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Who Cares Whether the CCO Tweets?

Tuesday, May 20, 2014

Now that “tweet” has become a verb, it seems that everyone has a Twitter, Facebook, Google+, and any other alphabet soup social media account. And rabid social media “experts” are calling for every C-level executive to embrace social media as part of their “new commitment to transparency.” 

Who cares whether or not the CCO tweets? Is the CMO going to magically create brand evangelists in 140 characters? If the CFO posts a family vacation snapshot on the company blog is Wall Street going to raise earnings expectations?

I think not. While there are benefits, whether you choose to blog or personally participate in social media is irrelevant. However, there are four things CCOs need to be thinking about now with regards to this powerful phenomenon.

Customer monitoring
More and more of our customers are on social media and, with the proliferation of social media monitoring tools, we have at our fingertips a very rich and real-time view of customer (or end-user, as it may be for your business) needs, desires, and issues. Do we need yet another source of information about our customers? We might think not, but in truth, this source is far more immediate than sales reports, quarterly rolling surveys, or even post-interaction surveys. And because they are unsolicited, they are probably more accurate although sometimes far more inflammatory due to the inherent anonymity of the medium. Leverage the opportunity presenting itself and use it to mine information about customers, users, and even competitors and detractors. What might words said in pseudo-public tell you about private business strategy and direction that salespeople can leverage?

Triage and escalation avoidance
As we've seen over and over again, mistakes and mishaps can go viral in a heartbeat. FedEx did a wonderful job of responding within 48 hours to a security camera video of one of its drivers caught throwing a monitor over a customer's gate. In two days the video received more than 4 million views and 17,000 comments. The SVP of U.S. Operations issued a video and print response that was fantastic: apologizing, reiterating the true values of the company, detailing actions being taken, and reaching out to the offended customer. Every news article includes reference to his response, nearly nullifying the impact of the original misdeed. We have all spent significant time and energy creating in our companies elaborate, closed-loop triage and issue resolution processes for our customers in the call centers, sales channels, and at the executive level. We need to extend those processes to social media to discover problems and nip escalations before they become full-blown PR nightmares that damage our brand, loyalty, and profits.

Opportunity discovery
During the Super Bowl a couple of years ago, a number of customers were highly offended by Go Daddy's continuing borderline risqué advertisements and expressed their frustration with the obvious disconnect from their personal values along with their interest in changing domain hosts. An individual in Comcast's then-nascent social media monitoring group happened to be watching and offered them a special incentive to switch. There was a fair amount of business generated by this lucky catch. What opportunities can we find and shuttle to our sales teams?

Employee engagement
In addition to all the benefits, social media can be a legal nightmare, a PR disaster, or simply a venue in which customer trust can be damaged or destroyed. Make sure you provide customer-facing employees authorized to use social media channels on the company’s behalf with clear guidelines for appropriate, business-relevant social media behavior. Take advantage of the many new businesses that are emerging to help companies monitor and control how employees interact with customers using social media. Your objective should be to empower and leverage the enthusiasm of your employees to build trust, promote products and services, champion the brand, and foster productive customer relationships, while providing guidance and oversight to the creation of a consistent customer experience across all channels.

What are your thoughts? Who cares whether or not the CCO tweets?

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Categories: Chief Customer Officer | Customer Centricity | Customer Engagement | Customer Insight

Key Characteristics of the Successful CCO

Tuesday, March 25, 2014

Where does your company stand on customers? Does the voice of the customer make its way up the executive level and influence strategic direction? Have you determined that you need a C-Level position dedicated to creating a customer experience and driving customer strategy throughout the organization? If you don't know or have had concerns regarding these important questions, then it might be time to consider adding a chief customer officer (CCO) to your C-Suite.

One cannot just post a job listing and hope for the best. In this case, the lack of a standard definition of the roles and responsibilities of the CCO creates hiring challenges for CEOs and Boards of Directors. Additionally key characteristics of successful CCOs are still emerging. In order to create the right career path, it is critical for the CCO to understand what is needed to be successful. CEOs and Boards of Directors should use these characteristics as part of hiring criteria.

The CCO is the company's change agent and as such spends most of his or her efforts "selling" customer centricity. The ability to influence both internal and external stakeholders is the single most important characteristic of the CCO. The CCO spends her or his time convincing others that changes being proposed will positively affect the success of the company. Until the CCO has a track record of achievements, the ability to influence others will determine the ability to increase revenue and profitability.

Skills
Above all else, the CCO must have leadership skills, including the ability to influence others. Confronted with limited resources and some skepticism it is critical that the CCO be action oriented, have analytic skills to evaluate data, make conclusions, and turn them into programs. Negotiating agreement on initiatives requires good listening skills; solutions must be collaboratively developed in order to ensure buy-in across the organization. The CCOs' advocacy for the consumer must be unwavering. Putting the customer front and center while balancing fiscal responsibility will keep the CCO focused on his/her mission.

