CCO Council Blog

By Curtis Bingham

Some years ago, Raytheon CEO Bill Swanson wrote a booklet of 33 short leadership observations called Swanson's Unwritten Rules of Management. I could go on and on about the knowledge packed in this small booklet, but one of my favorite "rules" is number 32. - A person who is nice to you but rude to the waiter, or to others, is not a nice person. (This rule never fails).  There is a great deal of wisdom in that rule and I've always thought that you can tell a lot about someone's character by how they treat subordinates and especially children. And sometimes you meet truly great people who are an inspiration to all.

Council member Jeb Dasteel forwarded to me this video showing Sean Tucker's interaction with a youth with cerebral palsy and you can clearly tell the caliber of man he is by watching the video.  We're pleased to welcome Sean Tucker as our special guest speaker to our 2011 CCO Summit.

Sean is a National Aviation Hall of Fame inductee and aerobatic pilot for Team Oracle, he is the only civilian performer ever to be allowed to fly close formation with the Blue Angels and the Thunderbirds. Tucker has flown more than 1,000 performances at more than 425 airshows, in front of more than 80 million spectators. At the Summit, he will share his view of leadership, passion, and thrill.

In addition to Sean's inspiration, we've got other great speakers from JetBlue, Nationwide, Oracle, and more. There are a huge number of best practices waiting for you! Can you afford to miss it? We look forward to having you join the conversation!

By Curtis Bingham

Chief Customer Officer: is this a job title you have at your organization? No? Well, it might be time to consider one.  More and more companies are, or need to be thinking about their customers’ experience and how to manage it.  Adding a Chief Customer Officer is certainly a big step forward in making that a reality.  Curtis Bingham, executive director of the Chief Customer Officer Council, recently hosted a podcast covering this topic with Kelly Hushin, Online Content Manager for WBR.  

The CCO role has evolved over the years from a Chief Customer Service Officer to a Chief Customer Strategy Officer. There are two basic definitions of the role today. First, they must be viewed as the ultimate customer authority for not just their division, but also throughout the entire company. The second is that they must drive customer strategy at the highest levels of their company. They must have the credibility and authority to make changes for and on behalf of the customer, no matter where that customer may be interacting with the company. The Chief Customer Officer should have three main goals: to drive profitable customer behavior, to create a customer-centric culture, and to drive customer and corporate strategy into the C-suite and then throughout the company. 

One might ask why a CCO is needed when a company is theoretically dedicated to its customers already. But according to my experience, it’s a position that companies have always needed, but may not have realized until now. One of the Chief Customer Officer’s most important roles is to put a human and personal touch on an often cold and impersonal entity that is the company.

The Chief Customer Officer Council recently did some research that looked at the CCO effectiveness, pulling from a pool of about 200 enterprise companies with CCOs in their role for at least two years. They found that, overall, 67% of the companies that had hired a CCO saw positive fiscal results during the tenure of the CCO. From this data it’s very clear that the Chief Customer Officer generates quantifiable business results, and is an incredible asset to the company. 

Is the Chief Customer Officer just a passing fad? The answer is no. In the same way that a company that is doing very well financially wouldn’t dream of getting rid of their Chief Financial Officer, the CCO is a needed aspect of the company. The CFO is there to help the company stay focused on fiscally responsible strategies. The same thing applies to CCOs. Just because a company has a handful of customers that are happy and satisfied, doesn’t mean that the company doesn’t need a CCO. The Chief Customer Officer is there to help everyone in the organization maintain a singular focus on the customer.

Don’t just take my word for it.  Listen to the podcast and decide for yourself!

By Curtis Bingham

Authority is the currency of the C-Suite. I’m not talking about the chest-beating, testosterone-laden, “hear me roar” type of authority. Instead I’m speaking of the “Our customer has a problem, let’s everyone work together to resolve it and make more money in doing so” type of authority. Most chief customer officers or similarly titled loyalty executives do not own all customer-facing personnel and therefore must lead by influence to effectively resolve customer issues or enhance the end-to-end customer experience and ultimately, increase revenue and profits.

Even as a direct CEO report, the chief customer officer or other loyalty executive may be challenged to obtain the authority needed to get the job done. There are three types of authority for the CCO: borrowed authority, positional authority and earned authority.

