July 18, 2019

Strategic Convergence: Workforce, Customer & Channel Performance Management

Peter Djokovich

Peter Djokovich
Senior Partner/Commission Systems

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We all know that what goes around, comes around. Business moves in predictable cycles.

Once again, in an evolving uncertain business climate, different business relationship and performance expectations are beginning to re-emerge: “new” to some, “back to the future” for others.

Across every sector, the recent “pop-culture” single-dimension focus on distribution tools, "next"-tech, image, vanity metrics, activities, is once again beginning to reveal a fundamental weakness in representing true success. We have been here before. Motion is irrelevant if there is no progress. Activity is pointless if there are no meaningful results.

As new and existing distribution models emerge and converge, as new channels of sales and service establish themselves, as both the workforce and the customer base begin to explore and seize new relationship opportunities, never before has it been more important to manage total relationship performance: the outcomes and value-propositions of all interrelationships between providers, customers, and distribution channel partners.

The last time we were in this stage of the Business Relationship Cycle, a (prior) tech-fired “sales culture” emphasis that was certainly effective in the short-term, eventually exposed later-stage weak and unreliable customer and channel partner relationship retention and profitability. Companies got the business, but couldn't keep the business (to generate profits). Companies laser-focused on Cost of Acquisition, but ignored Costs of Retention.

Most sales- or distribution-focused performance management and incentive compensation programs that primarily rewarded volume production, ignored customer relationship enhancement and retention. The result was steep declines in customer satisfaction, high and costly account and customer attrition, and ruined relationship and company profitability.

These consequences are re-emerging as valuable customers explore new distribution channels, expanding market opportunities, and better workforce service levels: high-value customers are your competitors’ primary targets.

Also, channel partner relationships are creating significant partner-to-customer relationship dependencies, and attrition risks. Managing the performance of post-sales channels of distribution and service will dramatically improve the preservation/retention of high-profit customer relationships: high-value customers are ‘flight risks’ with under-managed, wrongly-incented third-party channel distribution partners.

Do you know who your high-value customers are? Do you know who your high-performing workforce members are? Are you prioritizing the retention of both?

Today, mindful companies are measuring (and incenting) not just Sales, but Relationship Profitability and Retention/Enhancement, Referral Productivity, Service Quality, and real Customer Satisfaction; for both individuals and teams; for their workforce, distribution partners, and customers: three-dimensional relationship performance management.

From the same customer transactions, enterprises can create performance scorecards and compensation/reward plans for their workforce and management (commissions, bonuses, overrides, merit pay), their customers (loyalty, frequent buyer, service escalation), and their full-range of sales, distribution, service and support channel partners.

Proactively managing all dimensions of your Relationships, based on measures of Value, will optimize your successful goal achievement through all seasons of the Business Relationship Cycle.


My perspective is built upon providing growth, sales, distribution, and customer relationship management strategy execution advisory for just about 35 years. I’ve had the opportunity to assist over a thousand organizations acquire and retain top performing employees, channels, and customers. My clients have achieved consistent success in the short, medium, and long-term; some I have served for over two decades. If you'd like me to write or comment on growth strategy development and execution, performance management process and technology, or performance-based incentive compensation plans or technology, please reach out via my advisorycloud profile.

Copyright © 2019, Peter Djokovich, All Rights Reserved

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