Experience
When asked what experience a CCO should possess, one of the most successful CCOs stated that her broad understanding of business, especially operations, is her greatest asset. It gives her credibility and the ability to identify opportunities for customer improvements. Often organizations promote the "head of customer service" into the CCO role and while that individual may know customer service it is only a small part of creating a customer centric organization.

Personality and Fit
A critical criterion for CCOs is personality and how it fits within the culture or the desired culture of the organization. At the executive level of the corporation, CCOs must be able to leave their egos at the door. Collaboration with colleagues and department heads and the ability to influence them will be critical to success. Strong-arming or using Positional or Borrowed Authority will marginalize even the best formed programs. This collaborative approach must be balanced with the ability to project a strong presence and authority. The reality is that until the CCO is able to "demonstrate value" there are skeptics who will constantly challenge the role of CCO. A CCO must be "thick skinned," able to de-personalize the skepticism, and defend a position that may not be popular or have negative short term financial implications. For example, if a product release is known to have significant flaws, the CCO must be willing to delay the release even though it may result in a negative cash flow.

C-Suite executives and board members must carefully consider the characteristics of the successful CCO. The key is not to just put a warm body in the position with a goal of driving customer strategy. Careful consideration of personality and skill sets with reasonable expectations and timelines will put a new CCO in a position for success. Without incorporating the characteristics discussed above the potential for hiring the right person diminishes.

*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.

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Categories: Chief Customer Officer

Critical Success Factors for Chief Customer Officers

Monday, March 17, 2014

CCO tenure often falls casualty to the "Results right now!" syndrome that ignores a critical fact: like great wine, strong relationships take time to develop and grow more profitable with age. Many of these relationships cannot take root without a strategic plan to transmit the voice of the customer into the c-suite, thereby positioning the company to succeed and the CCO to thrive. Based on my ten years of work with more than 150 CCOs, here are seven critical success factors that will ensure CCOs meet or exceed strategic plans for their careers and for their customers.

Authoritative title and reporting structure: Title and reporting structure of the CCO are powerful signals of the company's commitment to customer centricity. The successful customer executive will have the title of CCO and report to the CEO or to an individual no more than one level below the CEO (e.g., chief marketing officer, chief operating officer, etc.).

Unwavering executive support: Continuous, vocal, and visible support from the CEO, the board, and the c-suite is critical to growth and stability for the CCO. The leadership team cannot abdicate involvement in customer centricity just because the company hired a CCO.

Earned Authority: Above and beyond positional authority derived from the job title and borrowed authority derived from the explicit, visible support of the CEO, CCOs must earn authority and credibility of their own. They do so by leading peers, executives, and employees to recognize how customer insight and customer centricity can be valuable aids in achieving their business goals.

Alignment with the CEO: By aligning priorities with the CEO and the rest of the c-suite, CCOs secure visibility at the highest level of the company and maintain involvement in key strategic corporate decisions.

Metrics that tie customer centricity to revenue growth and profitability: It is critical for CCOs to correlate customer centric programs to revenue growth and profitability, as challenging as that may be. There is growing evidence that customer loyalty and degree of customer engagement are tied to revenue. CCOs must lead their companies to determine and validate the evidence for themselves.

Support from internal and external allies: Without the support of peers, community leaders, industry analysts, and the customer, CCO initiatives will have limited results and impact. Critical to the future of the CCO is developing these alliances and being explicit about defining and communicating successes.

Compensation commensurate with customer centricity: All executives and senior leaders should have customer measures (e.g. satisfaction, loyalty) as part of their Management by Objectives (MBO). As part of this process, CCOs need to lead managers to recognize the impact their department has on customers and customer centricity.

These critical success factors are guideposts on your path to realizing your career goals as a CCO. Create a plan around those goals and use these success factors as self-evaluation criteria to maintain focus and improve your chances for success.

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

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Categories: Chief Customer Officer

Five Ways to Increase Borrowed Authority

Tuesday, February 25, 2014

Borrowed Authority is that which is borrowed from others with greater influence. It is best gained through the strong, vocal, and very visible support of the CEO. The more prominently the CEO advocates for the CCO and reinforces customer-centric imperatives, the ber the halo-effect and the greater the influence the CCO has over the organization. Borrowed Authority is imperative in the early days of the CCO’s tenure as any culture naturally resists change. The voice and Authority of the CEO is often necessary to overcome organizational inertia and enable a more complete customer-centric transformation. Leveraged correctly, this halo effect can be used to gain significant early momentum.

