Sales Performance Optimization study of over 1,500 companies worldwide, we actually see relatively few companies turning the desire to have their employees be effective ambassadors the marketplace into action. When we segmented the survey data looking for companies that were really great at communicating regularly/effectively with their clients to help create customer loyalty, we found that only 12.9% of the firms surveyed fit that profile.
And that means that 87.1% of the firms out there are making a huge mistake!
Why do I say that? Consider the following pairs of numbers 70.2% and 53.1% compared to 59.9% and 48.1%. Let’s put these percentages into perspective. The 70.2% is the average percentage of reps that make quota at the 12.9% of the firms whose reps consistently perform as ambassadors with their clients. The 59.9% is the average percentage of reps that make quota at the 87.1% of companies that are average or subpar at this. And 53.1% versus 48.1%, respectively, are the average win rates of forecast deals that these two classes of firms achieve in the marketplace.
If you feel your reps need improvement in being better ambassadors with your customers, here’s a quick way to monetize the cost-of-doing-nothing—of not improving. Simply calculate the impact on revenues you would see if you increased your win rate five full percentage points.
Why do these differences in performance numbers occur? When we compare the detailed performance of the two groups we see that the super ambassadors outperform their less effective peers at key selling/account service tasks such as aligning their solutions to the customer’s need, adapting their selling process to changes in the marketplace, selling value/avoiding discounting, differentiating themselves from the competition, and more.
How do they accomplish these things? Their companies make the investments needed to help them be great ambassadors. They spend money on training their people on their customers’ marketplace(s); they invest more in CRM systems and ensure their reps know how to use those systems; they give their people higher levels of access to sales knowledge management resources; etc.
And yes, these all cost money, but look at the payback! Ambassador-enabled sales teams are turning how they sell to and service their clients into a competitive edge, and a huge one at that!
So I encourage you to spend some serious time here at CustomerThink.com this month. This month’s topic is not just a nice idea to think about; it is part of the new battleground that will decide who dominates, who gets by, and who dies in the marketplace.
© CSO Insights
Jim
You and Barry have done us all a great service.
As you point out, most C-level executives feel inside them that having motivated emoployees is good for business. And journals like the Harvard Business Review regularly have articles extolling how Company A become the best place to work. But much of this writing suffers from the Halo effect and cannot be trusted. There is a dearth of hard evidence that that shows that being employee-centric is good for business. Your study helps to overcome this gap.
There are a small number of best-practice companies whose employee-orientation are legendary, whose results speak for themselves and whose inner-workings have been documented in detail. One of these is Toyota, where one of the basic principles is Respect for People. Having consulted and worked as an Interim at Toyota for over four years, I can vouch for the effectiveness of the Toyota Way. And this is not just a Japanese-thing either. I experienced what the Toyota Way can achieve in Germany, not exactly the most employee-centric of countries. And don’t even think about German customer-centricity!
If you want to know more about the Toyota Way, there are a number of good books that I strongly recommend you read. The first is The Toyota Way by Jeffrey Liker. This the book that first shed a light on what Toyota does differenetly and why it works so well. The second is Toyota Talent by Jeffey Liker & David Meier. This sets out how Toyota develops its people and then continues to develop them. The third book is Toyota Culture by Jeffrey Liker & Michael Hoseus. This is new and I haven’t had time to read it yet. But if it is as good as the other two it will be worth it.
Graham Hill
Independent CRM Consultant
Interim CRM Manager
In theory you are correct that each employee view every interaction as an opportunity to satisfy the customer and promote the benefits of doing business with the organization. Sadly, this isn’t the real world. Case in point from this past week. In response to a lawsuit, IBM executives took the retaliatory action to arbitrarily move 7600 of their frontline employees from exempt positions to a lower non-exempt position and in doing so, reduced their salaries by 15%. This translates into a lack of respect for their technical workers and only time will tell what impact this will have on customer satisfaction? I know that I would be careful doing business with a company that has this disregard for their employees.