As customers we rightly rant when we hear the dreaded phrases like “Sorry but that’s not my job”, “You need to speak to another department” or “Can you just give me your details again.” It seems that no one has thought too much about what it is like to be a customer. In truth, many haven’t.
The responsiblity for customer focus has become an area of discussion in many companies. Whilst there are many options, the two leading candidates are the appointment of a Chief Customer Officer (CCO) and the extension of the role of Chief Marketing Officer (CMO).
The CCO is a relatively new corporate role but growing rapidly. A search of LinkedIn returns over 27,000 names with posts in industries as diverse as retail, technology, water supply and banking. My own company has a Chief Customer Officer.
No one has done more to champion the cause and understanding of the role of the CCO than Jeanne Bliss, author of Chief Customer Officer and Chief Customer Officer 2.0. Her work is a must read and it is one of her recent blogs that spurred me to write this. Jeanne describes the CCO role as having the following four functions:
- Establish metrics for defining relationships with customers
- Influence cross-company agreement on how to deliver greatest value to customers
- In partnership with leaders, drive accountability through cross-company data and metrics
- Clarify a common approach and process for driving the work across the organization
Some CCOs have dedicated teams, others have small, staff teams working to influence the rest of the organisation, leading projects rather than owning the delivery resources. Most have responsibility for the end-to-end customer experience, even if that is delivered by other functions. It seems that many have yet to convince their bosses of their of the value they provide: the Chief Customer Officer Council report that they have the shortest job tenure of any in the suite, with an average of 26 months!
The CMO on the other hand points out that much of the critical work of customer focus is marketing. It is about selecting the right markets and customers to serve, identifying the right people to sell to and communicating the brand promise at all interactions. Marketing is also extending its reach beyond customer acquisition to embrace communication with existing customers, driven by the need to secure the revenue value of retention, upsell and positive word of mouth.
Recent research from the EIU suggests that marketers see themselves as the executive responsible for customers. “Slightly more than one-third of marketers polled say they are responsible for managing the customer experience today. However, over the next three to five years, 75% of marketers say they will be responsible for the end-to-end experience over the customer’s lifetime.“ Of course, they would say that: few would forecast a diminishing role for their profession. There is however little doubt that the role of marketing in company success is growing in importance with an increasing focus on how to engage customers at all stages of their lifecycle.
Marketing is already seen as the custodian of customer information, insight and communication; all vital capabilities for driving engagement. Lead generation has spawned lead nurturing – regular, context-based communication, combining subject-based and product specific content. This is exactly the approach needed to help customers exploit the product/service they have purchased. It is natural therefore to place the responsibility for customers here.
One variant, suggested by Ashley Freidlin of Econsultancy is the role of the Customer Director (for Americans, read SVP) to whom marketing, sales and service all report. The Customer Director works alongside a peer responsible for Operations and back office functions. Ashley suggests these roles report to a Board level CCO and Chief Operating Officer respectively. At some time, customers touch almost all parts of the company, so putting everything relating to customers under one executive seems to me a bit like having a CEO reporting to a CEO! That apart, this approach implicitly recognises the importance of a consistent approach across the complete customer lifecycle.
It is interesting to note the roles that do not figure highly when responsibility for the customer is discussed. The heads of sales hardly ever figure nor does service or operations; yet all can rightly claim to have a vested interest. Renewal and upsell is still seen by most companies as a sales function with sales people owning the original sale and the ongoing management of the ‘account’. Operations, by which I mean the people delivering the products and services, have a significant influence on the quality of the customer experience. This first hand experience of the customer makes them well placed to be the customer champion.
Where do I place my vote? I genuinely don’t think it matters.
The debate about who is responsible for the customer and who reports to whom confuses organisation structure and organisation design. The view that structure can fix problems is not new. “We trained hard, but it seemed that every time we were beginning to form up into teams, we would be reorganized. I was to learn later in life that we tend to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization. During our reorganizations, several commanding officers were tried out on us, which added to the discontinuity.” Often mistakenly attributed to a Roman author, the quote is a mere 60 years old from Charlton Ogburn Jr describing World War Two campaigns in Burma.
The debate about who owns the customer actually diverts companies from focusing on the right things. It is also an almost impossible problem. Customers are why companies exist and touch almost everyone in the company at some time in their life. With the exception of legal and regulatory functions, everyone should be working for the customer. Managing that span is the job of a CEO.
Proper organisation design is about much more than who reports to whom. Neither Disney, Zappos nor First Direct have a Chief Customer Officer but that does not stop them being among the most admired companies for customer experience. That’s because they master the real elements of organisation design: work, measures, incentives and leadership. Designed well, these factors produce a positive, customer and performance oriented culture where everyone is a mini CCO.
My advice therefore is work out the answers to the following questions and then, and only then, consider reporting structures.
- Who are our chosen customers and what do we offer them that is unique and compelling in both the product/service and the broader experience?
- What are the key stages on the customers’ journeys and for each step, what are their most important needs? The customer journey may well start before a potential customer is aware of a need and your ability to help them. Don’t fall into the trap most companies make and assume you know what customers want; you probably know only 25% of matters most to them. Good research here focuses on their goals and concerns. Ask them not only what they want but how they want to feel: emotions drive buying behaviour.
- What is our designed experience? This embraces product/service, how the customer wants to interact at the different stages (including channels of communication), the quality of interactions and the advice and support you provide.
- What skills and systems are needed to deliver a great experience at each interaction? What information do we need to collect and provide to build trust and confidence in the customer?
- How do we measure and share data about the quality of the interaction from both the customer and the company perspective? The key here is to focus on measures that address both quality and productivity. Great companies will avoid trade-offs and seek answers that improve both.
- What mechanisms do we need to drive continuous improvement? Some companies turn to formal methods such as lean or six sigma but teaching people basic skills of data analysis and problem solving will help. Then give them the right information, the responsibility and autonomy to solve problems and let them get on it with.
- How do we improve people’s ability to make data-driven decision?
- How do we incentivise people to give their best and employ extrinsic (financial) and intrinsic motivation. The TED talk on motivation by Dan Pink is a must see.
- What mechanisms, e.g. project teams, steering groups, customer councils, can we exploit to foster collaboration? Used well these are far more powerful in driving customer focus than reporting structures. Don’t overlook the value of ad-hoc or unplanned conversations.
- What are the core values and behaviors we live by and how do they guide our recruitment, reward and other practices? Work hard to help people understand them by repeatedly sharing stories that exemplify them. Beware of systematising them in things like performance management systems – it just makes them artificial.
- What do we expect of our leaders and how do we select and develop them? People take their cues about how to behave from leaders; they shape significantly the culture that develops. As one CEO once told me: “Leaders cast a shadow over the organisation. I want mine to cast a shadow of light, not darkness.”
These questions represent a manifesto for change which if addressed will work whatever the title of the person in charge. Purposeful organisation design is not an easy process but it trumps the alternatives. Remember, every organisation is perfectly designed to achieve the results is does. If you want to change your outcomes then address the root causes and then you will need to worry less about.
NOTE: This blog first appeared on Engage Customer