Even though paying employees for delivering good customer experience is a bad idea, many firms still do it. However, there are some who have seen excellent results since eliminating this practice.
A new Forrester report details how Volkswagen Group Australia (VGA), a firm in an industry that’s notorious for this practice, ended CX bonuses and saw CX and sales improve.
Two years ago, they stopped paying dealerships bonuses for reaching CX score targets. Instead of seeing scores drop, they:
- Improved CX scores. When Volkswagen Group Australia stopped paying bonuses for achieving CX score targets, CX scores went up. Now, two years later, scores are still above what they were before they stopped paying bonuses.
- Put millions of dollars back into the business. VGA used to pay out CX bonuses over A$5 million per year. When ending these bonuses, VGA decided that the money would go back into providing increased value for customers and dealers.
- Improved dealership profit. Dealerships that meet or exceed the CX targets make, on average, double the profit of those that don’t. According to Jason Bradshaw, their chief customer and marketing officer, “The data reinforces that when you sustainably and consistently deliver a great experience to customers and employees, the business is rewarded through improved profit.”
- Saw a marked, positive change in conversations about CX. While Jason knows that there is always room to improve VGA’s customer-centric culture, he saw a huge success: The conversation around the necessity of paying a bonus as the only way to get a CX result has completely disappeared. This was a major change in the conversations between VGA and its dealers.
More insights are also available in this blog post by Maxie Schmidt, principal analyst and author of the report.