Avoiding the Tragedy of the Commons in Sales
The Tragedy of the Commons is a theory of ecology and environmental sciences. It is also widely applied in economics and business. It states that individuals, acting in their own self-interest, will deplete a shared resource, called the common. The title comes from a 1968 peer-reviewed paper by ecologist Garrett Hardin, published in Science. However, the concept is much older, dating to classical antiquity. It was even discussed by Aristotle.
If we view customers as a shared resource, the application to sales is clear. We need new business. We need customers to buy more. However, organizations that upsell and cross-sell indiscriminately will eventually deplete their greatest resource. They may score short-term deals, but they will lack the long-term benefits of satisfied customers. In today’s competitive market, they risk alienating and losing the very customers they need.
Therefore, organizations should place customer satisfaction at the heart of their processes and activities. This ensures their long-term commitment to your organization. Here are ways to enhance your customer’s experience and avoid the Tragedy of the Commons in sales:
A sales organization doesn’t become customer-centric by accident. It takes a concerted effort. Of course, you need products. You also need sales. But there can be too much of a good thing. This is the Tragedy of the Commons. Your customers are buying. You’re getting exactly what you need. But what if your customers seek a better deal? Rather than focus on how much you sell, build your sales culture around the customer. Consider the following:
- Top-down approach
- Hire team players
- Foster team building
For sales organizations, culture begins with leadership. Do leaders exhibit a customer-first mentality? When they emphasize a superior customer experience, so will their teams. And it’s not just sales managers and BDRs. Think about Account Executives, product specialists, and even finance. They too must see the customer at the heart of their day-to-day activities.
While it may be tempting to bring in sales superstars, consider the personalities and traits of new hires in addition to experience. Of course, sales success is important. But along with the number of closed deals and impressive revenue figures, how did customers feel about them? How did they rank their attitude, empathy, helpfulness?
Though culture starts at the top, it’s built from the ground up. Customer satisfaction begins with employee satisfaction. Team members that genuinely like and support each other are more likely to value customers. Of course, it’s great when your sales team crushes product development on the softball field. But in the office, they must unite around the customer.
Collaboration isn’t meeting in a conference room to discuss projections. It’s having a shared vision of desired outcomes. It’s all facets of an organization working jointly to achieve those outcomes. More importantly, it’s knowing how each part intersects to create a greater whole.
Sales collaboration starts with effective communication to understand a customer’s problems. And it extends to long-term, team-driven, data-based solutions. These should solve problems, provide insight, and ensure customers feel valued. To avoid the Tragedy of the Commons, the outcomes should center around the customer.
According to research cited by Zippia, a company’s collaboration index increases sales by 27 percent. It also improves customer satisfaction ratings by 41 percent. In this, we see how our work processes directly affect customer satisfaction. Here are ways to improve your team’s collaboration and place customers at the center of your processes:
- Expand access
- Share research and insights
- Increase coordination
- Create quick-response teams
One obstacle to effective collaboration is lack of access. It’s when one team does not know what another team is doing or why they are doing it. Maybe information is limited to a handful of users. Consider expanding access. This doesn’t mean opening the gates to all. But who else might find that information useful? How might easy access improve operations?
Collaboration is also sharing research and insights. Of course, we all know the connection between sales and marketing. These are so closely related we can take sharing for granted. But what about products? What about tech discovering a potential issue or even an unknown feature? How might that benefit a seller during a demonstration?
Coordination is how the parts of an organization work together. Often, these can become so ingrained that the thought of changing them is heretical. How many times have you heard, “Well, we always did it that way.” To better serve customers, sales organizations should consistently improve their internal coordination. It might not be visible to the customer. But it can still affect their experience.
Another way to improve collaboration is forming quick-response teams. You know what Ben Franklin said about an ounce of prevention. The time to prepare for an emergency is well before that emergency is even a possibility. When the time comes, knowing who must get with whom improves the customer’s experience.