Every CCO or loyalty executive has some Positional authority derived from the position and title they hold within the organizational hierarchy. CCOs relying upon positional authority may own many if not all customer-facing personnel such as service, support, consulting, and sometimes marketing and sales. Using positional authority the CCO can point to his or her direct reports and say, “make it so” in order to address customer issues. Beyond the initial bump in influence when the CCO catches people’s attention as something new and unexpected in the organization, this form of authority tends to be static and may not carry the weight of either borrowed or earned authority. Borrowed authority is 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 stronger the halo-effect and the greater the influence the CCO has over the organization. Borrowed authority is strong in the early days of a CCO’s appointment but tends to wane as the attention of the CEO turns to other initiatives. Earned authority occurs when CCO led initiatives are seen to be successful both internally and externally. Authority is earned as the CCO leads peers, executives, and employees to recognize how customer insight and centricity can be valuable aids in achieving their own business, department, and personal goals.

Many CCOs begin with positional authority and borrow heavily additional authority from the CEO. The most effective CCOs with the longest tenure are those who quickly earn their own authority. Ultimately, such earned authority can eclipse both positional and borrowed authority in power and value. Earned authority is the strongest and most sustainable type of authority, enhancing both positional and borrowed authority as it increases.

How can a CCO effectively earn greater authority within the organization? There are three ways to do so:

1. Own actionable customer insight
2. Develop strong relationships with management, peers, employees, and customers
3. Demonstrate quantifiable results tied to revenue and profitability

The 2011 CCO Council Summit to be held on October 18-19 in NYC is entirely focused on accelerating the development of this earned authority. Regardless of whether you are new to the role or very experienced, you owe it to yourself to attend! It isn’t too late—click here to register.

Note: This article is excerpted from the Bingham Advisory, a ground breaking publication designed to define and clarify the role of the chief customer officer in today's global business fabric. Authored by Curtis Bingham, the worldwide expert on CCOs, The Bingham Advisory is scheduled to launch at the 2011 CCO Annual Summit and will enlighten, instruct and drive important conversations for the valuable role of the CCO.

By Curtis Bingham

Do you remember the old “Whac-a-Mole” game?  During my childhood we’d go to the arcade, pick up the oversized, soft, rubber mallet and whack plastic moles that would pop up at random from five holes in a waist-level cabinet.  Every mole successfully whacked was worth 10 points, and we’d work ourselves into frenzy, whacking moles as fast as we could before time ran out.  The app is available for the iPhone and Android devices, and there is even a $28,000 executive Whac-a-Mole cabinet complete with moles made in the likeness of friends, family, or co-workers and liquor and glass storage.

How many moles have you whacked today? As executives, we want to keep our organizations humming along smoothly and efficiently, correcting and preventing mistakes wherever they pop up.  We pride ourselves on being able to identify and resolve problems or quickly root out inefficiencies. We sometimes are frustrated at employees that don’t take initiative, for whom it seems we have to spell out everything.  Bass & Avolio wrote about these employees, characterizing them as a “workforce of risk avoiders and individuals who work merely to standards using ‘traditional methods.’”  Got a few of those? 

Here’s something that may surprise you.   These followers “avoid attempts to innovate because they risk making mistakes and receiving negative reactions from their leader[s].”  Could it be that the problem is not the employees….but you?

Bass & Avolio describe the leaders as having a “Management by Exception” transactional leadership style characterized as monitors who detect mistakes and are on the lookout for variances from standards.  They are extremely reactive and take corrective action when errors occur.  While at times this style may be necessary, it creates a “zero-defects mentality at all costs [that] can handicap willingness to take calculated risks to do what is needed.” 

Some time ago I used a quote in my signature: “If you aren’t part of the solution, you are part of the precipitate.”  See what I did there?  Are you part of the solution? Or are you part of the sludge that is holding your organization back, stifling creativity and preventing innovation? Maybe that executive Whac-a-Mole cabinet should be taken out of the office.

At the 3^rd Annual Chief Customer Officer Summit [INSERT LINK TO AGENDA HERE] we’re going to be talking about accelerating leadership, and specifically about how you can go about becoming the leader that everyone respects and is excited to follow.  If you are the senior-most customer-facing executive in your company, can you afford not to miss this event?

I’m going to be talking a lot about leadership and authority in the coming months.  I look forward to having you join in the conversation.

