Working closely with our American colleagues, certain phrases and terminology have started to slip into my daily vocabulary - I have found myself "reaching out" and asking for the "conference bridge" to raised eyebrows from our more conservative English customers!  So I thought it would be only fitting in my debut blog to give an ‘elevator' pitch - another American colloquialism I've picked up - for ICM software.

Incentive Compensation Management or ICM as it's abbreviated, sounds complex, however the premise is very simple.  Consider a single repository for all variable pay data against which employee and channel partner performance vs. target can be measured, monitored and remunerated.  Add into the mix a suite of easy to use tools for modelling and maintaining pay plans, workflow and authorisation controls, pay statements, and performance bulletins, and you have a powerful vehicle for driving and tracking sales performance.  And the icing on the cake is, ICM will make money for your organisation and deliver a rapid ROI.

The concept is not new but an awareness that advanced software exists to aid companies in expediting a successful sales compensation strategy is amazingly low.  The majority prefer to think that their processes and pay plans are unique in their complexities and that no single software application could possibly handle their requirements!  Indeed, many organisations in Europe and in the US still rely on spreadsheets to calculate commission and bonus pay, staying wedded to their one-size-fits-all pay plans, and/or creating multiple databases, administered by numerous administrators to squeeze in new measures that can't be accommodated by the legacy database. 

Executives cannot logically hide behind this security blanket any longer - getting incentive pay right can mean the difference between profit and loss, retaining and losing top sales talent, or leading and trailing the competition, etc.  Advanced ICM applications offer a platform for tailoring pay plans to individual roles to communicate goals and targets.  Setting achievement statements against individual goals, and delivering payments in a timely manner means sellers gain trust in the plans and the results - the organization can start to drive and truly pay for performance!  

One of our customers, Cable & Wireless, took the leap of faith and saw its operating costs decrease by 37% after implementing our ICM solution, Merced Incentive Management.  Likewise, STA Travel used Merced Incentive Management to push sales of higher margin travel products such as insurance and accommodation - as a result sales increased by 21% and 14% respectively in a 12 month period, with overall productivity up by 11%. 

ICM solutions offer companies the ability to test new incentives in advance of being launched using an intuitive plan builder for modelling and maintaining business rules.  In this way managers can be assured of accurate forecasting, that an incentive will actually work, and that the commission budget won't be blown - modelling or tweaking can be undertaken until the incentive is spot on.  More importantly, all this can happen rapidly, so if a competitor launches a promotion one day, you can counter their efforts within hours. 

Bloor Research has written a white paper on what to consider when looking for an ICM system.  Check out a complimentary copy here: http://www.practique.co.uk/knowledge/whitepapers_bloor.htm

Well, my elevator pitch may have been a bit long, but we do have very tall buildings here in the UK and I do speak fast!

 

Is your organization looking to reduce call center expense in an adverse economy?  FCR can give your organization insight into broken technical processes and fractured training regimens in order to realign both people and processes.

As with many contact center metrics, First Call Resolution cannot be understood without context.   FCR is a single metric among several operational metrics that combine to create a key measure of customer satisfaction.  Take the following, for example.  Say a customer calls into a contact center to request a rebate on an item just purchased.  The call center agent efficiently grabs the individual's mailing information and fires off a task through the fulfillment system requesting that a rebate packet to be sent to the customer.  By industry standards, this agent completed his or her responsibility, and would have received a high FCR score on the call.  Is this mailing request the only data point that should go into First Call Resolution scoresDoes this high FCR score reflect the customer's experience?  Was this the first, second or third time a rebate was requested?  Should the customer have instead received rebate information at the time of purchase that would have made this call unnecessary?  What if this operation is receiving hundreds of these calls per day?  Per month?  Does this represent a significant number of calls for the operation?  And what does this say about how a product is being sold in channel stores, or about how the manufacturer is packaging merchandise?  Or what if an internal process is disrupted and the rebate package never actually reaches the customer?  Inevitably after several weeks of checking the mail, the customer will call back into the call center to request the rebate packet yet again.  Is this an isolated incident, or does this happen a lot?  As you might imagine, this iterative process can have significant cost implications across the board. 

So the million dollar question is, if your operation can't measure all these individual agents and processes, how can you expect to manage FCR?  This sort of disjointed process can lead to customer dissatisfaction, or worse, customer churn. 

