The appointment and function of a Customer Officer (CO) continues to be a discussion topic in the C-suite as customer importance rises—and that trend is ticking upward quickly in 2015. Why is this topic trending in business today?
I would go as far as to say this: companies that create legendary value and service experiences for their customers stay in business longer, create sustainably higher revenues in their industry, and attain brand leader status among their competitors. I believe companies are finally beginning to realize that it’s time to give more than lip-service to putting customers first, by taking action to commit and resource a leadership role that optimizes customer priorities and business outcomes. Enter, the CO.
Reporting directly to the CEO (with very few exceptions), the CO defines optimum customer priorities and targets, leads development and implementation of customer experience strategy, and spearheads the overall execution of initiatives in the direction of customer experience excellence. This executive fosters a customer-centric culture of behaviors, shared accountability, and customer-insight-driven decision-making, along with promoting organizational transformation to disrupt chronic service issues and enhance profitable customer lifetime value (CLV), thereby gaining competitive advantage.
What are the priorities of the CO, and what value do they contribute to a company?
1. Competitive Advantage. When a company places a leader in charge of the customer experience, and when that CO, together with colleagues, successfully plans and executes a comprehensive strategy that delivers desired outcomes, it’s absolutely devastating to the competition. Why? Because creating and enacting a successful customer experience strategy is a complex, challenging, long-term endeavor; but it produces powerful results that are hard to replicate quickly; and by the time your competition understands your achievement, they are 18–24 months behind being able to attain anything like it.
2. Customer Experience Strategy. As the authority on the company’s customer experience strategy, the CO enables other functional senior leaders to understand and effect experience enhancement across the organization, and also ensures that the CX strategy and vision align with and support overall company objectives. The CO is dedicated to linking disparate functional groups, uniting the organization around a set of customer-company priorities and targets with the ultimate goals of delivering on the brand promise and maximizing value. Garnering influence with peers and participation from staff at all levels to achieve that strategy, the CO has authority to break down silos and establish company-wide participation, performance, and accountability metrics that pave the way to successful outcomes.
3. Customer Retention and Loyalty. Although acquiring new customers is absolutely essential, that’s much more challenging and expensive than keeping the ones you have; yet retention opportunities are all-too-frequently missed. This is the “leaky bucket” issue: inattention to current customers results in a 15%, 20%, 30%, or greater loss of those current customers. Promoting and leading company initiatives to specifically identify and retain the right customers for a longer period of time—particularly those who evangelize your brand—builds a company that stands apart in a highly commoditized market, and is part of the CO’s responsibility.
4. Voice of the Customer. With a more thorough and holistic customer view than anyone else (sometimes more than the customers themselves), the CO is responsible for asserting their voice inside the company, ensuring insight- and data-driven decision-making at all times. Driving this responsibility are two realizations: that customers today have more influence than ever before, and that loyalty is created through long-term relationships in which a give-and-take attitude of reciprocity creates previously unimagined value. Therefore, an important aspect of the CO’s job is to attain a complete understanding of customer sentiment, and help the company to understand and apply it to effect company-wide changes that create maximum customer-company value.
5. Streamlined and Simplified Service. Achieving this may sound like an insurmountable task, but it’s not—it’s certainly not. It does take time, perseverance, and a leader who is absolutely determined to see it through to completion. The CO looks at the facts about customer churn, and understands that the many causes of poor customer experience (and ultimately, churn) are highly interdependent and involve nearly every department in the company. To address this, the CO leads the charge in what I call an internalService Dissatisfaction Disruption Campaign, to identify and permanently eliminate customer dissatisfiers lurking within the company and replace them with high-quality, streamlined, simplified processes. To succeed, it requires cross-functional leadership collaborating in earnest to break down silos, define outcomes, and develop roadmaps with assigned responsibilities and timelines.
6. Customer-Centric Culture. Together with HR, the CEO, and others in the company, the CO defines and demonstrates the highly desired behaviors to be used when serving customers. The CO is a catalyst for organizational transformation and employee engagement—empowering, exciting, and incentivizing employees to enact a steady evolution that eventually produces a customer-centric company culture.
7. Customer Lifetime Value. Projecting and pursuing long-term profitable CLV for the company is a top priority for the CO—a responsibility that’s rarely, if ever, the focus of any one leader in companies today. Expected future customer value is defined and demonstrated with profitability modeling to support increased retention, expansion, and referrals, as well as new acquisition. The CO leads strategy regarding customer segmentation, service approaches, resource allocation and “ideal customer” acquisition insight, based on profitability and other important company goals such as share of market and brand perception input. The CO drives this (profitable) PCLV strategy with peers throughout the company to significantly increase both top- and bottom-line financial outcomes.
Finally, the Chief Executive Officer ensures that every functional leader’s performance evaluation and incentives are tied to the agreed-on customer targets—and as a team achievement—to encourage participation, performance, and customer accountability at the highest levels of the company.
Throughout my career, I’ve seen the discipline of customer experience emerge, expand, evolve, and now begin to prove its tremendous value—and that value, along with a clear supporting strategy, should not be underestimated. The ability to champion customer experience excellence company-wide is, quite simply, the lynchpin to retaining, expanding, and acquiring new revenue. The creation of a customer experience strategy—and its unwavering, flawless execution—is vital to achieving a sustainable edge over competitors.
Stay tuned over the coming weeks as I delve more deeply into these key elements. This eight-article series will give you valuable insights and guidance as you plan, develop, and implement your own customer experience strategy.
Ready to move forward more quickly? Interested in personal assistance? Let’s chat. Please sign up for my complimentary 30 minute Customer Insight Strategy Session by calling our office at 617.848.4589 or emailing [email protected].
Lori Carr is a customer experience pioneer and expert. Working with Fortune 500 companies for the past 25 years, she helps popular brands and emerging brands to dramatically increase retention, loyalty, and profitable revenues.