It may be argued that the role of the CEO of an organization is to preside over its growth and ongoing success. My simplistic view of the world leads me to conclude that, acquisitions aside, organic growth really comes only from three possible sources: keeping our current customers as long as we can, so they continue to buy from us and to recommend us to their friends; selling more to those customers and, so, increasing our share of their wallets; and attracting new customers, in part based on our reputation for delivering value. In all cases, we are talking increasingly about customer-led growth.
The role of the CEO is to manage customer-led growth, ensuring that appropriate investments are made in the customer, not leaving it to individual departments to manage the firm’s interactions with its customers, both existing and prospective. Sadly, some companies continue to operate as if marketing, customer service and sales departments are individual silos, each with certain responsibilities for customer growth. I recently discussed customer strategy with a company in which those three departments independently prepare annual plans and budgets.
What results in such a situation, of course, is a series of disjointed, unconnected touch-points, contributing to high levels of customer frustration and defection, rather than a coordinated holistic approach to the customer. The first step in building a customer strategy is to ensure that all departments have a consistent, coordinated view of the customer. That’s where the CEO comes in.
‘The payoffs include lower employee turnover and high customer satisfaction scores.’
I suggest that the most important role of the CEO today, in this age of customer centricity, is to ensure the delivery of meaningful customer experiences and the successful execution of the brand promise. To play that role, the CEO must create an understanding within the organization of the importance of the brand or reputation of the firm and of the factors that contribute to an attractive brand image.
The customer experience is an integral component of what constitutes the brand. For the most part, companies today take a holistic view of the brand: It is everything that has the potential to affect how customers view the company and the regard in which it and its products and services are held. Despite the recent focus on branded customer experiences—the notion that some companies are able to create customer experiences that are unique to their brand (Disney and Starbucks come to mind, as they always do)—I am of the opinion that every interaction between the company and its customers constitutes an experience that has the potential to enhance or destroy a brand.
My recent blog on the “tripping point” provides some examples of seemingly ordinary customer interactions that went wrong and damaged the reputation of the company and the likelihood of customers returning.
Customers and employees
Customer-centric CEOs understand that the customer experience is inextricably linked to the employee experience; that how the employee is treated connects directly to how customers are treated—their experience—and that both contribute to how customers see the company and the regard in which it is held—the brand.
The CEO’s office is where it all comes together. This is where a comprehensive, holistic view of customer experience, employee experience and brand comes together. In a study that CustomerThink’s Bob Thompson and I collaborated on a few years ago, we looked at those companies whose customer relationships were strongest, as determined through a survey of several thousand CRMGuru (now CustomerThink) members. Across five business sectors (airlines, banking, computers, supermarkets and hotels), brands including Southwest, HSBC, Dell, Costco and Accor came “top of the table” in terms of the strength of the relationships they enjoy with their customers.
As we studied how these companies and strong competitors like Royal Bank of Canada, Hyatt, HP, Publix and Lufthansa have achieved their enviable position vis-à-vis their customers, it became obvious that one of the most important distinguishing factors was that they are led by CEOs who are passionate about people, both customers and employees. And they get the connection and the fact that customers and employees come together at the point of customer experience.
I’m reminded of a quote from Costco CEO Jim Sinegal, whose commitment is to paying his employees well by retailing standards. As he explains, his employees “are entitled to buy homes and live in reasonably nice neighborhoods and send their children to school.” By treating his employees well, Sinegal creates a culture of respect. The payoffs include lower employee turnover and high customer satisfaction scores. The best CEOs, from a customer strategy perspective, have an abiding interest in, and passion for, the customer and an innate understanding of the factors that drive customer loyalty. One of the distinguishing features of the most successful companies in our survey was that they spend a larger amount on employee training than do their competitors.
I come back to my earlier point that CEOs must avoid situations where departments are allowed to act independently on matters that affect customers, both directly, as in sales and customer service, and indirectly, as in human resources.
Most decisions that companies make are customer decisions. Whether to open a customer contact center in Des Moines certainly is a customer decision, as is whether to raise prices 10 percent to cover rising costs. But so, too, is the decision to cut back on sales training or to replace the fleet of service vehicles after seven years rather than five. I did a series of customer insight sessions a couple of years ago for a retail client when female customers railed against the company’s use of single-ply toilet tissue in its washrooms. Since when is the decision on toilet paper quality a “marketing” or consumer decision? In most companies it isn’t, but it certainly had an impact on customers’ perception of the client’s brand.
The point is that virtually everything a company does has the potential to affect customers’ regard for its brand, and the most important activities are those that influence the customer’s experience in dealing with the company. Successful CEOs know this and ensure that their companies have a single-minded view of the customer, one that ensures consistency of approach in delivering effective and meaningful customer experiences.