Guest post by Blake Morgan, Customer Experience Futurist, Author, Speaker
For a customer experience program to be effective, the most senior leaders at the company must take ownership of the program. But unless the CEO appoints a chief customer officer, a chief customer experience officer, or even a chief marketing officer who is empowered to get things done for the customer, it’s hard to say who will lobby for the customer across the organization. While it’s wonderful to have a CEO who takes on customer experience, without focus, the priority can be lost among a sea of pressures. Research from companies like PricewaterhouseCoopers (PwC) shows that 63 percent of CEOs want to rally their organizations around the customer as a top investment priority, but that is easier said than done.
The problem can generally be traced by to budgets and priorities
Worldwide, brands spend $500 billion per year on marketing and advertising and a mere $9 billion per year on customer service.4 A report by vendor Genesys and the Economist Intelligence Unit shows there’s frequent confusion over who is truly responsible for the customer experience.5 The report, published in June of 2015, surveyed 516 senior-level executives from twenty-one countries. The vast majority of these (464) were C-suite executives—of whom 165 were CEOs—while the remaining fifty-two respondents were heads of a business unit. According to the study, two in three companies surveyed (63 percent) say that customer experience is a “very important” investment priority. Two in five companies (42 percent) have boosted relevant spending by more than 10 percent in the past three years, a proportion that is estimated to climb to more than half (51 percent) over the next three years (by 2018).
Clearly, businesses believe that customer experience matters
But do they act on it? That depends on who owns it. When it comes to the big question, “Who owns customer experience?” the most successful companies have a CEO who takes ownership of it. The study showed that 58 percent of companies that say they are much more profitable than their competitors report that the CEO is in charge of customer experience. Only 37 percent of less profitable companies say the same. Meaning, if you have a CEO who cares deeply about customer experience and takes it on, your company is going to reap the benefits.
Companies that fail to respond to these changing modes of communication are vulnerable to large-scale customer flight. Not only that, but the study points to increased competition and the fact that, because of the greater number of service channels, the potential for customer dissatisfaction is also higher. What is telling about the study is the overall lack of accountability when it comes to customer experience. When asked who is leading customer experience transformation initiatives, CEOs say one thing and those who work for them say something different. Seventy-two percent of CEOs say they (the CEO) are in charge of customer experience, but only 27 percent of the other executives surveyed agree that the CEO is in charge of that area.
No wonder customer experiences are, by and large, far from ideal. Too many people are claiming partial ownership over the customer experience, and as a result, nothing is getting done. Smart CEOs who don’t have adequate time to commit to customer experience are delegating, with some of the most forward-thinking companies appointing a chief customer officer, who has real authority to get things done across the organization.
The Importance of a Chief Customer Officer
The chief customer officer represents the customer at the highest levels of the organization. Some chief customer officers are responsible for account management and customer service, while other chief customer officers are free agents who liaise with various departments across the company. Ideally, the chief customer officer spends a lot of time with customers and takes the customer feedback and insights to every department. That way, the entire company is on the same page around customer experience. The more visibility the chief customer officer has across the company, the better. One of the goals of the chief customer officer is to structure the company around the customer. Organizational structure and hierarchy are not the same at every company, however, and some companies may have various influential positions, such as VP of customer experience, chief experience officer, or other more creative titles.
In 2015, the CCO Council’s Annual Chief Customer Officer Study showed continued growth in the number of CCOs at major corporations, with 10 percent of Fortune 500 companies having already adopted the role, a percentage that jumps to 22 percent among the Fortune 100.
The more profitable the company, the more likely it is to have a chief customer officer at the helm. At big companies, it can be hard to get things done, and one highly influential person with budget authority and freedom to move across the organization can cut through much of the bureaucracy. Jeanne Bliss, author of Chief Customer Officer, calls this position the “human duct tape” of the organization. In her book, she quotes the former chief marketing officer and customer experience officer of Walgreens, Graham Atkinson: “The role of the CCO is to drive executive appetite for wanting to know the interruptions in customer’s lives, simplifying how they are delivered and facilitating a one-company response to these key operational performance areas.” This is a smart way to describe the role of the CCO. Driving executive appetite for learning about customers’ lives is not easy. How do you get the busiest people within the company to put top priority on something they can’t see every day (customers)? Additionally, how do you get the entire company to care about the many inconveniences and interruptions created in customers’ lives by poor customer experiences? Bliss says that if you reduce or eliminate these interruptions for customers, your business will always thrive.