Following on from the earlier post about focusing employees on the lifetime value of customers I got to thinking about the part that incentives play.

The purpose of incentives is to focus the employee’s attention and efforts onto the things that matter. Yet most incentive programmes (in a retail environment especially) are fairly one-dimensional and short-term in nature by simply rewarding immediate sales. When employees are compensated solely for sales volume (or value) then naturally that’s what they’ll work on … often at the expense of service to existing customers.

If we know that service –> satisfaction –> loyalty –> increased revenue why are these components often missing from incentive or reward programmes?