All sales organizations know the benefits of technology to track and measure performance. Our CRMs and sales productivity tools can improve processes, reporting, and analytics. They can also enhance customer satisfaction. Consider the following:
- Track and measure performance
- Sync data
- Leverage sales tools
Some essential metrics to consider when tracking and measuring customer satisfaction include:
- Net Promoter Score (NPS): This measures how likely your customers are to recommend or promote you to friends and colleagues.
- Customer Satisfaction Score (CSS): Targeted questions reveal how customers rank specific products, transactions, or interactions with your company.
- Customer Effort Score (CES): This shows how user-friendly your products or services are. This is often done by prompts and pop-ups during or immediately following engagement.
- Customer Acquisition Score (CAS): This is a marketing measurement that shows how much it costs to convince customers to buy your products and services.
- Five-Star Ratings: Customers rate you based on a five-star scale. Interestingly, according to nicely.com, a 4.2-4.5 can better influence customers because it shows transparency. Customers consider this more honest than too many five-star ratings.
Data synchronization is the process of consolidating data across sources, applications, and devices. With so many salespeople on the go or working remotely, it’s essential to effectively manage customer interactions.
Today, there are many sales tools and software to measure customer satisfaction. As with a CRM, choose the best tool for your sales teams, processes, and expectations.
Your customers themselves are the best resource for gauging satisfaction. Be sure to engage them frequently. But don’t only rely on a salesperson’s impressions. Sellers may think customers are satisfied, but, internally, they may be considering their options.
Rather than assume, note the following:
- Encourage feedback
- Incorporate surveys/questionnaires/interviews
- Conduct regular win-loss analyses
Some customers might not readily share their feelings. This can be organizational, like guarding trade secrets. Or maybe they are keeping their options open. Either way, encourage feedback. Let them know their satisfaction is paramount.
Surveys, questionairies, and interviews are important. Use these frequently, and not only at the close of deals. Incorporate different types of questions. Simple dichotomous surveys only require “Yes” or “No” answers, which can be limiting. Complex Likert scales use a larger range and can be more telling.
One-on-one interviews offer more, especially when conducted at a higher level. Consider manager-to-manager or executive-to-executive interviews over individual sellers, which could skew your data.
Win-loss analyses are your best tool for gauging customer satisfaction. These can include surveys and interviews. And they can measure the effectiveness of your entire operation, from sales to products/ services and even finance. It can be tempting to focus on lost deals. However, for customer satisfaction, they are equally telling for those you won. For more, see our blog Tips for Conducting a Win-Loss Analysis.
Empower Team Members
Empowered team members can affect customer satisfaction. Do they have the knowledge and resources to address questions and concerns? No organization wants the employee who says, “That’s not my job.” More than avoiding responsibility, this is a dangerous mindset. All team members should have a can-do attitude. Something may or may not be their job. But they should know whose job it is and how to contact them. To empower your team, consider these tips:
- Reduce bureaucracy
- Streamline processes
- Sales training/coaching
Bureaucracy can be a problem. Of course, it’s typically worse in larger organizations. But it can affect small and mid-size businesses as well. Maintain an open-door policy whereby team members can easily connect with managers and leaders.
Also, streamline your workflow and processes. As organizations grow, these can become burdensome. This can filter down through your employees to your customers, affecting satisfaction.
In addition, sales training and coaching are not just for front-line sellers, like BDRs and Account Reps. Today, sales training goes further than basic sales skills. It aligns sales and service and provides consistency. It ensures your team speaks the same language, and everyone is ready to help.
In sales, we can be blinded by success. We think because we closed a deal or our customers buy, they are satisfied. However, the Tragedy of the Commons cautions against a myopic view of deals won or units sold. With ever-changing sales environments and increased competition, customer satisfaction is the true measure of success. And if we pay attention, we can retain our customers, and not deplete our greatest resource.
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