By Curtis Bingham

In my mailbox today I found a fantastic personal story from my good friend, Jeff, about how treating a customer complaint as a gift ended up winning back a customer, and saving the company money.  I’ll let Jeff tell the story in his words:

“I drink Coca-Cola each day and I have my favorite Sunoco gas station where I go to get a fountain drink. The Sunoco station was out of the soda I like so I went to the nearby Mobile station, which is the only other nearby source for fountain drinks.   I don't like the soda here because the syrup mixture is way to strong for me.  As I entered, I mentioned to the manager that the mixture of syrup at his store is awfully strong.  He said he would look into it.

This morning he told me that he’d mentioned to the vendor that a customer had brought an issue to his attention and asked them to take a look at it.  I was surprised as in my experience most people forget about the customer issue or blow off the customer and go about their daily business.  The service rep discovered that the syrup mixture was double what it should be! In the back of the room, the machine pumps a specific amount of water & syrup into the tubes connected to the dispenser.   The mixture had been very wrong for quite some time, costing the company double what it should have in syrup consumed. What’s more, the nozzle had to be replaced because it was getting all "gunked up", also costing the vendor in repair and replacement costs.  When asked by the service rep, the manager of the Mobil station said, "the customer 'gets it'.  He knows what the product is supposed to taste like."  

I thought to myself, "how often to we ask our customers what they want or what the product "tastes" like?  Or how often do they listen to a customer’s complaint or recommendation?  How many customers went elsewhere because of this problem? This manager listened and reported back to me on my initial comment.  I felt great that I had been heard.  I felt I had a better relationship with the store manager, and with the store that I had shunned in the past.  I’ll be going back.”

A simple, but powerful lesson:  customer feedback is a gift.  Listening to customers not only helps us better serve them, but can often save us money.  How well are you listening to customers?  How easy do you make it for customers to contact you to voice their concerns?  How do you close the loop with customers, letting them know they’ve been heard?  How do you thank them for their feedback?  The next customer complaint you field might just mean a customer saved.

By Curtis Bingham

The CCO Council 2011 Annual Summit is almost upon us and what better way to learn about its value than through testimonials from our members!  In the first of a series of testimonials, Peter Quinn, CCO of Lawson explains some key takeways from the 2010 Summit.

The CCO Council Annual Summit is the only place where CCOs can gather and openly share with true peers their successes, failures, and challenges. Here you¹ll learn what others have done before, and most importantly, gain answers to your most urgent issues. You¹ll walk away with a collection of new ideas, proven strategies, a handful of best practices, and new relationships to support your endeavors. I guarantee that the more you engage, the more you¹ll gain that will help ensure your success and increase your value to your organization, your CEO, and your customers.

In this age where customers demand superior service, access, and transparency, customer-centricity is the only sustainable source of competitive advantage. Let¹s fuel this transformation by bringing everyone with us on the journey towards solid business performance.

To view the full agenda and to register, visit our website, call Christopher Benoit at (978) 226-8681.

By Curtis Bingham

A number of years ago I was creating customer strategy for a credit card processing company and as a result of some intensive customer analytics, I found a rather large customer segment that would gladly by two, three, even five times their current rates because they valued the company’s product and service so highly. I recommended they charge one- to two times more to compensate for the extra value received, which translated into $20MM annual incremental revenue. 

However, the CEO focused on one other finding from my research: the selection of merchant services vendors was a once-and-done decision. Companies would select, conduct competitive analyses, perform due diligence, and choose a provider and having done so would almost never again review the rates, fees, or other statement items. The CEO decided to raise all fees AND charge an annual “Membership Fee” of $70. 

There are three things wrong with this. First is that it is just plain wrong and unethical. Second, it penalizes everyone rather than capturing the value in play. Everyone is forced to carry an additional burden rather than just those who truly value the service. Third and worst of all, this decision emphasizes short-term revenue at the expense of long-term customer relationships. 

As we all learned as children growing up, the foundation of a lie is that it works only as long as you don’t get caught. If your strategy is dependent on not getting caught, Murphy’s Law will inevitably prevail. If your customers don’t notice, your competitors will point it out with great glee! Consequences have a nasty tendency to catch up with us when we can least afford them.

