This is a question of great importance to companies with 20 to 50 employees. While there are exceptions, companies with only a few employees don’t have the resources to allocate separate people to sales and customer service. Larger companies tend to divide up these roles, providing different training and compensation plans for employees that do sales and customer service. But, there is not necessarily a clear path for companies in the 20 to 50 employee range. Here is why my former company decided not to separate these functions at first, and then went with a hybrid solution in which certain types of support were done by specialists.
My former company was in an industry with a really bad reputation (ten years ago). The industry was known for high-pressure sales tactics and shady practices. Our company was different. We wanted to create a reputation for outstanding customer service, instead of pushy sales people.
We believed that having the sales professionals handle responsibilities for both closing the sale and dealing with any communications that occurred afterwards would dramatically change the way they approached selling. It would encourage them to do a good job setting expectations and educating customers prior to closing the sale. If they didn’t, the salespeople might have to deal with unhappy customers later on.
This approach was “mostly” successful, however, it did create some problems:
- Great salespeople tended to dislike this system and felt they were undercompensated. Some left the company, because they could make more in a “pure” sales job where they wouldn’t have to devote time to customer service.
- Many of our customer service oriented salespeople did not make any effort to close sales.
- Resolving certain types of customer service issues like a hard technical support question, sometimes took a while.
Before I discuss how we dealt with these challenges, I would like to emphasize that combining these functions did achieve the intended goal. Our company received very high marks for customer service, and established a reputation as having more integrity than our competitors.
Great salespeople want to both be recognized and rewarded for their skills. The key to both is tracking their performance. We heavily relied on our CRM system to see how different salespeople were performing. We measured both their performance on the sales side (new leads that opened accounts) and customer service side (how many interactions they had with existing customers, and how frequently they were able to resolve the customer’s issue). This information was used both for performance reviews and in making decisions regarding bonuses. While salespeople may not have been able to devote all their time to closing, they received praise and financial compensation for bringing new business.
It should be stated that we did not pay salespeople a commission, but a base salary and a quarterly bonus based on both the company’s and their personal performance. We believed that providing commission based compensation would lead to poor customer service.
We did lose some good salespeople, but many good salespeople liked the customer friendly environment.
The bigger problem was getting customer service focused employees to close sales. Surprisingly, the solution to this problem turned out to be “social” pressure. While these employees earned 0 or smaller bonuses, this did not seem to motivate them. After a few warnings about putting more effort into sales, the company had to let a few of them go. However, there was a better solution that we found only years later. When we put the sales numbers of each employee on public whiteboards, there was a dramatic cultural change, and we saw an improvement in their performance. Because bonuses were based on personal and group performance, the weaker salespeople and their colleagues were suddenly aware of how these people were hurting their own compensation.
As the company grew, we did start separating certain customer support functions. The first area was technical support. Instead of having a general salesperson be the client’s point of contact in handling difficult tech issues, the company created technical support specialists which only dealt with technology related issues. This enabled tech support issues to be resolved more quickly.
Bottom Line: Keeping sales and customer support together sends a message to employees that customer support is not a second class job, but integral to the company’s success. On the other hand, it makes it harder to keep sales stars happy, and can create motivational issues for less sales driven employees. Combining sales and customer services puts more pressure on management and in the short-run can hurt sales.
Marc Prosser is the publisher of Fit Small Business.