So how should First Call Resolution be measured?  FCR rates can be influenced by many different touch points.  So the key to truly measuring FCR is having visibility into data channels across the organization - giving organizations the ability to incorporate data from a variety of sources, including CRM, IVR, and quality monitoring systems, to triangulate the data points needed to get an accurate, meaningful measure of FCR, and to link tactical performance management goals to strategic FCR initiatives.  

The original agent in this example fulfilled his or her duties during that call - gathering customer information and sending off a request for a rebate packet to be mailed - but in many people- and technology-intensive organizations, process breakdowns, such as the one in the example, often have nothing to do with individuals.  To combat this issue, performance management applications arm complex, multi-faced organizations with analytical insight into their business processes, enabling them to incorporate data from both people and processes spread across the organization, to produce a measure of FCR accurate to that particular organization. 

Having a 90% FCR rate doesn't necessarily mean that all your organization's issues are resolved.  Rather FCR is the X-Ray that offers insight into your organization's broken bones - the disjointed processes and training gaps that become organizational cost burdens and hinder customer satisfaction.

 

Now that Merced offers both sales AND service performance management, a lot of people have been asking me what performance management really means - how does Merced do it and what do we offer that existing players in the market, both service performance management and incentive compensation vendors, do not? What makes performance management different from business intelligence?

So I'd like to highlight three things that have made us successful with customers and unique in the market:

First, we keep reporting projects aligned with what matters to our customers' businesses.

Many performance management projects start out as or are closely related to a reporting project. To make a performance management project successful, it is imperative that each aspect of the initiative be tied to overarching company objectives.  Therefore, at Merced, we not only automate and streamline the reporting process, we also ensure that an operation's reporting is closely aligned with its guiding business strategy.  At a very fundamental level, companies must deliver a great customer experience at a low cost. Merced's performance management applications are unique because they close the loop between reporting processes and actual behavior change at the front line, ultimately leading to improved customer satisfaction, whereas other vendors, specifically in the BI space, stop at reporting.

Second, we understand the reality of the details in these environments.

Merced lives and breathes the challenges of getting, cleansing, organizing and presenting data.  We get the challenges supervisors and managers face in managing in these complex operating environments - the difficulty of getting to the root cause of problems and then making real changes.  We've been doing this for 7 years now.

Third, we focus on the human factor.

We don't just live in data and reporting.  We blend our expertise with a human side - the side where operational improvements are actually made, and customer relationships positively affected. We have built best practices into each of our applications - from how supervisors should approach coaching, to how business owners should incent employees.  It is this human factor that we build into our products which makes them work.

The devil really is in the details, and it is indeed our attention to detail that has made both our company and our customers successful over the last 7 years.   

 

I'm thrilled and proud to announce Merced's first acquisition in our company's seven year history (to read more about the acquisition, click here). This is an exciting acquisition for three reasons:

First, the addition of incentive management technology is a great complement to our existing strength in performance management.

Merced's heritage has been rooted in helping companies better measure, manage and improve their operational performance. Our software has been built from the ground up to address the unique challenges in driving performance in complex, customer-facing operating environments, and our traditional focus has been on behavior change at the front line - agents, sales reps, field technicians and their supervisors.  This has been the key to generating significant performance improvements for our customers.

I believe that there is incredible value in integrating incentive and performance management technology.  Simply put, too many companies today are forced to design and manage incentives in one system and to track and manage performance in another. This siloed approach leads to wasted incentive dollars and missed opportunities to motivate employees and drive performance aligned with company goals.

Second, for customer-centric organizations, there is measurable value in having an integrated sales and service solution - currently, there is a burning need for this in the market.

In working with some of the largest sales and service operations around the world, I'm convinced there's a missing link.  While the market has software to help organizations coordinate transactional management across sales and service functions (CRM), it doesn't have software designed to drive employee behavior change and improve execution across all customer touch points. This lack of unification across multiple functions leads to a double whammy of poorly served customers and large cost inefficiencies. To be truly customer-centric, companies need to measure, manage and motivate in an integrated fashion across all customer-facing outlets.

Third, in Practique, we've found a company with a similar vision and set of values.

Over the years, I've seen first-hand how hard it is to build great performance management technology. It turns out that constructing the correct data models, distributing the data, and providing the means to take action, require A LOT of complex technology. We've been perfecting that same technology over the last 7 years and will continue to do so in the future. It also turns out that it takes a lot of domain expertise to help companies generate real results from their technology investment - and that's what Merced Systems specializes in.