Here follow five strategies to increase your Borrowed Authority.

Align Priorities Alignment with CEO and board priorities is one key to Borrowed Authority. This gets and keeps your seat at the CEO’s table. The successful CCO shows a clear “line of sight” between customer activities and CEO priorities, demonstrating how customer centricity will enable success in meeting CEO objectives. Initiatives so aligned are more easily supported and promoted by the CEO.

Obtain clear direction (particularly at the outset) as to the objectives and measures the board and CEO are applying to the CCO role. In so doing, CCOs not only design their own agenda to best impact the company’s evaluation of their performance, but also inform the board, CEO, and peers of the shared purpose and need for collaboration.

Engage Executives Successful CCOs recognize that they cannot be the only ones championing the customer cause and refuse to allow the CEO or other executives to abdicate responsibility for understanding, serving, and actively engaging customers in growing the business. The most important way to engage executives is to make the voice of the customer roar through the C-suite. Every strategic decision should include the discussion, “What is the impact on the customer?” If the impact is positive, the strategic initiative should be promoted heavily. If it is negative, ways to mitigate the negative impact should be examined.

Speak the Language of Business An important way to borrow Authority is to speak the language of business. The CEO deals in revenue opportunity, ROI, hard cost, opportunity cost—but often finds loyalty or satisfaction scores as a strategic measure to be unfamiliar. At a minimum, the CCO should show how customer centricity can facilitate or accelerate executive goals. Better yet, the CCO should correlate customer value and the dollar cost of changes in loyalty scores with hard data such as revenue opportunities, cost savings, market penetration, share of wallet, and risk measures that the CEO, CFO and other fellow executives use to measure success.

The most successful CCOs are effective in championing hard metrics over the intangible, creating the business case for customer loyalty in terms of revenue opportunities and hard costs that are easily compared with competing priorities.

Create and Leverage Opportunities for CEO Support It is in the CEO’s best interest for the CCO to be successful. Yet, many CEOs and other executives are unaware of the best ways to demonstrate support for CCO activities. CCOs must create opportunities for CEOs and other executives to show support and leverage these activities fully. To solicit and leverage CEO support:

Use the CEO to Blow Up Obstacles When diplomacy fails in the face of “not invented here” or other irrational resistance to customer success, it may simply be necessary to leverage the CEO to blow up such obstacles. One CCO said that it took three years to consolidate employees with the same function from disparate departments. A CEO mandate would have resolved these roadblocks within weeks, saving customers three years of frustration. CEOs occasionally need to clarify or reset executive priorities around customer centricity, either directly through a mandate and personal charge or indirectly through MBOs and bonus plans.

Executives without strong Borrowed Authority report spending nearly 50% of their time justifying their existence and soliciting support, instead of serving customers. Increasing Authority to solve customer issues, drive customer centricity, and thereby create sustainable business growth needs to be a core strategy of every CCO who doesn’t wish to relegate the tenure of his/her role to chance. The Bingham CCO Authority Model is a powerful tool for guiding your strategy to gain and increase power and influence within your organization.

*This article is the second in a three-part series excerpted from The Bingham Advisory: Powerful Influence on Customer Centricity, available for free download here.

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Categories: Chief Customer Officer

The Bingham CCO Authority Model

Tuesday, February 18, 2014

Authority is the currency of the C-Suite. Greater Authority means greater ability to influence the organization to take a desired action. But even as direct reports to the CEO, customer loyalty executives may be challenged to obtain the Authority needed to get the job done. Because they typically do not own all customer-facing resources they must lead by influence to effectively resolve customer issues or enhance the end-to-end customer experience and ultimately increase revenue and profits. There are three types of Authority for the CCO or other customer executive: Positional, Earned, and Borrowed Authority.

Every CCO or loyalty executive has some Authority derived from the position and title they hold within the organizational hierarchy. Using Positional Authority the CCO can point to his or her direct reports and say, “make it so” in order to address specific customer issues. In order to grant sufficient Positional Authority, the CCO is ideally positioned as a direct report to the CEO or perhaps one level below with a strong dotted line to the CEO. Title is crucial in granting Authority, inviting respect, and opening doors to influence other executives and departments to solve cross-boundary customer challenges (see The Bingham Advisory: 8 Strategic Imperatives for the CCO available at the CCO Council website). After the initial bump in influence following the appointment to the role, Positional Authority tends to be static and may even wane over time unless increased through a promotion. 

