Our companies abound with “CXOs”: the CEO, the COO, the CFO, the CMO, the CIO. But what about the CCO, the Chief Customer Officer. The person who s accountable for the “Customer” in the business. Does your business have a CCO? Is your CEO the CCO? In most businesses there is an operations director, a customer services director. In some now there is even a customer experience director. This is particularly true in financial services
in the UK. The regulatory body, the Financial Services Authority (FSA) is enforcing something called “TCF” or Treating Customers Fairly. Its intent is extensive. To change not only the reporting but also the culture and executive responsibility for the way customers are treated by financial services companies. But is the need for a Customer Experience Director in itself missing the point. The point that everyone should be championing the customers’ cause. Everyone should be a CCO. There should be an army of CCOs in every business.
For example take this organisation chart from Starbucks. There’s the customer and then there’s every employee. If only this were true in real companies we would not need a CCO.
In practice, the organisation chart looks very different. There are many layers of management above the employees who talk and deal with customers. Many staff who do not talk to customers but who have responsibilities, targets, accountabilities and obligations to shareholders. The further up the organisation, the greater the perceived shareholder pressure. And the lower the perceived customer pressure. It is tempting to look at the customer vs the shareholder as the debate or the balance to be achieved. But what if they are not opposite ends of a seesaw. But the same thing. What if we can get more value by getting both shareholders and customers to the same end of the seesaw rather than just getting a balance between their needs.
At the heart of the challenge, of the see saw, one needs to look at the time frames that the shareholders and customers use. The very short term. The very long term. The two parties both want the same thing – to maximise the value they get from the transactions between them. But the customers’ view of value is frequently wider, longer and more complex than the shareholders’ view.
When it comes to buying insurance, customers seldom forget how they were treated on a claim 10 years before. When their business bank is trying to sell pensions to their company, customers do not separate the bank from a poor experience of trying to replace a stolen credit card on their personal account. When offered free internet by their phone company, customers can turn the offer down because they have wasted so much time sorting out their mobile bills. Yet businesses continue to play the short term game. To incentivise customers to buy with offers that they fund from marketing and sales budgets. Offers to stay, to buy more, to recruit their friends. Offers for better functionality, better prices, free add ons, special treatment. Companies need to make sales targets each month, each quarter, regardless of external changes. These are all legitimate things to do. But so much more expensive or so much less expensive depending on whether the customers concerned are emotionally on your side or not. So much harder or easier to meet targets depending on what your customers have experienced from your company before. So much harder or easier to execute on plans if the staff who talk to customers are on side or not. We know these things to be true.
But in business we “need” things we can measure. True representations of how customers behave are very hard to measure. Results are in reality based on complex interactions. Based on emotions which change rapidly. Much harder to measure than actual sales volumes, costs or profits. So how can a CCO compete with a CFO who can measure numbers in columns? How can he compete with the CMOs sales figures? The answer is it’s very hard. But it’s started to happen. Many companies now take simplified customer measures into account. Customer satisfaction. Likelihood to recommend. None are perfect but they are bringing the customer into the board room. Over time the most advanced companies are linking these measures together and correlating them with internal quality measurements and external commercial figures. It isn’t easy to do. But some companies now believe they can say what a percentage point on a customer scorecard is worth to the bottom line.
The further battleground for these more advanced companies is how to change these scores. How to change the real commercial results through doing things that customers like. Yes, better experiences. But not at any price. In most cases the relationship between experiences, satisfaction, researched statements and actual buying behaviour are far from linear. And not the same for each industry or business within it.
A major shift is happening. From measuring to understand what’s happening with customers, to simply listening to customers to know what to do. And next to listening to customers in importance is listening to front line staff. So what is the role of the CCO? To get the arguments into the boardroom? To get the customer measures in place? Yes but there’s something bigger. The true CCO is the voice of the customer and the voice of the front line staff who know what customers know. The CCO’s job is deeper than measurement or argument. The job is to get the business to take decisions based on what the customer knows about your business. Frustrations, competition, opportunities. And when this happens shareholder results change. Markedly. Not by small amounts.
