By Curtis Bingham

Customer crises strike without warning, and the chief customer officer must act swiftly and decisively to address root causes and begin rebuilding damaged customer relationships. Over my years of experience working with scores of chief customer officers, I've found three steps that are crucial in successfully managing any crisis:

Build Strong Customer Insight Before Crisis Strikes
As owner of the customer you know the value of thorough customer research, but having detailed data is particularly vital when crisis strikes: your unique customer insight must form the basis of a successful response strategy. Relying on that insight you will be able to specifically target touch points that will resonate with your customers, identify areas of the organization's plan that may exacerbate negative opinion, and determine the best strategies for mitigating that negativity. Have a comprehensive customer research program in place before you're faced with crisis to ensure that the information is there when you need it most.

Focus the Organization on Customer Impact
It's all too common for the wider organization to focus on damage control-acting in self-defense, laying blame, or stonewalling. But this will only worsen already injured customer relationships. Instead, it's imperative for you to lead the organization to focus on customer impact at every step along the road to recovery. This is not to say that every action must have a positive impression; we know there are times the organization must act despite negative impact. Your job is to ensure that at every step someone is asking the question: how will this affect customers? If it's positive, highlight it in a way that strengthens customer relationships, and if it's negative, use your customer insight to mitigate the damage.

Rebuild Damaged Trust
Incorporating high customer touch into routine operations allows you to rebuild trust while creating sustainable customer centric change. Seek opportunities for reassuring customers not only within the recovery, but throughout the organization. Look for functions that can be updated or repackaged to highlight positive customer impacts. Share information with customers by updating call center scripts, or devise high touch outreach programs to provide understanding about particular actions or operations of the organization. Customer trust will return only when customers feel they are receiving honest and forthcoming communication about the problems affecting them and the steps you are taking toward resolution. 

By Curtis Bingham

The CCO Council identified six of the greatest challenges CCOs face and recommends the following approaches to overcoming them. 

1. Customer centricity is not widely viewed as a strategic imperative and the CCO's contribution to this imperative is poorly defined. As a result, CCOs spend more time explaining and defending their value than they spend with customers.

Recommendation: The CEO and Board must recognize the growing body of proof that customer-centricity is the new basis for competitive advantage with demonstrable business results, and then make the CCO a part of this strategic imperative.

2. The most successful CCOs recognize and leverage three sources of CCO Authority, starting with either Positional Authority or Borrowed Authority and quickly earning authority of their own. Without such authority, cultural resistance to change, conflicting priorities, and a host of other obstacles prevent CCO success.

Recommendation: The CEO must provide to the CCO significant Borrowed Authority. The CCO must "earn" authority rapidly by providing value, demonstrating results at all levels, and effectively communicating the business impact of those results.

3. Not surprisingly, there is often limited understanding of the type of resources required to successfully convert an organization to customer centricity. The CCO of one enterprise company chose to report into Marketing as a strategy to gain greater access to staffing and expertise.

Recommendation: CEOs and Boards of Directors must have realistic expectations of the resources required for a CCO to be successful and make a commitment to supply those resources. 

4. Gathering customer data is easy, but converting it into action is much harder especially as the complexity of customer purchases and interactions increases. Many CCOs struggle to move beyond the voice of the customer and triage to create and implement customer strategy.

Recommendation: Implementing customer triage and issue resolution processes are critical first steps for CCOs. But then the CCO needs to make powerful allies and initiate cross-functional initiatives to create workable customer strategy that cuts across business units to improve the overall customer experience.

5. Implementing change is challenging for most organizations and resistance to change is human nature. Traditional methods for cultural change including bonuses and penalties help mitigate the resistance. Actively engaging employees in the process of change will move the culture from compliance to engagement.

Recommendation: The CCO must accurately evaluate the company's appetite for change and adjust expectations and program design accordingly. 

6. Many organizations are adept at measuring transactions but customer emotion and behavior are harder to measure and correlate to results. This difficulty is perhaps the single greatest reason for the CCO's role being the most fragile in the c-suite.

