Business is up. Real money got you there: a faster site, quicker follow-up, maybe a marketing agency finally worth the invoice. But someone still answers the phone, reads the enquiry first, and decides whether to chase a hesitant lead or let it go cold. That person sounds exactly like they did before any of that changed. Ask most owners why. The answer comes fast: I need better people, or I should pay them more. Both assume the problem lives inside the person answering. It doesn’t. It lives inside the deal struck with them, and that deal was never built to reward what growth now asks of it.
Here is the question underneath that one: you want to win more business, so why does it feel like nobody on your team is actually pulling in that direction?
Why nobody on your team pulls in the same direction you do
The people fielding customer contact at a moving, freight, or pet-transport business are almost never the owner. They’re salaried coordinators, hourly staff, sometimes cash-paid crews pulled in for a busy week. None of them personally profit from the gap between a booked job and a missed one. Say a coordinator is paid twenty-two dollars an hour to answer intake calls. They capture none of the marginal revenue when a four-thousand-dollar move books instead of falling through. Whether they chase eight leads that day or eighteen, the paycheck reads identical on Friday. The same holds for a freight dispatcher deciding which lane to push harder on, or a pet-transport coordinator choosing whether to call a nervous client back today or tomorrow. None of them own equity in the business. None of them see a cent of what a stronger quarter is worth to the person who does. A system built to send that person more leads doesn’t raise their pay. It raises their workload, at the same rate, at the end of the same week.
This site has already measured what that produces. Why enquiries go quiet found that 62% of movers don’t reply to a new lead within five minutes, and traced the leak to slow response, missing after-hours coverage, and quotes nobody chases back up. That’s the symptom, measured correctly. It doesn’t ask why a business that genuinely wants the work keeps producing that exact behavior, month after month, regardless of who’s staffing the desk that week.
The honest answer isn’t a training problem. It’s an incentive problem. Once that’s visible, the slow reply stops looking like negligence and starts looking like the predictable output of the system that produced it.
Economists gave this exact gap a name in 1976
Michael Jensen and William Meckling’s 1976 paper in the Journal of Financial Economics, Theory of the Firm, is the founding document of what’s now called agency theory: the study of what happens whenever one person, the principal, hires another, the agent, to act on their behalf, and their interests don’t fully line up. The paper opens by borrowing a warning from Adam Smith: someone managing another person’s money will rarely watch it with the vigilance they’d apply to their own. Fifty years on, the warning describes exactly what happens at a phone desk. The owner is the principal. The person answering is the agent. The agent has no built-in reason to treat a stranger’s enquiry the way the owner would.
Jensen and Meckling also named the resulting waste: agency costs, the sum of three things. The principal’s monitoring spending. The agent’s own spending to reassure the principal. And the residual loss, the value that still disappears because the agent’s choices differ from the ones the owner would make. Most owners already pay for the first kind, in call-monitoring software and mandatory check-ins, without touching the reason any of it is needed in the first place.
This isn’t theoretical. Steven Levitt and Chad Syverson put a number on it in 2008, using a market where the same person plays both roles at different times: real estate agents. Their study in the Review of Economics and Statistics found that homes owned by real estate agents sell for 3.7 percent more than other houses, controlling for observables, and stay on the market 9.5 days longer. The authors’ explanation is an incentive one: an agent selling a client’s house has a reason to push for a fast, cheap sale. When it’s the agent’s own equity on the table, they hold out for a better number. When it’s a client’s, a quicker sale costs them little, because their commission barely moves either way and their own time does.
A phone desk runs the identical arithmetic. Nobody just writes it down. The person capturing that lead well chases it, works the follow-up, and gets the quote out fast, but gets none of the marginal revenue a closed job represents. They get the same paycheck whether the enquiry converts or dies quietly. What they do get, if they push harder and it works, is more of exactly this next week, at the same rate. A system that’s run smoothly for years on this basis looks stable only because nobody has asked it to do more yet. Stability that has never been tested by real growth isn’t evidence the incentives are working. It’s evidence the test hasn’t happened.