There is a huge amount of research and tremendous anecdotal evidence proving that loyal customers generate anywhere from 5%-33% greater revenue than non-loyal customers. Trust is the foundation for this loyalty. If you destroy trust, customers feel they’ve been abused and taken advantage of. In the end, you sacrifice loyalty, revenue, and customers—it is just that simple.

The question for you is, “What are you doing to customers that you’re hoping nobody notices?” Just because you can do something to your customers, doesn’t mean you should.

By Curtis Bingham

Many market-dominant companies suffer from three common and sometimes subtle yet fatal maladies:

1.  Failure to innovate

2.  Loss of focus on sustainable revenue

3.  Complacency regarding customers

Even worse, companies tend to blame the market rather then owning the root cause of this failure for themselves.

In today’s Wall Street Journal is a story of Johnson & Johnson bowing to competitive pressures and leaving the $5 billion global market for stents or tiny metal devices that blow up and keep clogged arteries open.  The company created the market in 1994 with the first stent that allowed patients to avoid invasive and costly coronary artery bypass surgery.

Failure to innovate
J&J failed to innovate.  They created the category, leveraged their impressive brand, aggressive sales force, and dominated the market for three years before competitors were even able to gain toehold.  Revenues in 2006 of $2.6 billion plummeted to $627 million in 2010.  Abbott Labs, Medtronic, and Boston Scientific have all stepped in with innovative products, at lower prices.

Loss of focus on sustainable profits
Instead of innovating, management rested on their laurels, daring competitors to take them on.  And they sued competitors who did.  J&J reaped more than $2 billion in settlements from Boston Scientific in 2009 and 2010, helping drive overall profits.  Although often necessary in the short term, suing competitors or incessantly cutting costs isn’t a sustainable business model. 

Complacency regarding customers
Which leads us to root of the issue:  J&J became complacent about their customers’ needs. This complacency led to a false sense of security of the market dominant position: “Surely nobody can do this better than we,” or “Our customers don’t need anything more than the best we’ve given them,” they must have thought. Wrong. 

Once you’ve provided customers with an innovation, you open up new horizons.  Human nature helps us acclimate and assimilate quickly, leaving us wanting improvements, be they minor or great.  Customers change.  Constantly.  J&J didn’t get this, but Apple does.

Apple recently introduced the iCloud, designed to better meet changing customer needs of “take me anywhere” documents, music, photos, and more.  Interestingly, this new innovation completely cannibalizes its former MobileMe offering.  Apple continuously revises their store layout, adding in areas for children to play educational games while busy parents are at the Genius Bar.  Store employees line up and cheer customers purchasing newly introduced products. 

Whether you are the Chief Customer Officer, the CMO, or the CEO, the questions for you to take away are threefold:

1.  Who is keeping tabs on how your customers are adapting and changing? Because change they will, guaranteed.

2.  How often?  In most highly competitive industries, an annual survey is stale and too old to inform strategy.

3.  How can you leverage detailed customer insight to innovate, even (especially!) at the expense of your own successful products? 

Just because you created or dominate a category doesn’t mean you own it forever.  How can you eat your own lunch before someone else does? Apple continues to understand how customers work, play, and relax and by doing so, beats competition at every turn.  How can you do the same?

By Curtis Bingham

I have a couple of printers in my office made by HP, who is probably the market leader in this category.  I see them everywhere, and have generally been pleased with their performance and ease of operation.

But that mindset has come to a crashing halt based solely on a service experience I had recently with a CSR from HP technical support, which dates back to a printer problem I’ve been incubating for more than a year.  I called HP technical support to inquire about the status of this complaint. I’ve spent nearly 15 hours with HP tech support and on my own trying to find a workaround so that printouts from my Mac look the same as from my PC.

After summarizing the issue, Jason, the HP CSR I spoke with, told me, “We don’t have to make printers work on the Mac. All we have to do under warranty is make sure that they print on the PC.”

I replied that I’m only trying to get the device to print to the advertised specs.

“You’re comparing apples to oranges,” Jason replied.  “What works on a PC may not work on a Mac. We’re not responsible for all the different settings and configurations.”

I said I’m simply trying to get it to print to specifications – this isn’t an issue of arcane configurations.

“Well, you’re limiting yourself by using a Mac,” Jason said.  I asked, “Are you telling me that you don’t support Mac? “Full bleed printing works just fine on my Canon printer from the Mac.”

