Danielle Drexel was getting ready to make some important decisions for her company, Dynamic Printing. She had started the company in Chicago and in a little more than 12 years it had become one of the area’s largest printers. With more than 50 salespeople in the Chicago area, the company had built a reputation for quality printing, great service, and fair prices.

Over the years the printing business had changed. When Danielle started the company, salespeople called on customers. Once a relationship had been established, customers would send the work to the shop. Often the salespeople would handle the pickup and delivery or the customers would have a courier do the job. Salespeople oversaw the job and the customer had little contact with anyone other than the salesperson.

As customers demanded more and better service, Dynamic Printing had created customer service representatives (CSRs) who handled problems and inquiries over the phone. These CSRs were responsible for a group of customers and worked closely with salespeople to enhance the customer’s relationship with the company. In the last few years, Dynamic had seen the need for a third group, Inside Support Personnel (ISP), to help with the flow of orders and other issues that came up inside the company. ISPs worked for the CSRs and helped support the overall customer service experience.

As a result of these changes, each customer (particularly those who were regular customers of Dynamic Printing) had a sales team. Unfortunately, the compensation system at Dynamic Printing had not changed in 10 years. Specifically, salespeople received a 10 percent commission on gross sales for each of their customers. It made no difference how the sales were generated (by the salesperson or by calling into the store and talking with a CSR). CSRs and ISPs were paid a straight salary (with the CSRs making about 30 percent more, on average, than the ISP employees).

As Danielle sat in her office, she came to realize that this system was no longer valid. Over the last five years the sales mix had changed and sales generated in house now accounted for 50 percent of all sales for many customers. The CSRs and ISPs had expressed frustration that they were responsible for a lot of business and they received no credit. Indeed, they argued, the salespeople were receiving money for work they did with the customer. Danielle knew something had to change, but what?

Questions

1. As a CSR, what do you think is a fair solution to the compensation problem?

2. As a salesperson, what do you think is a fair solution to the compensation problem?

3. You are Danielle. What would you do about the compensation system at Dynamic Printing and why?