So when we first talked with Practique, our number one priority was making sure that they had the technological strength to truly solve the often arcane but fundamentally important foundational problems of incentive management, and that they had the capability and track record of standing by their customers to ensure achievement of  desired results.

Practique has invested a lot in making their technology first-class over the last 11 years.  But more importantly, they've paired their superior technology with a committed team of experts who know that what customers ultimately care about is not buying technology, but about getting a problem solved and achieving results. This is why I'm so excited about our collaboration - Merced and Practique are two companies who share similar values and cultures centered around building great technology, assembling great teams and serving our customers.

Combined, we now offer the most comprehensive solutions that will allow you to better acquire, retain, and serve your customers.

 

A few weeks ago, I was interviewed by an MSNBC reporter covering consumer issues and was quoted on a few of the more dramatic points made about "incentives gone wrong," specifically relating to call centers.  So, I wanted to take this opportunity to share some of the material that didn't make its way into the blog, with regard to effective incentive programs.

While it is rare, the fallout from some companies' incentive programs-gone-wrong have ended up as "customer nightmare" clips on YouTube.  So, if your company is attempting to improve call center agent behavior, and ultimately customer experience, here are a few tips to creating a successful incentive program:

1. Communicate the point of your incentive - Taking the time to introduce an incentive program with clear individual goals, standards for measurement, rules for payment or qualification, and purpose will lead to more impactful results, and will help connect company goals with the desired agent behavior. It's important for both the front line and business executives to be on the same page.
2. Pick the right metric calculation for positive customer and company impact - The call center industry is notorious for its compulsive focus on productivity, as particularly measured by Average Handle Time (AHT). Driving an incentive based solely on this metric can have the unintended and undesirable consequence of agents interrupting customers, excessively transferring calls, or worse-hanging up on customers. The key here is to balance AHT or other productivity metrics with Quality or Customer Satisfaction, so agents are motivated to perform well on both standards.
3. Design your incentive program for maximum individual impact - Posting numbers and performance metrics on the wall that no one on the team can understand, let alone calculate, can lead to more questions about numbers and less focus on improving behavior. The connection between an agent's behavior and the numbers tracked in the incentive program should be clear and delivered to every agent in a timely manner. For sales calls, particularly those that take time to fulfill, consider delivering the "sales activity" metric (i.e., offers, accepts) rather than revenue paid to the company, so that agents can track their daily progress towards driving sales and continue to improve.
4. Train your supervisors to praise and counsel on the incentives - If adequately prepared, your front line management can quickly reinforce, or correct agent behavior in response to new incentive programs. Give supervisors the tools they need to evaluate behavior and progress against the metrics used in the incentive program. Make sure they have clear standards for measurement, and take immediate action on any agent found ‘gaming' the incentive inappropriately. Public praise for agents achieving success, and swift corrective action for those breaking the rules will also drive the positive impact of the program.
5. "Test and learn" - With the introduction of any new incentive measurement program and supporting metrics, managers and executives will quickly uncover challenges in delivering results. Problems with desktop resources, IVR call routing, metrics calculation, and rules for payout will surface when employees are hoping to maximize their results, or take-home pay. So, plan for a ‘trial' period to measure the new program and evaluate the operating results to maximize the potential benefit of the program once fully implemented.

 

With so much riding on the behavior of front line employees, a successful incentive program requires examination of each of these principles so that customer, company, and employees prosper. Many of our customers use incentive programs to great, positive effect on their business, and I would love to hear more personal success stories from your company.

As a key element in performance management, coaching in sales and service operations can lead to significant gains in customer satisfaction, revenue, and productivity. Unfortunately, in many operations today, coaching is not managed strategically. Here are three considerations to help you take a more critical eye to your operation's current coaching practices.

 

Examine your coaching "culture": Far too often coaching in many operations is more intuitive than it is based on fact and data.  This typically results in a lack of guidance on specific actions for improvement. Take a step back and ask yourself, "Is coaching in my operation tuned and empowering? Does it force accountability? Is it tied directly to overarching company goals?" If you answered "yes" to these questions, then your organization is probably receiving positive returns on its coaching strategy. If you answered "no," your next step should be developing a true "coaching culture" in your operation focused on improving employee performance, reducing attrition, and increasing motivation.

