About ten years ago, advocates of customer centricity rallied around the concept of the "Chief Customer Officer" - that C-suite-empowered senior executive whose job it was to advocate passionately in favor of the customer to internal teams, and break up the product- or channel-centric organizational siloes that kept many companies from thriving. Lacking boardroom support, many of those first-generation CCOs crashed and burned. Now, a decade later, advocates are once again championing the idea - but what makes them think the idea of a CCO will work out better this time?
By Rick Ferguson
The Chief Customer Officer trend perhaps reached its zenith with the 2006 publication of Jean Bliss's book "Chief Customer Officer," which outlined a series of core competencies necessary for a customer-centric business culture to succeed. The idea of a customer advocate within organizations was a noble and necessary one. The only problem: most people who took on that role within their organizations found themselves with ill-defined portfolios, little power to enact their vision or achieve their KPIs, no budgets to support customer-centric initiatives, and facing skepticism from internal stakeholders reluctant to engage in projects that did not directly relate to their annual incentive bonuses.
In short, CEOs appointed Chief Customer Officers, but then did absolutely nothing else that Bliss recommended in her book. Money quote from the CCO Council:
"Despite much success, some of the [CCO] pioneers faced such an uphill battle that they ended up leaving or retiring early. Some were forced out the moment the company's revenues hit a speed bump. Another had a heart attack, retired, and left the field altogether. CCOs have the shortest average tenure in the C-Suite, with an average job tenure of 29 months."
Most of those cashiered CCOs drifted back into more traditional roles, and the CCO concept died a quiet death. Today, however, the role is resurgent once again: in 2015, Bliss published "Chief Customer Officer 2.0," while the CCO council now reports that over 500 CCOs in corporate positions around the world. CCO Council money quote #2:
"The CCO role is evolving into more of a 'Chief Customer Strategy Officer,' focused primarily upon driving profitable customer strategy at all levels of the company with the express goal of acquiring, retaining, and serving the right customers for greater profits. It is no longer a 'nice to have' designation; for many companies it is business critical and primary source of competitive advantage."
A recent article in Forbes by Chris Davis at Russell Reynolds Associates and Alex Kazaks at McKinsey & Company outlines the requirements for success of today's modern CCO. Allow us to summarize:
1. Bring the customer to life: the authors advocate a story-telling approach to customer-centricity, including - horror of horrors - forcing headquarters-bound executives to get out into the field and meet real customers.
2. Reach outside the organization: This suggestion involves inviting customers to participate in innovation, product development, and customer service initiatives - with the caveat that if you invite customers to participate, you'll actually have to listen to what they say.
3. Involve the front lines: Another tried-and-true suggestion, one to which many more companies pay lip service than actually take action. The authors are correct in naming it an essential component of success.
4. Embrace the data: If any requirement has become more mission critical than ever in the preceeding decade, this one is it. Customer data is the lifeblood of the modern organization; without it, the CCO is reduced to holding brainstorming sessions that everyone in your organization will try desparately to skip. Money quote from the authors:
"In the new age of customer centricity, the CCO must create a capability that unites disparate sets of customer data into a master view of every customer. Having a 360-degree view of the customer paves the way for measuring customer satisfaction across all touchpoints along the customer journey, which McKinsey has found is 30 percent more predictive of overall customer satisfaction than for the quality of each individual interaction."While it's important to ensure that your millions of customer interactions in a given day are going well, strong data capabilities should also focus on highlighting problems before they occur, which offers opportunities to deepen customer loyalty."
Amen to that. Another perhaps esoteric debate is whether a Chief Customer Officer and a Chief Experience Officer - a senior executive charged with ensuring a consistent, frictionless, and personalized experience across all physical and digital channels - are really the same thing. Is a focus on the customer experience all that's required of a customer-centric organization? Or are there additional components of customer-centricity - say, relationship management, or working with the CMO to ensure the relevancy of customer communications - that a CCO should also have in her portfolio?
If we may be so bold as to add one additional component of success for today's CCO, it's a focus not solely on the customer experience, but also on the depth and quality of your customer relationships. Many CCOs are measured on traditional sat metrics such as Net Promoter Score, which provide snapshots of customer satisfaction without addressing whether customer-centricity efforts are increasing customer value over time.
In other words: you don't merely want your customers to be more satisfied, and to tell you so. You also want them to buy more, to buy more often, to leave less, and to tell their friends about you. A Chief Customer Officer measured on increasing lifetime customer value, rather than merely increasing customer satisfaction, will be a valuable contributor indeed.
To focus a CCO portfolio on customer relationships, seek customer data and devise metrics to measure the impact of your efforts on driving tangible results in these relationship cornerstones:
Trust: As a result of your efforts, are you more consistently living up to your brand promise? If so, increased trust will fuel retention and advocacy.
Commitment: Are you demonstrating commitment every day to your best customers? Is that commitment felt from the boardroom to the customer service line? If so, customers will respond by consolidating their share of wallet with you.
Reciprocity: Are you providing reward and recognition to your best customers beyond your core product/service offering? If so, your customers will respond with increased yield.
For the CCO to be more than the red-headed stepchild of the organization, she must be measured on KPIs that result in tangible, measurable return on investment. That means listening the the Forbes authors, listening to Jean Bliss, and - most importantly - listening to your best customers.
Rick Ferguson is CMO and Editor in Chief of the Wise Marketer Group.