Does paying people more actually fix it?
The tempting fix is obvious: pay more, or add a bonus tied to bookings. Alfie Kohn’s 1993 Harvard Business Review piece, Why Incentive Plans Cannot Work, remains the sharpest institutional answer to that instinct, and it isn’t encouraging. Kohn argues that, across studies in laboratories, workplaces and classrooms, rewards succeed at securing one thing only: temporary compliance. They typically undermine the very processes they are meant to enhance.
The counter-case is real too, and an honest piece has to sit with it rather than argue around it. Edward Lazear’s 2000 study in the American Economic Review, Performance Pay and Productivity, followed windshield installers at Safelite Glass after the company switched them from an hourly wage to piece-rate pay. Output per worker rose 44 percent. Profits rose with it. Incentive pay, done right, genuinely works.
The two findings sit together once you look at what made Safelite’s bet succeed. Installing a windshield is a task with one countable output, attributable to one person, with quality easy enough to check on the spot. A phone desk is nothing like that. Persuading a hesitant caller, chasing a quote through three follow-ups, staying warm with someone who isn’t ready yet: none of it reduces to a single number one person can be paid against without inviting corner-cutting. Pay a flat bonus per booked job and watch coordinators start pressuring undecided callers instead of qualifying them properly. The fix that worked on a windshield doesn’t transfer cleanly to a conversation.
The skeptical owner’s real objection belongs here: I’ve hired great people before, and they still don’t chase hard enough. That’s likely true, and it isn’t evidence against any of this. A strong hire dropped into the same unrewarded structure tends to behave like everyone else in it, because the deal, not the person, sets the ceiling on effort. Swapping the person without touching the deal just resets the clock on the same outcome.
The research that does transfer is less comfortable than a bonus scheme. Harvard Business Review’s summary of the service-profit chain work by Heskett, Jones, Loveman, Sasser and Schlesinger describes exemplary service organizations putting frontline workers and customers at the center: investment in people, technology that supports frontline workers, better recruiting and training, and pay linked to performance. Pay is on that list, but as one item among several. The rest decide whether the job can be done well at all. Two things can be true at once, and the honest version of this argument holds both without picking a side: incentive pay can work, and many businesses reaching for it are applying a windshield-shop fix to a job that never resembled one.
The deal never gave the person answering the phone a reason to care whether the business wins more work. It gave them a reason to avoid taking on more of it for the same pay. That isn’t a motivation problem waiting on a pep talk or a better hire. It’s structural, built into the deal itself, and it explains why growth stalls even when an owner genuinely wants it and is doing everything else right.
What happens when nobody fixes it and the market does instead
Businesses that never correct this misalignment can meet a competitor built around it, one where the person closest to the customer carries real exposure to the outcome. Three cases, decades apart and nothing to do with logistics, show who carries that exposure at three different scales. These aren’t stories about a scrappy underdog outworking a comfortable giant, and the causes differ in each. What they share is a question: who had something riding on the outcome, and who didn’t?
A hotel’s front desk clerk earns the same wage whether the room sells or sits empty. An Airbnb host earns nothing unless the listing books. Georgios Zervas, Davide Proserpio, and John Byers measured what Airbnb’s entry did to hotels in Texas: each 10 percent increase in Airbnb listings was associated with a 0.39 percent drop in monthly hotel room revenue, and in Austin, where Airbnb supply was highest, the causal impact on hotel revenue was in the 8 to 10 percent range. The authors credit the effect mainly to supply that could scale instantly to meet demand, which pushed hotels to price less aggressively. They did not test incentives. The incentive contrast is this piece’s reading, not theirs: a clerk’s pay doesn’t move with the room, and a host’s income does.
