The counter commission writes more of a telecom brand than its advertising does

I hold the chief marketing officer accountable for the commission schedule paid to shop partners, not only for the advertising that brings customers to the shop. In a market like Japan's, where a large share of customers still sign their contracts at a counter staffed by a partner company's employee, the commission decides what is emphasised, what is skipped and what is quietly added. The advertisement is seen for fifteen seconds. The counter conversation can last an hour. When the two disagree, the customer believes the counter.

This is not a criticism of shop staff. I was one, and I later ran shop operations for a retail agency. People at a counter respond to what they are measured and paid for, as people in head offices do. When an operator pays a partner for each optional service attached to a new contract, it should not be surprised when options are attached. The responsibility sits with the company that designed the payment.

The sentence a customer remembers from the counter

Ask a customer, a month after signing, what they were told in the shop. They will rarely remember the tariff structure or the network speed. They will remember one or two sentences. Often one of them is a version of this: it is free for the first month, so you can cancel it later. That sentence is accurate. It is also the source of a large share of complaints in Japanese mobile retail, because many customers never cancel, and some notice the charge only when a relative reads their bill.

At Hinoura Communications in 2021, 58% of new contracts signed in our shops left with at least one optional service attached. Thirty-one per cent of those options were cancelled within sixty days, which told us that many customers had not wanted them. Complaints about unwanted options reaching our customer centre and local consumer affairs centres totalled 2,140 in a year. None of this appeared in our brand tracking. It appeared in the experience of a customer who found a charge and concluded that Hinoura had taken advantage of them. That conclusion was a brand outcome, and we had paid for it.

I came to see the commission schedule as the most persuasive piece of copy we wrote. Every shop manager read it carefully. It was rehearsed in morning meetings. It shaped the sentence the customer remembered. Yet it was owned by the sales organisation and reviewed by marketing only for its cost. I argued that this had to change, and that a brand team which approves every word of a poster but never reads the commission schedule has delegated its most important copy to a spreadsheet.

Paying for an explanation instead of an attachment

In 2022 we removed the attachment payment entirely. In its place we paid partners for two things. The first was verified explanation: an independent team called a sample of new customers within a week of signing and asked whether they understood their tariff, their total monthly charge and any options they had taken. The second was retention: a payment for each new customer still with us, and not in dispute with us, after six months.

The objections were serious. Our head of consumer sales doubted that explanation could be scored fairly, and he was right to doubt it. A sampled call depends on the customer's memory and the caller's judgement. We answered by letting every agency see and challenge every scored call, and by publishing the scoring guide to all partners. Our content partnerships team argued that the options were good products which customers would never discover without a prompt. Some were. We kept a way for staff to describe them, without a payment attached to the sale, and with the customer's full monthly total read aloud before signature.

The results were clear in direction and uncomfortable in cost. The attachment rate fell to 22%. Sixty-day cancellations fell to 9%. Option complaints fell to 610. Six-month churn among new customers fell from 7.9% to 5.6%. Option revenue, however, settled about ¥4.9 billion a year lower, and I had to explain that loss to a board that had seen the old figure in the previous year's plan. I would make the same decision again, but I do not pretend that a better customer experience paid for itself within the first year.

The partner who pays for our change of mind

The part of this work I would do differently concerns the partners themselves. Agency companies are businesses with payrolls, leases and lenders. When an operator changes its commission scheme, it changes their revenue almost overnight, and they built their staffing on the old scheme because we asked them to. An operator that treats its partners as a cost line will make changes that are right for customers and still damage the people who serve those customers.

We provided ¥2.2 billion of transition support over eighteen months, allocated in proportion to each agency's share of the commission it would lose. That formula looked fair in a spreadsheet. It was not fair in practice. Smaller agencies had higher staff costs per shop and less room to absorb a temporary fall. Two of them closed four shops between them sooner than they had planned. One of their presidents told me, accurately, that we had consulted him about the result but had not involved him in the design. I now ask the smallest partners to help shape any significant change, because their constraints arrive first.

There is a broader governance point. Commission and shop-support payments to our partners are several times our media budget. A board that scrutinises marketing spend but not commission design is scrutinising the smaller lever. If directors want to understand how a telecom brand is experienced, they should read the commission schedule beside the campaign and ask what a counter employee is rewarded to say.

I would encourage any marketing leader in a partner-led retail network to do one thing this quarter: sit with a shop manager and read the commission schedule together, line by line, as though it were advertising copy. For each payment, ask what sentence it will produce at the counter. If that sentence is one you would not print in a newspaper advertisement, the payment is writing your brand for you, and it will keep doing so until someone in marketing decides to take the pen back.