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Will you allow your customers to trash your brand?

Tuesday, November 05, 2013

Let’s face it. The customer is not always right. And persisting in this belief can have consequences. Sometimes, the best thing you can do for a customer is to gently and politely tell them, “No.” 

Airbus, one of the world’s largest jet manufacturers, is pushing back on the airline industry trend towards smaller seats. It used to be that nine-across seats were standard, and many airlines are moving to 10-across and thinner seats with less padding. Of course, the airlines are all about saving weight and adding more paying passengers to each flight. Last year nearly 70% of Boeing’s 777 planes had an extra seat squeezed into each row. But, this latest push to narrow the seat size from between 18-19” to 16.7” wide has caused a backlash amongst travelers.

Some claim that a "coffin has more shoulder room," or that "airlines might as well do away with seats altogether and use straps like on the subway." Travelers are complaining to the airlines and are even taking out their frustrations on Airbus and Boeing. Airbus, to its credit, is doing consumer research of its own and is advocating a minimum width of 18" as it improves passenger sleep quality by 53% over 17" wide seats (and I would expect 100% over 16" wide!). 

In a related vein, a financial services company manages the flexible spending accounts for a number of big employers. Yet each employer sets the standards on how strict to be in examining the employee expenses submitted for reimbursement. Some restrictions are very severe, causing a significant but misplaced customer backlash against this financial services company that might be spilling over and damaging its consumer brand.

You work very hard to build and protect your brand. You work hard to create a great customer experience. Why would you let your customers ruin the brand and experience for the consumers?

The most effective customer executives and brand marketers take ownership of their brand and customer experience all the way through the value chain to the end consumers. Even though it may not be popular (as in the case of Airbus) consider defining minimum service and experience standards. Demonstrate wherever possible the longer-term benefits of customer loyalty and engagement over short-term profits. Or perhaps you can show your distribution channels how to deliver even greater value that far outweighs cost cutting; for example, by putting in power outlets in each row, as Alaska Airlines is doing. Personally, I’ll pay a lot extra for standard seats AND power for all my devices, especially now that the FAA has allowed all devices to remain on throughout the flight!

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Categories: Chief Customer Officer | Customer Centricity | Customer Insight

The New Silver Bullet for Growth and Customer Loyalty

Tuesday, October 22, 2013

If you want to grow your business while simultaneously increasing customer loyalty, the chief customer officer (CCO) might just be the silver bullet you are looking for. The CEO is uniquely responsible for shareholder return, the COO for cost-efficiency, the CFO for the company's financial well-being, the CMO for market awareness, and the EVP of Sales for quarterly revenue. One executive must be held accountable for not only the strength of customer relationships but especially customer value (i.e., the value of a customer to your company as well as your value to the customer). This customer champion must be able to properly weigh customer needs against revenue, cost, and other strategic business drivers. As well, the role of customer champion must be an executive-level position to effectively gain trust in customer and prospect organizations as well as drive change throughout many different divisions.

The chief customer officer, or other similarly titled executive, is uniquely capable of fulfilling this role and of helping your organization achieve the following five objectives:
 
Grow Revenue
By establishing customer value metrics, the CCO can identify the most valuable customers and help marketing and sales find more prospects just like them.
 
Increase Customer Profitability
As I've written elsewhere, not all customers or prospects are created equal. In one extreme case, researchers found that 20% of a manufacturing firm's customers generated 220% of profits. Fully 80% of customers were marginally profitable or even unprofitable! With a CCO's breadth of customer insight, companies can effectively segment customers according to customer value drivers.
 
Increase Customer Loyalty and Retention
Because of the CCO's regular interaction with customers, consistent "health measurements," and early warning mechanisms, this indispensable officer is uniquely capable of identifying customer dissatisfaction and potential for defection.
 
Develop Sustainable Competitive Advantage
In this age of hyper-competitiveness where any feature or service-based differentiator is easily duplicated, the only truly sustainable competitive advantage is in-depth customer understanding. Under the direction of the CCO, companies that make customer insight actionable and drive customer-centric change throughout the organization will be successful. 
 
Decrease Costs
The CCO, by virtue of his/her position and breadth of involvement with current customers and the marketplace, is uniquely positioned to determine levels of support and attention given to customers according to customer value metrics. As a result, decisions and priorities will more likely maximize customer value to the company.
 
Your company can reap multiple benefits by establishing the role of chief customer officer. You will be able to maximize the profitability of current and future customers; increase customer loyalty and retention, and ensure long-term success as you develop the in-depth insight into what customers need, want, and are willing to pay for. Incorporating the CCO function leads to longer and more profitable relationships with key customers, which in turn leads to achieving the ultimate goal of increased and more profitable revenues.

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Categories: Chief Customer Officer | Customer Centricity | Customer Insight | Customer Loyalty | Customer Retention

Member Guest Blog: Common Accountabilities of the CCO

Monday, October 14, 2013

As competition heats up and customers become more demanding, many companies play to strengthen their customer relationships to better understand and meet current and future customer needs while solidifying their current business. Some companies recognize the value of assigning accountability for customers to an executive, most often titled “chief customer officer” or CCO, but given other names as well. The CCO or its equivalent is considered to be a company's ultimate customer authority and is driving customer strategy across the highest levels of his or her company. There are many different implementations of the CCO role. But what are its primary contributions? The Chief Customer Officer Council (CCO Council) identified seven common accountabilities of CCOs based on research among its own membership.

Council members identified 16 important functions that could potentially belong to a CCO. These were used as the basis for a written survey, which was then sent to the entire membership base via the Internet. Members were asked to report on the responsibilities that were incumbent upon them in their current roles and to rank those responsibilities as prioritized by their organizations. Results were returned by 60% of the membership. The resulting seven common accountabilities of a chief customer officer are:

  1. Customer-centric tactics
  2. Customer Experience management 
  3. Metrics and analytics related to customer-centricity
  4. Customer-centric culture or the evolution to such
  5. Customer strategy
  6. Understanding customer needs
  7. Building customer relationships

There were two skews identified. The first was a skew to large companies with greater than $1B in revenue. The second was a skew towards B2B (vs. B2C) companies. More details regarding the accountabilities can be found in the full article published on this page

While the activities a CCO might engage in are legion, these seven appear to be the most common and important regardless of company size, industry, or definition of the CCO role. Even if your company doesn’t have a CCO, to become truly customer centric and create sustainable competitive advantage, an executive needs to be held accountable for activities, at a minimum.

Are you managing to these activities?  What others are you being held accountable for?

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Categories: Chief Customer Officer