The same mechanism decided a format war a generation earlier, with nothing to do with picture quality. Michael Cusumano, Yiorgos Mylonadis, and Richard Rosenbloom traced it in the Business History Review in 1992. Sony introduced Betamax in 1975 and JVC introduced VHS in 1976. Beta reached the home market first, but fell behind VHS in market share during 1978 and declined from there, in a market where “bandwagon” effects took years to unfold and were largely shaped by the strategic maneuvering of the VHS producers. The paper is about that maneuvering, not about pay; the link to this piece’s argument is ours. The companies making VHS machines had their own sales riding on VHS winning, and they acted like it.
The starkest version of this mechanism is what happened to New York City’s taxi medallions, and it’s the one that deserves the most care in how it’s told. This isn’t a clean story about an upstart beating a slow incumbent on efficiency. It’s a story about who was exposed to a bet and who wasn’t. The people who ended up carrying much of the loss were the ones with the least control over how the bet got made.
Between 2004 and 2014, the price of an individual taxi medallion at auction rose from $283,300 to $965,000, according to a 2020 notice of claim that New York Attorney General Letitia James served on the city, alleging its Taxi and Limousine Commission ran its auctions in a way that artificially inflated those prices for over a decade. In a Democracy Now interview covering the crisis, New York Times reporter Brian Rosenthal said the city, which sold the medallions, knew the prices were inflated and kept selling, and made more than $855 million from the sales. He said industry leaders made hundreds of millions of dollars more by lending to drivers who wanted to buy, on terms that included no down payment, balloon loans with teaser rates, and interest-only loans. The city was paid at the sale, and the people making the loans were paid for making them.
The drivers who bought the medallions carried what came after. In the same interview, Rosenthal said 91 percent of the city’s taxi drivers were born outside the United States and that many of the people buying medallions did not speak English fluently or fully understand what they were signing up for. When ride-hailing arrived and pulled fares away, medallion prices collapsed. In July 2019, three foreclosed medallions sold at auction for $136,000 to $138,000, according to Crain’s New York Business, against the more than $1 million Rosenthal said medallions had reached by 2014. Weeks before that sale, the interview reported that at least eight drivers, including three medallion owners, had died by suicide since the start of 2018, and that at least some had linked their decision to their debt.
This deserves to be said plainly: none of it should read as a tidy lesson about disruption rewarding the efficient. It’s a story about a bet whose losses fell hardest on the people with the least say in how it was set, while those who set the terms were paid at the sale. It is a harsher version of the question the phone desk raises: who is exposed when the bet goes wrong, and who set the terms? It deserves to be remembered as exactly that, not filed away as a punchy statistic about an app beating a taxi.
The alternative to waiting for a competitor to fix this for you
The hotel and taxi examples share something worth naming plainly. The disruption fell on incumbents, and in the taxi case it fell hardest on owner-drivers rather than on the people who ran the system. That’s the version of this story most operators fear, and they’re right to. It doesn’t have to be the only one available. The partnership structure behind Movaros’s own fulfilment page exists for a different reason: a smaller operator plugs into a network with real demand behind it and grows because of the arrangement, instead of waiting to see which competitor solves this incentive problem first and takes the market while everyone else is still hoping a pep talk works.
Run this test before the next growth push
Every fix described so far corrects a structure, not a person. Before reaching for a new hire, a script, or a bonus plan, run a smaller test first. Picture the business landing 20 percent more qualified work next month than it has today. Now picture the specific person who answers the phone or opens the first enquiry each morning. Would that person be better off with a bigger share of the extra revenue, more authority to make a call without checking with someone else, a clearer stake in whether the extra work turns into extra pay? Or would they just be busier, doing the identical job, for the identical rate, with more calls left unanswered by closing time?
The honest answer explains more about a slow reply, an unchased quote, or a caller who never gets a real answer than any story about a lazy hire does. The fix was never a better person. It’s building the one thing the phone desk has never had: a reason to want the growth as much as the owner does.
The incentive gap doesn’t fix itself with a better hire.
See how a fulfilment partnership gives the person doing the work a real stake in whether it’s won, not just a bigger workload for the same pay.
