In this second of two blog posts, I discuss the final three out of seven measurements that should be on every CCO’s dashboard, in addition to the potential metrics for each of these areas.
Depth and breadth of customer centricity as part of the culture
How customer-centric is your company, and how do you know? The core value proposition for the CCO is that of creating competitive advantage from increased customer engagement. The impact upon customers should be considered at every strategic decision and incorporated into the stage gate processes.
Metrics: Consider the number of employees with customer-related metrics in their MBOs, or those with a portion of their bonus tied to customer centricity measures. The number of employees involved in various customer engagement programs is also an especially good metric.
Influence on overall revenue
The CCO has indirect and direct impact on revenue. Directly the CCO can influence new sales and retention rates if they have authority over those areas. CCOs can also improve customer-facing processes that have led to more efficient operations, which leads to overhead reductions. Depending on the span of responsibility the CCO may have other less direct opportunities to influence profitability and revenue.
: Measures will vary by corporation, but some measures might include tracking changes in spending by account based on loyalty scores and customer engagement as these metrics have been shown to impact revenue. The CCO's involvement in the sales process and changes in deal closes and up-selling should be considered as well.
Influence on the key performance indicators of other members of the C-Suite
Initiatives of the CCO should positively affect the Key Performance Indicators (KPIs) of peers. Every executive should be able see improvements in their metrics if the CCO is effective.
Metrics: The influence of customer centric initiatives on KPIs of other departments is a way of evaluating CCO effectiveness. Improvement in the sales cycle, close rate, new sales due to CCO activities are examples of dashboard metrics.
Given the scope and breadth of the business areas to be monitored and measured, the role of the CCO is not to be entered into lightly. When the CCO is successful, the company is successful. CEOs and Boards of Directors must understand and commit to provide the CCO with visible and continuous support, provide appropriate resources and develop metrics to demonstrate the value of the CCO. There are many such resources available to CCOs to guide them through challenges to success and to keep them from experimenting at the expense of their customers. The CCO Council itself with additional research and peer networking guides many CCOs in their mission.
*This series has been excerpted from The Bingham Advisory: Eight Imperatives for the Chief Customer Officer, available for free download from the CCO Council website here.