Have you ever walked out of a store because of poor customer service? Or felt frustrated because the employee at the other end of the phone didn't seem to care? Or after enduring a bad experience with an employee at an establishment you said, “never again"?
Customers react first and foremost to the employee that they're dealing with, the one they're facing, whether the transaction is financially significant or not. To the customer, that employee is your company, and these decision-makers will consider the treatment they receive as a reflection on your company, for good or ill.
The Forgotten Employee
It's worth noting that the person who just caused you to take your business elsewhere may be one of the lowest paid employees in that organization. Does that reward/impact relationship make sense to you? Perhaps the organization doesn't recognize/reward (value) the impact that their employees can have on customer relations.
Many companies have long ignored the importance of the customer-facing job (non-direct sales) in determining a position’s value to their organization. They consider education (what you know), experience (how long you've been doing something) and competitive survey data (what others are paid) in setting their pay scales. The fact that the position also has the power of gaining or losing customers is often lost on them as “just part of the job description.”
Some job evaluation systems may give a nod for those who face customers on a regular basis, but such recognition is not often viewed as a critical factor – nor does it usually help determine where in the salary range the incumbent is paid.
Oftentimes it's the position with the least amount of “cachet” that presents the jobholder with the opportunity to influence customer action and reaction. As an example, the employees most commonly approached by guests at Walt Disney World are the Custodial Workers (e.g.; when does the 3:00 parade start?).
Is it not surprising then that these employees can have as great an impact on customer goodwill and retention as the leaders of the organization? Studies have shown that having a pleasant experience when dealing with a company often outweighs price considerations and marketing glitz, as people tend to shop where they’re most comfortable and feel valued.
What You Can Do
However, that doesn't mean that you must pay more to these employees than the marketplace suggests, but it's in your best interest to ensure that, at a minimum, they're fairly treated:
- Ensure that your actual pay practices center on the middle of the salary range or higher. Don't risk having minimum pay scale workers interact with your customers (outside of fast-food [that’s a #2, right?] outlets).
- Hire well into the salary range for qualified candidates. This isn't a time to be cheap. That dollar you saved today could cause you to lose a great deal more later.
- Modify your performance appraisal process to recognize the customer facing role; attitude is just as critical here as know-how and experience. Does the employee smile at customers, or at least give them their full attention?
- Avoid structuring these as “dead end” jobs. Wherever possible offer upward opportunities for higher performing employees.
- Listen to these customer-facing employees; they're talking to your customers and their suggestions for process improvements – even new products and services - should be considered.
How do you know whether your company is vulnerable? 1) Ensure that these positions are regularly surveyed for competitive pay practices, and then 2) Create a metric that segments the actual pay of your customer-facing employees to determine the average compa-ratio and spotlight the presence of low paid workers. Then you'll know how well you're paying those closest to your customers.
Remember that each scenario of customer vs. employee reinforces the financial and long-term impact of those who represent you in the marketplace. Because it’s much more expensive is gain a new customer than it is to retain an existing one.
Your reputation and business success hang in the balance.
So, don't be "penny-wise and pound foolish."
Chuck Csizmar CCP is founder and Principal of CMC Compensation Group, providing global compensation consulting services to a wide variety of industries and non-profit organizations. He is also associated with several HR Consulting firms as a contributing consultant. Chuck is a broad based subject matter expert with a specialty in international and expatriate compensation. He lives in Central Florida (near The Mouse) and enjoys growing fruit and managing (?) a clowder of cats.
Creative Commons image, "Waiting for Customers," by Peter Rowley