 

Consider how you target agents for coaching: Is your organization targeting the right population of agents to coach? Or is your operation spending a disproportionate amount of time on the typically smaller populations of "best" and "worst" performers, rather the largest population of agents- the "mid" performers, who most often have the greatest potential to improve? Even the most motivational of coaches can be ineffective if they don't coach the right agents on the right metrics at the right frequency.

 

Evaluate the training and resources available to coaches: Do your managers, supervisors and coaches have the tools and resources they need to be effective? Does Management have visibility into coaching activities to help steer strategic enterprise goals? Supervisors and managers need easy access to comprehensive performance data, and a clear set of best practices to develop their teams. But they also need a consistent follow-up strategy to evaluate agent progress and the impact they're having as coaches. Finally, with quick access to the information and tools needed to coach effectively, coaches across your entire operation will become more efficient, and thus have more time to spend developing their team.

 

While we hope this helps you shape your path to improved coaching practices, the first step towards operational success is to develop and commit to a true coaching culture at all levels of the organization - ensuring that both managers and employees comply with standard coaching practices, that coaching sessions happen with clockwork regularity, and that progress can be accurately measured so credit can be given where credit is due.

 

Because the backbone of a sales and service performance management system is good, clean data, one of the most frequent questions asked is how a tool like Merced Performance Suite is different than Business Intelligence tools (BI). There are many feature differences, but the main difference I see time and again is that a performance management system closes the loop from data to action to result. BI may present data to end-users, but it leaves it up to them to change their behavior to get a certain result. A performance management system, on the other hand, is a closed-loop system that will not only process and present data, but will also generate alerts and kick out a follow-up activity - scripting a specific action for a particular person to ensure performance gets back on track.

 

Consider this simple but powerful example:  Your company finds that quality levels are running low for a certain set of employees.  A performance management system can send out a task to that person's supervisor, requiring the supervisor and agent to document what steps they are taking to improve that employee's performance. This gives managers visibility into activities and interactions that were previously undocumented.  The performance management application is the critical enabler of this process, alerting specific individuals when training and development sessions are needed as well as tracking all follow-up activities to ensure performance improves.

 

While performance management technology may sound straightforward, a system that "closes the loop" requires different technology than one that merely serves up reports and data. Performance management systems are relatively new so many companies are just now realizing their true potential. And, at the end of the day, companies are in the business of measuring, managing and improving performance, not raw data.

 

So what is Sales and Service Performance Management?  Formally Sales and Service Performance Management (SSPM) is the practice of leveraging performance management technology and change management processes in customer servicing and selling environments.  Further, SSPM initiatives must have 3 characteristics:

 

• Data integration from all sources in the operation
• Accurate reporting across a dynamic hierarchy consisting of thousands of employees
• Performance data delivered to every employee in the organization with the means to take immediate action and change behavior

 

More practically, SSPM is a combination of process and technology that helps organizations execute on their key initiatives including:

 

• Increasing customer satisfaction and experience
• Aligning sales incentives with corporate objectives 
• Introducing sales into service operations
• Up-sell and cross-sell programs
• Reducing attrition
• Improving coaching and development

 

Because sales and service operations (e.g. field sales, retail sales, partner operations, contact centers, field service, and back-office organizations) are typically people intensive, employee behavior change and culture transformation are the drivers of sales and efficiency gains.  By empowering every employee in the organization with actionable information, not just executives and analysts, individuals across the organization can make better fact-based decisions guiding their daily activities. By automating key administrative activities, front-line managers are able to become more effective and efficient, having more time and better information to coach and develop their teams. And finally, with a complete view of performance, executives are able to identify emerging trends and take action more rapidly.

 

There has historically been confusion in the marketplace about what sales and service performance management is.  We've launched this Blog to help clear up the confusion. Some providers claim static dashboards and reports delivered to a few executives and analysts constitute a performance management solution.  These solutions leave the most important part of the organization out of the process - the front-line.  At the same time, operations searching for a better solution have spent years developing an internal data mart or data warehouse with a generic business intelligence tool and still haven't achieved their desired results - having experienced project delays, functionality short comings, inaccurate data, and the inability to link data to specific employee actions.

 

The intent of this Blog is to help organizations better understand the principles of performance management by sharing our experience helping some of the world's largest and most complex sales and service operations transform the way they sell to and service their customers.  We welcome your feedback and hope you will use this forum to share your own experiences.