Does Your Company Really Need a Chief Customer Officer?

By Jennifer LeClaire, News Factor Network

Good Question. Curtis Bingham, founder and executive director of the Chief Customer Officer Council, has a good answer: Yes. As Bingham sees it, the question really isn’t whether or not you need a CCO but when you need a CCO.

In a recent article, Bingham explained that the role of CCOs — those focused on the customer experience, customer engagement and customer loyalty — has matured, and competition has increased to the point that he is convinced every company needs one.

With that in mind, he offers six criteria to determine when to make the investment. Let’s take a brief look at each criteria Bingham offers:

1. Is There an Appetite at the Top for Customer Centricity?

Bingham has seen CCOs hired because it was the “right thing to do” or “competitors are doing it, so we have to.” Essentially, that’s setting up CCOs for a miserable failure.

“The moment the company hits a revenue road bump the CCO is asked to leave. The average tenure of the CCO is a mere 29.4 months, the lowest of any member of the C-Suite,” he said. “The most prevalent reason is that these executives are out of alignment with company strategy and don’t have explicit support of the CEO. This criterion trumps all the rest.”

2. Is There a Recognized ‘Business Imperative’?

The CCO is going to be tasked with making huge changes in the organization, Bingham said, and entrenched cultures resist such change unless faced by a greater threat of upset.

Bingham has identified three key reasons CCOs are hired: (1) to address chronic customer issues that need to be made to go away; (2) to reduce severe customer churn; (3) and to gain a competitive advantage.

3. Can Strategy Systematize Change?

An army of one does not win the war, Bingham said, nor does it bring about customer centricity. He said many CCOs have failed over the past because they were the only customer advocate.

“One defining characteristic that sets the CCO apart from other functional executives is the ability to drive strategy at the highest levels of the company. Executives and employees cannot abdicate their shared responsibility for customers to the CCO,” Bingham said. “The successful CCO will cultivate strategic allies across every function, driving process change across the company that enhances profitability of the broadest customer segments.”

4. Willing To Act on Customer Data?

Bingham recommends hard customer data for decision making, rather than the touchy-feely approach. If you aren’t willing to collect, analyze and act on customer data, you aren’t ready for a CCO.

“The organization needs to be willing to initiate customer data-collection activities (surveys, transactions, behavior), turn these data into actionable insights, and ensure people are held accountable for taking action,” he said.

5. Can You Create ROI Metrics?

Bingham listed three hard metrics that CCOs need to work with — revenue, profitability and ROI. Without this info, he said, the CCO can’t do his job. He asked a pointed question: “How can you create a clear line of sight from customer-centric activities to the hard metrics that the CEO cares about?”

6. Do You Want To Serve Customers?

This isn’t a question for the top. It’s a question for the front-line employees. If your employees aren’t willing to truly desire customers and don’t want to be convinced to embrace a customer-centric culture, you either need new employees or you need to put off hiring a CCO.

“Regardless of the level of executive support, Bingham said, “culture can sometimes squash change.”