I just got back from speaking at a conference where I met with many CMOs of the worlds’ largest companies. Customer experience is a priority to all.
The question we discussed was; could the discipline and competencies required to lead a company through a customer experience transformation be led from marketing, by the CMO?
The answer is “yes, however…”
The reason for this answer is because Customer experience is a shift in how a company will and will not grow. It affects leadership, operations, how people are hired, and how the company goes to market.
There are many successful CMOs who take on the dual role of change agent inside the organization to transform the business – essentially the CCO duties. Pacific Gas & Electric’s Laurie Giammona is both the CCO and CMO. At Walgreen’s Graham Atkinson held both roles, as does Heather Carroll Cox at Citi.
What these leaders did to be successful was to deliberately expand their skill set, the knowledge of their teams and their reach beyond traditional marketing tasks of brand building and shaping. They reached within the organization to do the following:
- Establish relationships with leaders across the organization
- Translate the brand to operationally relevant actions aligned to the customer journey
- United leaders in changing behavior, language and how they hold people accountable
- Became operationally relevant and facilitated change
When the CMO is also the CCO their personal skill set must expand to include skills that may not be organic to marketing leadership skills traditionally developed. That is why the answer to that question above is “yes, however…”
The expansion of the CMO and their teams needs to expand to include:
Beyond these skills what we find is that the most effective CMO/CCO leaders are deeply engrained in the operation and frequently run a portion of the operation. This gives them their relevance and ability to scale the work across the organization – and the credibility as they work across the leadership team to make change to the operation. If you haven’t lived the work to run the operation, there can be some resistance as many have experienced.
With increasing clarity, the role of the CCO is being understood as a C-Suite partner working with the leadership team to enable decisions and operational execution of an experience that earns customer-driven growth. As more CMOs seek to solidify their role in this important work, they will need to expand their skill set and that of their teams to ensure their place as leaders of their company’s customer experience transformation.
For more information on the role of the CCO, please visit http://www.customerbliss.com
This is the perfect description of the skillset required for a CMO to also successfully function as a CXO or CCO. I’d suggest that, in addition, the CCO’s effectiveness depends upon the degree of customer-centricity within the company’s culture, strategy. data systems, employee orientation, and processes. Beyond the leader’s skills, for example, it will be more challenging for a CMO to undertake or execute customer-focused initiatives if the enterprise is highly product-centric or sales-centric. So, I’d definitely agree that the answer to the question you’ve posed is “Yes, however………” or the word I’ve made up to cover situations such as this: “Yeahbut”.
Hi Michael,
Couldn’t agree more! I refer to what you mention above as the “Power Core” and it is always an evaluation we do at the beginning of a transformation. The strength of the Power Core and distance in core skill sets from being customer centric has everything to do with the difficulty of the work ahead, who needs to be engaged with to move work forward (dance with the Power Core :)) and how to take the first actions to prove the work.
Great minds, right?
J
Great question, probably THE question for a modern CMO looking for the right relevance inside the strategic environment of the company.
In my opinion, the answer is “Yes, no doubt!”, because Marketing is nothing but the entire company seen form the customer perpective (cit. Peter Drucker).
Jeanne,
I completely agree. In fact, that is how my role here at Satmetrix has evolved. I now hold both roles as CMO and CCO.
If we believe that retention is the new marketing, and that the brand is defined by the customer experience it’s a natural place for the CMO to invest their efforts. By understanding the brand experience of customers and what creates promoters, they can focus acquisition strategies on attracting the RIGHT customers, not just any customer. They can also monitor the gap between the brand promise and the brand experience, because in a world of social media false claims are easily exposed. And most importantly, as you create promoters, they are your best marketing engine as customers increasingly look to others for recommendation.
Great conversation starter!
Even given the overwhelming evidence that retained customers are worth more than new customers, a set of facts which can also often apply to recovered customers as well, the notion that “retention is the new marketing” needs to be challenged.
Customer retention, which I’ve been writing about, consulting, coaching, and researching for over twenty years is a very macro concept. It focuses on techniques involved in barriers to exit, methods applied for keeping the best and most profitable customers within the base. Twenty-first century approaches and marketplace realities have moved us beyond an emphasis on retention. Ever since Peppers and Rogers first looked at ‘the one-to-one future’, we have been focused on the granular and optimized delivery of value, customer by customer; and that is why experience has received so much attention.
In his classic textbook, Marketing Management, Professor Philip Kotler defined marketing this useful and straightforward way: “Marketing is getting the right goods and services to the right people at the right places at the right time at the right price with the right communication.” It also brings brand positioning, as well as reputation and image through trust-building, actively into the discussion of perceived value. That’s not new, or old. It’s fundamental to creating customer loyalty and advocacy, as well as micro, and holds up pretty well.
