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On Monday, JCPenney announced that it’s no longer going to pay employees commission. It’s a big shift, since sales staff in six different JCPenney departments have traditionally received it.Why is this happening?
It’s likely because JCPenney CEO Ron Johnson, the mind behind the Apple Store when he headed up retail there, has a beef with commission.
He explained it in a 2011 column he wrote for the Harvard Business Review:
“There are lots of components to [the Apple Store] experience, but maybe the most important — and this is something that can translate to any retailer — is that the staff isn’t focused on selling stuff, it’s focused on building relationships and trying to make people’s lives better.
That may sound hokey, but it’s true. The staff is exceptionally well trained, and they’re not on commission, so it makes no difference to them if they sell you an expensive new computer or help you make your old one run better so you’re happy with it. Their job is to figure out what you need and help you get it, even if it’s a product Apple doesn’t carry.
Compare that with other retailers where the emphasis is on cross-selling and upselling and, basically, encouraging customers to buy more, even if they don’t want or need it. That doesn’t enrich their lives, and it doesn’t deepen the retailer’s relationship with them. It just makes their wallets lighter.”
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