Recommendation: The CEO, Board, and CCO must agree upon metrics and measures that balance revenue, profit, and customer loyalty. The CCO must effectively communicate and market the value of customer-centric change to the organization to gain further support and adoption. 

Whether you are an experienced or new CCO, addressing these challenges head-on can help you drive more profitable customer behavior, create customer-centric cultures, and increase the value you deliver to your customers.

*This article is excerpted from The Bingham Advisory: Eight Imperatives for the Chief Customer Officer, available for free download from the CCO Council website here.

By Curtis Bingham

The new reality is that innovation must start with customers. To effectively leverage innovation to fuel customer-centric growth, companies need to do three things:

Develop and regularly refresh an extraordinarily deep understanding of customers’ needs, wants, desires, and attitudes regarding their products, services, and the company itself

It isn’t too hard to find out what customers need, want, and are willing to pay for these days: customers are demanding to be heard, across an unprecedented proliferation of channels and platforms. Unfortunately, not nearly enough companies make sufficient effort to systematically capture and utilize available customer insight, choosing instead to operate “from the gut”, or rely upon outdated third-party research.

To effectively listen, you must speak with and learn from customers, vendors, partners, and others, wherever they can be found. You need to scour the social web, public forums, and user communities to woo influential users, bloggers, exemplars and advocates who can meaningfully contribute to your growing body of knowledge. Of course you need to solicit information about product issues, too, but there is far more than that to be gained. You must delve deeper into customer attributes, perceptions, dissatisfiers, and how they reflect upon your business processes. That data will enable you to quantify, justify, and defend the value you provide. It will also help you fortify customer purchase and retention drivers, as well as to discover new, profitable opportunities.

Assign executive champions for innovation initiatives

Great leaders are those who can recognize significant innovation and successfully evaluate it, vet it with customers, and commercialize it. Executive leadership alone has the ability to understand potential, forswear risk, fund great ideas, and remove obstacles. Companies must create executive-level support for well-qualified initiatives so they see the light of day and have a chance to contribute to the company’s bottom line. As well, these contributions must be formally measured and rewarded to ensure that the desired results are achieved. 

The CCO Roadmap identifies innovation as one of the key responsibilities of the chief customer officer (CCO). The CCO is in a unique position from which to identify, evaluate, and refine customer-centric innovations to ensure the greatest success. World-class CCOs have at their fingertips data identifying the most valuable and profitable customers whose needs are most important to consider. In addition, these CCOs have the strongest B2B customer connections and the greatest B2C credibility to garner participation in customer listening activities that discover, test, and refine innovative ideas. Leveraging their in-depth customer understanding, CCOs can effectively ground the most promising innovation efforts in reality.

Create a unified process for identifying and qualifying new opportunities for products, services, markets, or segments

With the seemingly unending supply of new business opportunities, how do you go about evaluating them all to determine which ones are viable? For Proctor & Gamble, the process was relatively straightforward: it identified the five biggest customer issues for each its divisions and then spent time with key customers to identify the desired experience around each issue. It then began to source solutions from innovation marketplaces, evaluating each according to potential profit contribution, strategic fit, and overall improvement to the desired customer experience. While your process may be different, the most important thing is to ensure that there is a unified process that everyone in your organization understands and can follow.

It is clear that sustained, profitable innovation must come from customers. Those companies that strive to intimately understand their customers’ needs, wants, and desires and profitably satisfy them better than their competitors are those who will win in the customers’ eyes and in the marketplace. Let your customers guide your next strategic move so you can grow profits as you attract more of the best customers and keep them longer. 

This blog post is excerpted from Curtis's full-length article, Innovation Starts With Customers. Visit our Exclusive Resources page for other articles by Curtis.

By Curtis Bingham

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?

By Curtis Bingham

The CCO role – today still relatively new and underrepresented – is a lonely place. Yet the impact CCOs have on a company’s bottom line can be profound. They address customer centricity in its primary forms – customer satisfaction, customer retention, and customer loyalty – and they help develop profitable customer strategies that work for your company because they work for your customers.