Borrowed Authority is that which is borrowed from others with greater influence. It is best gained through the strong, vocal, and very visible support of the CEO. The appointment of a loyalty executive tells the organization, including peers within the C-Suite: “Customer centricity is our strategic imperative.” The more prominently the CEO advocates for the CCO and reinforces customer-centric imperatives, the stronger the halo-effect and the greater the influence the CCO has over the organization. As the CEO of Nationwide said when he introduced newly appointed Chief Customer Advocate, Jasmine Green, to his organization, “This is Jasmine. She speaks for me.” Executives without strong Borrowed Authority report spending nearly 50% of their time justifying their existence and soliciting support instead of serving customers.

Borrowed Authority is imperative in the early days of the CCO’s tenure as any culture naturally resists change. The voice and Authority of the CEO is often necessary to overcome organizational inertia and enable a more complete customer-centric transformation. Leveraged correctly, this halo effect can be used to gain significant early momentum. Borrowed Authority may be strong in the early days but tends to wane as the attention of the CEO turns to other initiatives. If the drop is precipitous, the CCO can be rendered ineffective. Thus, while leveraging both Positional and Borrowed Authority, it is critical for CCOs to develop Earned Authority.

Earned Authority is the most powerful and sustainable Authority that can be wielded within the C-Suite and the organization, but it is the hardest won and typically in the shortest supply in the earliest days of CCO tenure. This is the type of Authority that comes with results. It is earned as the CCO leads peers, executives, and employees to recognize how customer insight and customer centricity can be valuable aids in achieving their own business, department, and personal goals. It is earned as CCO-led initiatives are seen to be successful both internally and externally. Because Earned Authority can grow over time, it eclipses all other forms of Authority. It is the strongest and most powerful form of Authority, and wielded correctly, can also enhance Positional and Borrowed Authority in a virtuous upwards cycle. The most successful executives with the longest tenure quickly earn this type of Authority.

Increasing Authority to solve customer issues, drive customer centricity, and thereby create sustainable business growth needs to be a core strategy of every CCO who doesn’t wish to relegate the tenure of his/her role to chance. Using the Bingham CCO Authority Model, you can gain, increase, and leverage your power and influence over your organization on three fronts at once.  

*This post is the first in a three-part series excerpted from The Bingham Advisory: Powerful Influence on Customer Centricity, available for free download here.

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Categories: Chief Customer Officer | Customer Centricity

Internal Customers Are Not Customers at All

Tuesday, November 19, 2013

I recently had a conversation with an executive wherein he suggested that a large part of his focus was in helping employees better serve their “internal customers.” But the concept of “internal customers” is a logical fallacy that focuses attention inwards on policy and procedure, creates false success metrics, and derails strategy in the creation of customer value.

The concept of “internal customers” arose during the era of Total Quality Management as a means of distinguishing the consumers of output and has been transformed into a misguided attempt by HR and others to educate employees on basic human interaction in an effort to make people “play nice.” A customer can ONLY be someone whose name or company name appears on a check. Real customers pay for goods or services. Customers are the ultimate decision-makers in determining which goods and services are produced. They define your business future. Employees are not customers. Employees have no future in a business without customers, yet a business can still deliver customer value without employees (albeit in a limited fashion).

An “internal customer” approach or “employees first” culture statement derails strategy and tactics and creates a damaging, false sense of customer centricity as well as a sense of employee entitlement. If call center managers argue over whose needs are primary – the business units they support or the customers calling the center – the paying customers lose simply by virtue of the distraction of the argument. Focusing on internal customers results in a myopic view of policies, procedures, and metrics, often at the expense of customer service and customer value. IT departments worldwide are notorious for focusing on internal customers. They minimize risk and expense and hamper sales’ or marketing’s ability to serve real customers. Consequently, the marketing discipline is now on the verge of systemically co-opting IT departments in order to correct this damaging imbalance.

For example, a large Canada telecom company reduced IT staffing in order to cut costs. There were many unanticipated consequences, including one instance where a lead salesperson was locked out of customer account databases for 5 days and unable to generate quarterly revenue. So one of the company’s customer-focused executives then recast the IT mission to enable company employees to deliver outstanding value to customers. This simple shift energized and focused IT employees and insulated the department from future cost-cutting efforts.

In the “employees first” model, “internal customers” place themselves on equal footing with external customers, jockeying for position, resources, and status that may damage the company’s ability to serve paying customers. Employee expectations of quality and service cannot trump the mandate of external customer focus. If customers are a business’s raison d’etre, an employee’s existence must be predicated upon delivering outstanding and profitable customer value. Every employee’s purpose must be tied to some customer outcome. Otherwise, what real value does that employee serve? They must be tasked in such a way that they are partners in delivering customer value.

“Employee first” cultures have no place in business. Executives need to create a singular focus on profitably delivering increasing customer value and they must engage employees as critical partners in that delivery. The correlation between engaged employees and satisfied customers/increased revenue is well established. But their priority order must remain: customers first.

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Categories: Customer Centricity | Customer Insight