Case Study: Carphone Warehouse hangs up on commission
Carphone Warehouse removed commission from all its London stores in November 2008. Following a successful trial, it has now extended this to its 820 stores across the UK.
Andrew Harrison, Carphone Warehouse chief executive, says the organisation recognised that the mobile phone retail industry had suffered in the past from a reputation for hard-sell tactics and poor customer service.
The move away from commission was designed to create a different culture, assuring customers that they would receive a truly impartial service.
"This is also great news for our employees, who will get a significant uplift in their basic pay, which is of real comfort to them in the current economic environment," says Harrison.
Rewardworks director Steve Watson says: "There is no motivation to help customers who are not going to buy from you.
"Carphone Warehouse is an established brand now, so sales are easier and commission isn't necessary."
Summary
Carphone Warehouse removed the commission for the staff and increases the basic wages.
Due to the commission reason, the staff will give hard-sell tactics and providing poor service. Therefore the carphone warehouse removes the commission. The removed of the commission will improve the service towards the customer by the staff.
As what the CEO said, the increasing on the basic salary would be a positive action done to the employee in this economic downfall that affects a bad sale.
Lastly, due to carphone is a significant brand that is well known throughout the industry, therefore commission isn’t a compulsory and the sales of carphone would increase.
Question 1
How does removing of commission from carphone warehouse stores help the customer? Will it help in the employee’s income?
The case study mentioned that the company is removing commission from Carphone Warehouse stores, the employees get a significant uplift in their...