Jeanne,
I too examined this and published a two part blog a few months ago.
http://engagecustomer.com/organising-for-customer-focus/
http://engagecustomer.com/organising-for-customer-focus-2/
In summary and as you say, who leads it is less important then what they do. My favourite definition of leadership says “I cannot hear your words for the actions that thunder above your head.” (Henry David Thoreaux) It is the doing the right stuff that truly defines a good leader, not their title.
Dj
Hi Jeanne
A very thoughtful article.
My experience working with CMOs in large banks, telcos and airlines suggest that, for a variety of reasons, they do not always possess all of the core traits you describe. And as Michael has discussed at length in numerous posts and comments, they are often not centred on customers at all. One national bank CMO I worked with ate, drank and slept ATL marketing, despite all the evidence suggesting that customers were more influenced by digital and social marketing. She was an ex-ad agency staffer and she wasn’t going to let the inconvenient truth about customers’ changing behaviour influence her ‘vision’ for marketing.
As if that were not bad enough, recent evidence suggests that CMOs are loosing both tenure on the Board and longevity in companies. The CMO is the CXO with one of the shortest average lifetime – around 48 months – in companies today. That makes me question whether CMOs are really the right people to become CCOs.
I wish it were different. But it isn’t.
Graham Hill
@grahamhill
Hi Michael
You are premature in writing off retention so quickly.
Peter Drucker famously said, ‘Because the purpose of business is to create and keep a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.’ Drucker ignored the elephant in the room; profit. His working assumption seems to have been if a company can keep enough customers for long enough it will automatically be profitable. If only life were that simple.
The reality is that most customers never reach the emotional nirvana of becoming loyal to a company. They stay because it makes sense to do so. Because it is more hassle searching for an alternative and switching to it than staying. In other words, they are economically retained as customers. In a bounded rationality sort of way. With retained customers greatly outnumbering loyal ones, any company that doesn’t focus on retaining customers will very quickly find its acquisition costs climbing through the roof. That means understanding what keeps customers retained and what tips them over so that they are either pushed or jump to competitors, and then doing just enough to retain them. It might also mean running the retention, save and win back campaigns that you so evidently dislike.
It might seem tempting to divert resources away from retention to loyalty activities, sadly, the reality is that most companies have very little differentiation over each other, are not in the loyalty market and thus, doing so would be a very expensive road to corporate oblivion.
Retention is dead. Long live retention!
Graham Hill
@grahamhill
I think Jeanne’s “yes but it depend on the skills of the individual” is exactly right.
I would add it also depends on the company and what is expected of the CMO. The CMO can have the right skills, but if the job is set up mainly as brand building or lead gen, then those skills won’t get put to use.
In a recent survey I asked which executive in their company had “overall responsibility for the health of customer relationships.”
No one position garnered more than 30% of the responses. There was a slight tendency for those in the Leader segment to point to the CEO (27%), CCO (8%), or Sales (15%) compared to those in the Laggard segment.
Conversely, Laggards were more likely to cite “none” (28%), marketing (10%) or service (10%) — marginally higher in each case than Leader companies.
What this suggests is that “who is in charge” is not a significant performance differentiator. Rather, it is what executives DO that matters most.
So while putting the CMO in charge of customers is not a strategy I’d want to bet on (same goes with sales or service), it certainly can work depending on the individual and their situation (e.g. how the CMO job is defined).
Hi Deb,
You are a perfect example of the CMO / CCO combination. Thanks so much for jumping in. The skills and operational relevance you have are key to driving transformation, combined with your already developed skill set in marketing.
I am glad we are having this conversation as we all need to stand on each others’ shoulders to continue to define and acceptance gained for these cross-company roles.
Jeanne
Daniel,
The opportunity for the CMO is to link arms across the operation and then expand skill sets to be able to lead the broad change that is required in a business transformation.
Jeanne
Thanks Bob for your note of clarification. Absolutely agree…it also “depends” on the company and leadership and their understanding of this work.
As many know too well, customer experience can often be assigned to an individual. Leaders don’t realize its a total leadership team commitment to make the changes in their behavior that will drive changes in the company behavior and growth.
There is still so much seeking of silver bullets in this work – its’ important to establish with clarity what this role entails and make sure that people are prepared with the skills to be able to really lead a business transformation.
J
David,
Agree with you. However we find that clarity in what the actions need to be with this work are very important to be level set with the leadership team, for the following:
a. The company to be ready to accept the changes to come
b. The person to be successful in uniting the leadership team
c. The company members to recognize real action not lip service
d. For customers to see the difference.