CCOs have mastered the following three key elements of corporate survival:

Driving profitable customer behavior

Boosting customer satisfaction, retention and loyalty are terrific as goals of your customer-centric culture. But just achieving these goals won’t ensure success. You need to encourage customers to behave in a way that maximizes profits. That requires repeat purchases as well as upselling and cross selling within your product/service portfolio. CCOs have proven adept at establishing loyalty programs that reward purchases of the most profitable products/services based on incentives such as “membership points” that can be redeemed for merchandise, gift cards, etc. This approach builds add-on sales and provides a sense of identity as a “member,” which strengthens a feeling of customer loyalty due to entitlement.

Create a customer-centric culture

The commitment to customer satisfaction, retention and loyalty should be part of the identity – the DNA – of an organization. But adding customer centricity to a company’s mission statement is the easy part. Implementing it throughout the organization entails some heavy lifting. CCOs are developing performance metrics to verify that customer-centric processes are in fact being followed. They are creating incentives for employees at all levels to comply with best practices for their positions that promote customer satisfaction, retention and loyalty. Some even review hiring practices to ensure that qualities associated with customer service orientation are part of the screening process for new hires.

Demonstrate your value 

All CCOs worth their salt have developed a methodology for verifying their contribution to revenue and cost savings. For the former, they can point to increasing sales year over year among existing customers, the increased rate of newly acquired accounts, and reduced churn among the overall customer base. For cost containment, all CCOs can point to fewer calls from unhappy customers, fewer poorly handled onsite customer visits, etc. The more skilled CCOs also provide data from customer surveys that show high levels of satisfaction and loyalty, which serve to increase brand equity and lifetime customer value.

Armed with these strategies and tactics, CCOs not only survive, most are thriving…and getting their fair share of compensation increases by recognizing that keeping customers happy is always a good business decision.

By Curtis Bingham

One of my favorite stories to illustrate the costs associated with lost opportunity centers around a major market research firm that decided to scuttle what was initially an eagerly anticipated new practice area. The firm decided that there wasn't a market for this new area and the associated research. A few years later, however, this firm’s biggest competitor had a booming practice – its largest by report volume and revenue – in this very same area. Not only that, but the competitor's most widely read analyst was writing about this area exclusively. Somehow, the competitor created a very successful business in the same market that was deemed unprofitable and unfit for entry by the first firm. How could one firm fail where a competitor succeeded so completely?

From a business perspective, it may make sense to scuttle a project when sales are lackluster and the new product or service simply isn't gaining traction. Yet, in this case and with the benefit of 20/20 hindsight and a competitive outlook, that was exactly the wrong decision. How could this research firm have made a different (and more profitable) choice?

In talking with executives, I identified three problems. First, their initial foray into the marketplace was too general; they didn't investigate and so couldn’t address the specific needs of their customer base, which they spent no time up front attempting to understand. So, the product they delivered didn't provide sufficient, immediate, and practical value. This oversight created their second problem: a marketing issue. Although undertaking a new practice area, targeted to a different role within existing client organizations, the marketing department didn’t equip the sales team to identify the right buyers. Nor did it equip sales with the right messages to effectively convey the new product’s value. This resulted in the third problem: poor sales execution. Because the sales team was uncomfortable and ill prepared, they gave up prematurely. Their rationale was, "We can't figure out who owns the function in the company that corresponds to this practice area, therefore we can't sell the research."

So the company scuttled what could have been a $100M opportunity. If they had spent time up-front to find out who would actually buy the new product and what specific research these prospective buyers were looking for, they could've avoided this disaster and saved a huge amount of money.

There are two lessons to be learned from this story: You need to clearly identify prospective purchasers and you need to spend time with them to understand how your product/services address Customer Purchase Drivers. As I've written elsewhere, customers base their purchase decisions on the attributes of a product or service that enable them to do four things: 

1. Make more money 
2. Reduce costs 
3. Mitigate risks 
4. Satisfy an emotional need

Only by understanding these Customer Purchase Drivers can you develop products and services that are guaranteed to be successful in the marketplace. Only by spending time with customers beforehand can you avoid making a $100M mistake.