“You can’t expect us to copy Canon drivers,” said Jason. “We don’t do that.”

“I’m not expecting you to copy Canon drivers,” I countered.  “I’m only expecting you to support the advertised specifications for your printer.”

I asked for a supervisor, and was denied. I asked for his employee ID number and was denied. I asked for his last name and was denied. I threatened to escalate to HP’s EVP of worldwide service, with whom I’ve had previous discussions and he said, “You just go ahead and do that.”

Sadly, these are the types of exchanges that take place every day, throughout the world. I ended the call right there in a tight-lipped but courteous way. As I hung up the phone, all I could think of was that this entire episode would not have happened if HP had a Chief Customer Officer! 

How can I be so sure?  From my experience working with CCOs – and no one has spent more time with these individuals than I have – training CSRs to be sympathetic, responsive and respectful to customers in all customer interactions is one of the first things they tackle.  Believe me, if a CCO was on the job at HP I would have had a far more positive experience with this agent.  I still may have a problem with printer from my Mac, but at least I would have known that the CSR did everything he could to soften the blow.

CCO Council research has shown that less than 10 percent of Fortune 500 companies have CCOs, which means of course that most CCOs work for small- to mid-sized businesses (SMBs).  While you would expect just the opposite to be true – that the largest companies with the most customers would be at the leading edge of CCO adoption -- there are reasons to explain this dichotomy.  I will explore this phenomenon in a future blog post.

For now, though, I’m going to leave my HP story right here.  I still have a problem printer from my Mac on the HP device. No one from HP has called or emailed since my chat with Jason, but I haven’t called the EVP I know. 

So here’s a challenge for HP: do you have anyone monitoring social media content like blogs to pick up on negative sentiments on your company such as this post?  If I do hear from HP based on this entry, then I’ll reassess my opinion of the value of social media.

In any event, someone from HP should attend my keynote interview at the Next Generation Customer Experience Conference May 23-25 in Los Angeles entitled “The Case for Creating the Chief Customer Officer Role.”  It’s not too far from HP’s headquarters in Palo Alto.

For everyone else, please let me have your thoughts on this blog, and feel free to share your own customer experience examples, good or bad, with the largest organizations.  HP can’t be alone among corporate titans who could use a CCO to improve overall customer relations.  

By Kelsey Bingham

When I began working for the Chief Customer Officer Council, my first task was to make sure our database was up to date, including contact information, company statistics, and CCO tenure. With over 400 entries, this was a huge undertaking. I spent three months going through and researching CCOs from every company imaginable, ranging from start up companies to long-standing enterprise-class companies. I used LinkedIn, Jigsaw, Hoovers, ZoomInfo, Google…just about any site I could think of to find the information that I needed.

LinkedIn was usually my first stop for a person’s title and tenure. But imagine my frustration when 60%-70% of the profiles were out of date or minimalistic. The CCO title has only been around for about 11 years, and I struggle to believe the dates on the profile saying that a CCO has been in their role since 1987.  

When LinkedIn failed, it was off to Google. But there was just so much information on so many different people with the same name that it was an exercise in frustration to track someone down.

If I as a dedicated researcher had so much trouble finding these people, how much trouble will your current and prospective customers have? One of the two hallmark criteria of a Chief Customer Officer is that the CCO should be the recognized customer authority in the company, and thereby have the strongest customer relationships.

The precursor to these relationships is awareness and accessibility. If your name doesn’t show up on your company website, if there are no press releases quoting you, if there are no customers praising your name, are you sufficiently visible and accessible enough to own the customer relationships?

As a Chief Customer Officer, your role is perhaps the most visible of all, other than the CEO.  Your job is to be accessible to the customers. If you are a Chief Customer Officer, no matter your level in the organization, you need to be listed on the company’s website. You need to be visible in customer communities. LinkedIn is probably the most effective business social network. If you’re the Chief Customer Officer, you need to be accessible where people are searching for you. Even if this accessibility comes at the price of getting more direct customer inquiries, it’s worth it because you can delegate the resolution of these complaints and potentially save that many more customers.

When a CCO is appointed, the company owes it to their prospects, customers, and marketplace to announce that they have made such a strong commitment to their customers that they’ve hired a CCO and made them accountable. Leverage the press and social media as a pulpit to share your commitment to your customers.

Be visible. Be accessible. Be successful.