Let’s face it! Organisations that focus on building short-term and long term customer value significantly improve the sustainability of their business performance.
Many organisations ‘wax lyrical’ about their undying customer focus and their customer centric organisational structure and culture designed to deliver a unique and differentiated customer experience. In some, albeit few, organisations this is true. In others, partly true and in the majority, this is little more than an erotic dream in ‘cloud cuckoo’ land. Research has shown that up to 5 times as many executives believe they and their companies are customer centric relative to the number of customers who agree. Talk about different perspectives!
Desired Capabilities:
We’d be hard pressed to find an organisation that publicly states that it has no desire to be customer centric. Whilst I’m sufficiently open-minded to recognise that certain organisations in certain industries may derive no benefit from building customer centric capability I admit that I cannot share an example there-of – I honestly don’t know of one. Clearly, there is a business argument that will support the fact that certain organisations in certain industries across differing geographies require differing levels of customer centric capability. The challenge is in defining what level of customer centric capability is required and building the plan that’ll get us there, within the defined time horizon.
The role:
So what is the role of the Chief Customer Officer? Primarily, this is the individual who is ultimately responsible for customer governance. It is this individual who is accountable for maintaining and enhancing the value of the customer base through an understanding of the current market place and future trends, such that strategy informs organisational change and actions necessary for servicing customers profitably. It is the individual responsible for the design and delivery of customer experience across all customer touchpoints. It is the individual responsible for aligning and integrating customer input, marketing, sales and service.
The Outputs:
This position is, first and foremost, about improving business performance.
It’s about building enterprise wide customer capability improvement and execution abilities in all the identified practices across a leading Customer Management Capability Indicator such as the CMAT™ model of Customer Management.
The CMAT™ Model of Customer Management
It’s about gathering customer insight and integrating it across channels and product development. It’s about business process re-engineering such that the organisation becomes easier to do business with. It’s about building a unified customer driven culture. It’s about injecting a customer balance into executive decision making such that traditional focus on revenue growth and cost containment don’t result in damaged customer relationships and diminished long term results. It’s about creating a 360˚ view of the customer through needs based dialogue, new customer acquisition, cross-selling and up-selling existing ones, improving customer satisfaction and loyalty indicators and, of course, retention.
Measurements:
The challenge is in agreeing to a set of well balanced and meaningful measures representative of both business performance and customer centric capability.
CMAT™ is a leading indicator (indicative of current and there-after on-going improvement in cross functional customer centric capability.) The CMAT™ measure should be supported by a Customer Satisfaction index (CSI,) a loyalty index (NPS,) an Employee Engagement Index (measuring the level of understanding of a customer centric philosophy and strategy & the level of engagement/agreement with the philosophy) and an Employee Satisfaction Index.
Business Performance measures should be crafted around a set of Customer Value drivers such as REAP (Retention, Efficiency (Cost-to-serve understanding,) Acquisition and Penetration (cross-sell and up-sell)
In Closing:
According to analysis from the Chief Customer Officer Council the Chief Customer Officer position has enjoyed an overall average growth rate of 41% since 2000. It is absolutely essential that the CCO role has the unequivocal support of the CEO. It is a strategic position with the responsibility to improve upon any process that impacts the customer. To do that requires ‘organisational permission’ and support to perform the integration function.
Sources: Chief Customer Officer – Jeanne Bliss; 1to1 Media; REAP Consulting (Pty) Ltd; Chief Customer Officer Council.
Filed under: 21st Century Organisation, Best Practice, Business Models, Change Management, Competitive Advantage, Cost to Serve, CRM Models, Cross-sell, Customer Acquisition, Customer Centricity, Customer Experience, customer management, Customer Relationship Management, Customer Retention, Customer Strategy, Frameworks, Innovation, Leadership, Measurement, Sustainable Business Performance, Uncategorized, Upsell |
Doug Leather's Blog 
Hi Doug! Very thoughtful post on the role of the CCO, thanks for providing a lot of grist around getting at metrics and factual information to make this position more than corporate overhead.
I took advantage of your blog to reference it and comment on it in my blog as well:
http://oughtobeconsulting.blogspot.com/2011/03/chief-customer-officer-essential-or.html
You may find my point-of -view of interest. Craig Norris
Hi Craig – thanks for your comment and reference to your blog. For context I’d like to define Customer Management/Centricity as being the business system/operating model that enables the organisation to design and deliver a unique and differentiated customer experience for business benefit. Let’s define customer experience as being a blend between the quality of the product/service/communication and very importantly, the emotions evoked before, during and after engaging with the organisation across any chosen touchpoint in any channel.
As you say/imply – silo based mentalities/operations are the ‘nail in the coffin’ for any organisation attempting to be customer centric. Without cross functional alignment and collaboration no organisation will be able to deliver a consistent customer experience, period. The challenge is to create/force cross functional alignment around the strategic theme (customer centricity) in order to benefit from this approach. I do agree that very often Marketing is the most appropriate ‘functional’ owner of Customer Management/Centricity, but only if customer centric insight/passion resides there. We cannot assume that Brand ownership is the same as Customer ownership. In one case I’ve worked with a company where Customer Management ownership resided with the CIO – he was the most knowledgeable and passionate around the overarching philosophy and best positioned to drive the programme. Clearly, the ultimate goal is to evolve ‘the programme’ into business as usual. In some organisations this may be best done by appointing a CCO. It may not be necessary to mainain that position for ever (with reference to your comment about unneccessary overhead.) The real issue is to have an appropriate individual able to drive the change process.