A Quote about the CCO Council from Curtis Bingham
Join Your Peers and Share Your Insight. Become a Member
Already a member? Click here to sign in
CCO Council Blog
Home   »   CCO Council Blog

The Seven Greatest Challenges in Establishing Strategic Customer Centricity Metrics

Tuesday, August 27, 2013

I'll never forget sitting in a car dealership, waiting to sign paperwork for a new car. I saw a sign posted prominently on the wall that read, "Give us a 10! If you can give us a "10" we would love to have you fill out a survey." Nor will I forget the brightly colored note in the hotel room carefully placed by the telephone with a heading in big bold letters "We Strive for Fives!" While these slogans are catchy, the message is clear: don't bother giving us feedback unless it's a perfect score. In the courtroom this is called leading the witness; where you give hints as to how you want someone to answer your questions. The shortsighted local branches look great with positive scores, but customers are not necessarily satisfied nor are they loyal.

With the leadership of chief customer officers and other customer executives, many companies are recognizing that the key to their continued survival is a strategic customer focus incorporated into foundational strategy, board commitments, executive officer objectives, and company-wide compensation. The enabler of this strategic focus is a universal metric that enables baseline measurement, prioritization of resources, and marked improvement to meet objectives.

Yet there are at least seven big challenges in establishing a strategic metric upon which all are measured. I'm only going to mention three of them in this post. Visit this page for my full-length article that covers all seven and is the first of a three-part series on customer engagement.

Outcomes fail to impact strategic results

While it may seem obvious, it is worth reiterating: the universal metric must impact strategic results. What good is a metric that doesn't result in increased revenue, decreased costs, or mitigated risk? As well, the metric should be a leading rather than lagging indicator. Revenue and profit are lagging indicators-you don't know if you are successful until after the quarter closes.

Perceived inability to influence

This is perhaps the biggest challenge, and is certainly not limited to a customer-centricity metric. As laboratory rats in a maze will give up trying for food when faced with conflicting stimuli even in the face of extreme hunger, so will employees become disaffected when they cannot determine how their work influences the metric they are rewarded for achieving. People have varying degrees of influence over customers, which indicates the need for localized proxy measurements of both customer focus and the ability to enable the customer focus of others.

Unintended consequences

A major financial services company found that their well-intentioned use of an average call handle time metric backfired severely. Rather than solving the customer issues with readily available information, agents would hang up on customers as they approached their call time limit. Customers were forced to call back, destroying customer satisfaction as well as agent profitability. Without care, employees at all levels can be seduced by a number on a dashboard and lose sight of the real goal, that of increasingly enduring, profitable customer relationships.

Many corporate metrics such as revenue growth, earnings per share improvement, etc. have been around for years and people have forgotten the difficulty involved in their establishment. Now, as CCOs and other customer executives are beginning to make customer centricity a part of corporate strategy, it is important to anticipate these challenges in order to help the organization succeed.

What are you doing to overcome these challenges? Do you have a particularly good example of any of these challenges that you can share? Drop me a line. I'd love to include your story (either properly attributed or anonymized as appropriate) in my upcoming book!

View Curtis Bingham's profile on LinkedIn


Categories: Customer Centricity | Customer Insight

Five Ways CCOs Can Save Innovation

Tuesday, August 20, 2013

Innovation failure rates are abysmal, ranging from 60-96%. The most successful innovations directly involve customers in the articulation, design, implementation, testing, and launch. Customer centric innovation the development of value through solutions that meet real customer needs in new ways. This can include different or more effective products, services, processes, technologies, ideas, and even business models. Here are five ways for chief customer officers to focus innovation on customers:

1. Take ownership of innovation at the highest level

Innovation is about risk, and only executives can take the kinds of risks required for truly transformative innovations that yield the highest ROI and form the strongest competitive advantage.

2. Focus innovation on real customer needs

What matters most to customers AND the business? Customer executives need to clearly set the opportunity bar and make transparent the scale and source of growth opportunities.

3. Form powerful alliances with both early and late-stage internal innovators

Early-stage innovators need to understand customer behavior and needs. Late-stage innovators need access to customers to validate product ideas. CCOs should share ideas borne from countless hours listening to, measuring, and analyzing customer needs, wants, and desires.

4. Create conduits to customers to enhance innovation efforts

The CCO is uniquely qualified to identify customers with whom the company has strong, stable relationships; whose needs are relevant to the innovations in development; and who are most likely to provide candid insights and direction for those innovations.

5. Inject the customer into the innovation processes, including the innovation reviews, stage gates, and funding decisions

Critical decisions are too often made in a customer vacuum. CCOs need to define customer centric valuation metrics as innovation success criteria. The metrics and the levels of customer involvement should be dependent upon the investment and most especially upon the customer impact upon launch.

Any innovation strategy that does not include customer participation deserves to fail. CCOs are uniquely positioned to incorporate customers into the innovation process and to do so in the earliest stages. Resources can be used more wisely in bringing greater value to customers And ultimately, the company realizes a much higher ROI on its innovation efforts.

What are some of the ways your company engages customers in its innovation processes?

View Curtis Bingham's profile on LinkedIn

Tags: | |

Categories: Chief Customer Officer | Customer Centricity | Customer Insight

How wrong can a CEO be?

Tuesday, August 06, 2013

In a recent Wall Street Journal article Carnival Cruise Line’s recently replaced CEO and current Chairman of the Board, Micky Arison, talked about Carnival Cruise Line’s difficult road to recovery. If you recall, the Carnival Triumph suffered from an engine room fire, leaving more than 4200 passengers stranded in the Gulf of Mexico for five days, with no hot water and very few working toilets. 

Mr. Arison is quoted in the article as saying, "To put it into perspective, 3000 passengers were impacted by the Triumph incident. None was hurt. It was a passenger comfort issue. We apologized."

Five days without a/c, or hot water and with raw sewage running down the halls is hardly a "comfort issue." When your customers are so upset with you that they file lawsuits against you, it is slightly more than a "comfort issue." 

How wrong can a CEO be? 

Carnival's troubles began with the sinking of the Costa Concordia in Italy in 2012. In March 2013 the Carnival Dream diesel generator failed and passengers were flown home with a partial refund and a promise of 50% off their next cruise. A week later the Carnival Legend wasn't able to make full steam, and limped back to port. Passengers received a $100 credit. 

Clearly, Carnival’s mechanical problems have caused great harm to customer relationships. But perhaps the most damaging is the attitude of the CEO. I can guarantee that the cavalier attitude with which the CEO treats customers is propagated throughout the entire company, diminishing the customer experience and destroying customer trust.  According to Gerry Philpott, president of E-Poll Market Research, only 4% of survey respondents viewed Carnival as "trustworthy" in 2013, down from 9% in 2011.

Mr. Arison, customers are not merely whiners to be placated. Bob Olson, former CCO of GoDaddy had it right when he taught employees to treat everyone who calls as they would a family member. 

How can you help every employee, from the CEO to the security guard, view and treat customers as well as they might treat their mother, or elderly grandmother?  Or even better?

View Curtis Bingham's profile on LinkedIn

Tags: | |

Categories: Customer Centricity | Customer Insight