J
I think the answer to Jeanne’s question has more to do with goal alignment and conflict of interest than skills. In some companies, the CCO (if there is one) and CMO can co-exist in the same person. But in other organizations, where CCO is concerned with customer advocacy issues, a CCO/CMO combo-person would be required to make unhappy trade-offs. If the individual can walk the tightrope that comes with the job, does that make him or her a superhero? Maybe.
A related example: When I served on the executive advisory board for a major grocery retailer, the quality function was deliberately separated from operations. The rationale was that QA was a safety and compliance concern, and the company did not want store operations conflicted over whether to make investments in plant and equipment when those investments could reduce their profitability.
What would a CMO tasked with revenue growth decide to do when allocating budget for inbound lead generation versus installed customer support? Would price increases be implemented ethically and fairly? Would compensation and bonus plans create dissonance and opposing incentives? (e.g. bonus based on revenue or new account growth)
Andrew
This is a great point that you make. What you are illuminating is the evolution of the CMO role goals and objectives that must occur for this role to be congruent within the marketing function.
It is simply not always possible to have all of these skills reside in one person…especially as these roles are in play and being defined. The traditional metrics of the CMO are not always automatically in sync with the CCO objectives.
Great point!
J
Interesting write up here. Marketing is key in any business undertaking. We should be able to satisfy and even go beyond customers’ satisfaction.
Good customer service is the main stay of any business.
You can offer promotions and slash prices to bring in as many new customers as you want, but unless you can get some of these customers to come back, your business won’t be profitable for too long.
Good customer service is important because it ultimately ensures the continuity and upward consistent growth of the business. ‘
The customer is King’ hence the customer invariably determines the state of the business.
Treating the customer right is ensuring that your business forges ahead.
The backbone of every business is the level of customer service they offer to every potential customer. Sales and promotions may bring new clients/customers in once, but the key to a viable and profitable business is to keep these new customers coming back.
Long term success relies on the repeat business and on the recommendations of those repeat customers.
The essence of good customer service is forming a relationship with customers- a relationship the customer will like to pursue, remembering the secret of good customer service; ‘You will be judged by what you do and not what you say’. The challenge today is not just serving customers…
• It’s understanding customers
• It’s being prepared to serve customers
• It’s helping an angry customer immediately
• It’s listening to customers
• It’s being responsible for your actions when a customer calls
• It’s living up to your commitments
• It’s being memorable
• It’s surprising customers
• It’s striving to keep customers for life…creating “loyal” fans
• It’s getting unsolicited referrals from customers…regularly
What customers represent:
Turnover for business
Salary and wages for workers
Profit for an organisation
Dividend for shareholders
Tax for government
The customer is the source of life
Pareto Principle:
The Pareto principle states that;
In any given situation,80% of the result/output will be directly contributed by 20% of the effort/input
Translated in the ‘’Best Customer’’ scenario ,only 20% of your current customer base delivers about 80% of your business returns.
It stands to reason then that it is this core of people that must be retained and fenced from competitive offerings at all costs.
Hi Joseph
Bill Price, the former VP of Global Customer Service at Amazon wrote a very good book entitled ‘The Best Service is No Service’. The gist of the book is if the product is so good that the customer never has a problems with it and the experience using it is so good that the customer never needs any help, that this is much better than having to go to customer service for help. In other words, the best service is never needing any. Ever!
If Bill is right, and he should know, surely it cannot be correct when you say ‘Good customer service is important because it ultimately ensures the continuity and upward consistent growth of the business’ or ‘The backbone of every business is the level of customer service they offer to every potential customer’.
Is Bill right? Or are you right? You both can’t be right!
Graham Hill
@grahamhill
There is no way an organization will forget about customer service.Whether the product is good or bad customer service can not be discarded.It is an on going thing.It depends on the angle Bill is looking at it and hence he may be right.I still stand on the fact that customer service is key.
Hi all. Bill Price is a friend as well as an esteemed contributor here on CustomerThink. I’d love for Bob Thompson to invite him in on this conversation. However for the time being here’s my insight on what I believe Bill means by “no service is the best sevice.” In simple terms: take care of your customer so they don’t have to contact service for help navigating out of difficult situations. Be proactive. Create a problem-free experience. Most calls to “customer service” are because customers have hit a wall and need help. If instead we architect experiences where customers don’t have interruptions, the need for those service calls and contacts will diminish.
My two cents.
Thanks all for this fantastic conversation!
Jeanne
Jeanne,Thanks for this clarification.I appreciate.