A Chief Customer Officer is successful when he or she can simplify how the organization works together to achieve customer-driven growth, engage the leadership team and connect the work to a return on investment. Sustainable transformation will only occur when this work goes beyond project plans and status updates, and is grounded in caring about customers’ lives.
Most CEO’s no longer need to be convinced of the importance of retaining customers and developing relationships with customers. What’s on their mind is how to accomplish this feat inside their organizations.
Throwing head count at the customer challenge is not necessarily the automatic solution. This should not be an automatic or easy decision.
Understand the Work of the Chief Customer Officer
The key to making the decision if you need a Chief Customer Officer lies in first understanding what the work encompasses. Before you rush out and hire a CCO, take stock of where the company is culturally and decide if the time is right to bring someone in to make the big customer push.
Whatever you decide, driving customer profitability isn’t going to be a walk in the park. Is it realistic in your organization to divide and conquer these tasks? If you can, your organization is well adjusted. Having the operational areas own the responsibility and having them share the administrative parts of this work would be heaven. But I haven’t seen many evolved companies that are ready for this. It’s the pushing and prodding part of the work that most companies need someone to spearhead. That becomes the role of the Chief Customer Officer.
Are Customer Focused Actions Embedded in Your Organization?
Can you answer yes to these statements? (Don’t answer them too quickly.) Stew over them. Debate them with top leadership and board.
1. There is someone in our company who clarifies what we are to accomplish with customers.
2. There is a clear process to drive alignment for what will be accomplished.
3. We have a road map for the customer work and know where progress will be measured.
4. Clear metrics exist for measuring progress which everyone agrees to use.
5. There is real clarity of everyone’s roles and responsibilities.
6. People really participate and care about the customer work.
7. Appropriate resources are allocated to make a real difference to customers.
8. There is an understandable process for people to work together.
9. The work is considered attainable.
10. A process exists for marketing achievements to customers and internally.
11. Recognition and reward are wired to motivate customer work.
Then take a reality check:
- Is anyone taking these actions?
- Is anyone even thinking about them?
- Does anyone have the time to?
Gain Consensus in the CCO Role
If you decide to proceed with a Chief Customer Officer exploration, make sure that you have consensus to go ahead with the role. The people whose sandbox the CCO will be in need to be open to the upheavals and discomfort of change. Think hard about your appetite and aptitude for the work. This is, at minimum, a five-year journey. Pace yourself.
Read More: Structuring the Chief Customer Officer Role and Team
There are four ways you can go with organizational structure:
1. Staff leader with dedicated team
2. Staff leader with dispersed team
3. Line leader with dedicated team
4. Line leader with dispersed team
We’re in complete agreement here. Writing about this role myself (and citing your pathfinding work in identifying the valuable role of a CCO for any organization), I’d stated: “In studies, articles and reports addressing how organizations build customer focus and customer passion, Forrester has identified that the CCO, serving at a senior corporate level, has (as reported by Paul Hagen of Forrester on the HBR Blog Network) “…the mandate and power to design, orchestrate, and improve customer experiences across the ever-more-complex range of customer interactions.” The function now exists in companies as varied as Dunkin’ Brands, USAA, Philips Electronics, FedEx, The Cleveland Clinic, Allstate, and SAP. And, where there is a CCO in place and working with other C-suite executives, the authority and scope associated with the position has direct influence over corporate customer experience priorities and application of resources.”
From my perspective, and without getting into detail, there are five core areas of functional responsibility for an effective CCO. They are:
1. Customer Experience and Lifetime Value Optimization
2. Customer Insight, Data and Action Generation
3. Customer Relationship-Building
4. Customer Journey Management and Life Cycle Strategic Consultation
5. Customer-Centric Culture Leadership and Liaison
Another key area where you and I strongly agree is on what makes the function and role viable within an enterprise. One survival factor that is, or will become, common to the continuity, scope, and authority of the CCO is the ability to demonstrate direct impact on revenue – acquiring attractive new customers, driving customer loyalty behavior throughout the life cycle (including reduced churn and more proactive complaint management), and lowering customer management costs. From the organizational side, and again quoting Paul Hagen, what C-suite executives should do to make the CCO position optimally effective is establish “…a strategic mandate to differentiate based on customer experience, a portfolio of successful projects that create buy-in and a cultural maturity in the organization, and a uniform understanding on the executive management team for what the position can accomplish.”
Any organization looking to become more customer-centrtic should, and will, be able to answer the three key reality check questions you posed. In my consulting and corporate experience, few companies are able to do that. and, within the enterprise, advance the customer-focused actions you’ve identified.
This is a tough question. I think the answer is “It depends”. And it depends on whether the business is getting the benefits of being customer-centric or not. Are you getting a high number of qualified referrals? Do you have verbal Advocates touting your brand in all the right places? When you walk a trade show do people see your company name on yur badge and rush to tell you about a great experience they had? Is your revenue base “secure? If you answer yes to these questions then you don’t need a CCO.
However, if all your company is doing is surveying customers after then call the call center then you need help and the answer is probably. The equivocation is because the success of a new COO depends on the company culture and that is an internal assessment.
Hi Jeanne
Thanks for a very useful article.
Although there has been a recent surge in the CMO job title being dropped and replaced by the CCO or CExO, that doesn’t mean that all companies need a CCO (or CExO). The well-established Delta Model reminds us that companies typically compete on the basis of having the lowest costs, the best products or the strongest relationships with customers. If you compete on relationships with customers, a CCO may be a good idea (that needs to be carefully evaluated). However, as research by Rust et al on ‘Getting Return on Quality: Revenue Expansion, Cost Reduction, or Both?’ suggests, if you compete on the lowest costs or the best products, a CCO may not only be unnecessary but also may be a costly strategic distraction.
There is more than on sway to skin the metaphorical cat. We shouldn’t get carried away with the (still unproven) idea that a CCO is always the answer, irrespective of the strategic question.
Graham Hill
@grahamhill
Graham
Thank you for making this point. The reason why I write my books is to provide a proven methodology to transformation. There is no one size fits all to how to implement.
The title is less important than the skill set of the person leading, a united and engaged leadership team and determining how to break the work down for the culture and operation of the business.
Graham thank you for making this point. Clearly many CMOs are posed to take on this work if the conditions for success met above can be met.
As you mention we should not treat this as a shiny object but rather a set of actions with multiple options for success.
Happy Nee Year!
Jeanne
Sam
I’ve given that “it depends” answer also many times as an answer to that question. This is not a “pat” solution nor a “shiny object” role to put into place.
The culture, timing and leadership team has to be right. In fact, I put a set of conditions required for CCO success with a leadership team together in my book, Chief Customer Officer 2.0 to ensure that the role is put into place only when it can be successful.
These roles flame out when the conditions for success are not considered, or when the leaders lop the work of customer focus over to these given roles.
Happy new Year!
J
Michael
Thanks for pointing out the fact that many leaders don’t do the work ahead of placing these roles to evaluate their success. The roles for the CCO you outline are very much in sync with the way I lived the role for 25 years and coach folks now in it.
I’m glad we have so many of us talking about this role and making it more understood so leaders understand that their behaviors and the way they lead must change. It’s not about putting someone in the role then walking away.
We need to band together and continue to create awareness of the work – not that the initial focus is on the role. But rather understanding and committing to the work required to transform – and then determining the right approach.
Happy New Year Mike!
Jeanne