By Rick Moss
Home Depot is taking an unusually direct approach to the challenge of getting superior customer service out of its employees. Its new "Orange Juiced" program (re: employees' signature orange aprons) earmarks rewards of up to $25,000 per quarter for stores that provide the best customer experiences. Individual employees can receive bonuses of as much as $2,000 per month or $10,000 per quarter, according to MarketWatch. That adds up to a $30 million commitment from the head office.
Most experts would stand behind the idea of "incentivizing" workers to get the results you're looking for, and doing so based on sales objectives or other quantifiable performance measures is standard practice. However, it gets thorny when judging something as subjective as how you treat customers.
Home Depot's answer involves a three-tier assessment that attempts to balance out multiple views on the situation: "voices of customers" via phone and internet surveys (there's contact information printed on store receipts); pier reviews; and manager reviews. Rewards are given for the biggest improvements in customer service and keeping service levels at their peak.
Jose Lopez, Home Depot's chief customer officer, says that it's ultimately customer loyalty that they're after. "Overall satisfaction translates into loyalty. We want to make sure that when people are having to make a decision about where to shop, they will cross over many lanes to come to us vs. anywhere else."
Despite some nods to the progressive thinking behind the initiative, industry experts interviewed by MarketWatch said the program was sidestepping some long-standing issues.
"It doesn't solve the basic, core problem of having knowledgeable people working in your stores," said George Whalin, founder of Retail Management Consultants and RetailWire BrainTrust panelist. "In recent years, Home Depot has spent very little educating people."
However, Marshal Cohen, chief industry analyst for the NPD Group, points out that, for better or worse, the new program could shift emphasis from operational tasks to serving the customer. "It's easy to ignore the customer because no one's keeping track of that, but they are keeping track of whether the racks are stacked and all the other additional duties are completed," he said. "This is a very aggressive move for Home Depot."
Moderator's Comment: Is it possible for retailers, or any employer for that matter, to set up a fair incentive program for something as subjective as customer service? Will the workers that wind up feeling overlooked ultimately outnumber the ones that get "juiced"?
I appreciate George Whalin's concern about the lack of training and how that could hamstring the program, but one could argue that if this program can pump up worker enthusiasm enough, it could actually cause the "tail wagging the dog" effect of creating an employee-driven desire for better training.
And what should not be discounted is the simple motivating power of hard, cold cash. It's not that workers don't appreciate the intangibles...good working environment, flex-time, a nice pat on the back every now and then...but, as Mr. Lopez says so eloquently, it doesn't have to be all that sophisticated sometimes.
"We want to be juiced about serving our customers. I know it sounds a little corny, but trust me, it plays well. The response has been phenomenal." - Rick Moss - Moderator
Will Home Depot's new ''Orange Juiced'' incentive program be a success?