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Announcing the Latest Bingham Advisory

Thursday, January 09, 2014

I'm beginning 2014 with the exciting announcement of a new Bingham Advisory: The Customer Engagement Trajectory.

Based on my work and discussions with Council members and senior customer executives, this latest edition reveals how customer engagement is defined, how it can be measured, and where it emerges in the business-customer relationship to provides its greatest value. In addition, I share interesting details about how real world companies such as MetLife, Oracle, and Riot Games are engaging their customers and enjoying bottom line improvements to revenue and shareholder value as a result.

Download your free copy here and follow my blog where I'll be posting excerpts over the next few weeks.

 

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

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

Using Data to Prove Your Value

Tuesday, September 24, 2013

It’s a challenge for the CCO, as well as any loyalty executive, to prove value and get it right in the first two years, much less the first. Even though 67% of companies with CCOs outperformed their industry and markets in 2010, it is the most fragile member of the C-Suite, with an average tenure of 31 months based on research conducted by the CCO Council. In my interviews with successful CCOs, one central thread running through our conversations has been the importance of using data to prove the CCO’s value in those first two years. Even a seasoned executive can become overwhelmed or distracted by the job of managing and making data relevant, so here are three best practices to help ensure your data effectively improves your perceived value.

Let the Data Speak – Not Swallow You Up
Collecting and building data is a first essential step in connecting you to improved fiscal results. But rather than making data a central focus of your job, it should be used to inform you of the critical areas where your energy can be focused for greatest impact. Analyzing data should not become the big black hole you lose yourself in. Padded with a little appreciative inquiry, quality data will paint a clear picture for where you can improve delivery of value to the customer. 

Connect to the Customer Using Data
In some companies, the CCO has no direct ownership over processes that touch the customer, making it incredibly important for the CCO to connect her role to customer satisfaction. She does that by constantly measuring and monitoring customer feedback, customer loyalty, and customer satisfaction. Connecting to the customer allows you to figure out what drives customer satisfaction and repeat revenue. It gives you critical traction to deliver your point of view to an executive team. It helps you frame compelling messages to deliver to your teams and customers, and provides the needed borrowed authority to boost the perception of your value.

Own the Customer’s Voice and Make it Visible With Data
Successful CCOs are spending a lot of time communicating stories internally and externally; stories of revenue impact, turnarounds, customer loyalty improvements, etc. At the end of the day nothing speaks more loudly than a great track record and excellent execution—so use your borrowed authority as the voice of the customer to create a buzz around customer or organizational successes, and to plot the road map for continuing relationships. Data may change or disappear, but people will remember stories, and ultimately, the stories you collect persuade others to action.

Question to consider: how adept are you at translating/framing customer data for your executive team?

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Categories: Chief Customer Officer | Customer Insight | Customer Loyalty | Customer Survey

Gaining Critical Insight to Grow Your Business

Tuesday, September 17, 2013

Most companies have only two communications channels with customers: sales and complaints. Both of these are important: companies need to sell and customers need ways to seek redress. But neither tells a company what customers need in order to be successful. To ensure success, you must continuously discover and deliver what you know your customers and prospects need, want, and are willing to pay for.

There are four steps to success in this process:

  1. Proactively listen to customers in an organized, meaningful fashion
  2. Make customer data actionable
  3. Drive customer valued change throughout the entire organization
  4. Measure effects of the change

The first step is critical for the success of the remaining three.

Customer Insight Conduits
The fastest way to gain real insight into what customers need and want is by establishing Customer Insight Conduits. These Conduits help bridge the gap between company capabilities and market or customer needs.

Customer Insight Conduits are defined as channels through which information passes primarily from customers and the marketplace to a function within the company that is able to make data actionable and drive customer-valued change throughout the organization. These Conduits provide an early-warning system for problems. As problems are recognized, the Conduits serve as a diagnostic tool to help fully understand issues and determine the efficacy of solutions. In addition, the Conduits are a measurement vehicle to assess overall customer value and other metrics.

Here is just a handful of Customer Insight Channels that could be leveraged as a key component to help gather customer data that is then converted to insight, made actionable, and used to drive strategic, customer-centric change throughout the organization:

  • Customer advisory boards, comprised of economic buyers of your products/services from an appropriate sampling of the customer base
  • Technical advisory boards, comprised of those who are actually going to be using your products or taking advantage of your services
  • Customer conferences, where you roll out new products and/or service
  • Chat rooms and discussion boards that you host or monitor or both and where you gather ideas and identify problems through product discussion forums
  • On-site assistance for a day, in which you send an engineer, consultant or other appropriate person to a customers' site to help them gain the full benefit of your product/service

Using Customer Insight Conduits such as these and many others, companies can gain critical insight that, when made actionable, can:

  • Develop successful products and services
  • Differentiate from competitors effectively
  • Improve prices and margins
  • Attract & retain more profitable customers

What channels is your company using to discover and utilize customer insight?

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

All Customer Feedback is NOT Created Equal

Tuesday, September 10, 2013

Customer feedback is a gift-especially from disgruntled customers, because they represent customers that care enough to tell you what they really think rather than being frustratingly neutral in all of your surveys or worse, not responding at all.

So, how do you take advantage of it?

The first question you should ask is whether or not you SHOULD take advantage of it. Not all customer feedback is created equal. Oh, no. Some of your worst customers are price buyers and negotiate away all your profits, are massive credit risks, waste call center resources, and abuse your customer service reps. It might simply cost too much to satisfy them.

To protect your best customers AND your profits, you must do three things:

Prioritize Customers According To Value
Most everybody will agree that some customers are more valuable to your company than others. Guided by your overall customer strategy, use your CRM system to prioritize your customers according to their value to you. Metrics might include profitability, share of wallet, lifetime value, cost to serve, strategic impact, or other metrics.

Tier the Service Offering
Some customers will buy on price alone and purchase the cheapest products possible. World-class companies will tier their product offerings to address the low-price segment as well as a high-value segment. Service offerings must be tiered as well. If a customer isn’t willing to pay for additional service, it is critical that the additional service not be offered or delivered!

Address Disgruntled Customers According To Their Priority And Service Tier
If the disgruntled customer is a low priority and has paid for a lower-tier service plan, after offering to upgrade their service plan direct them to lesser expensive self-service or online channels. The goal is to do just enough to prevent a tarnished overall reputation. If however, the customer is “high net worth” (i.e., high-priority and on a high-service plan), you then must do everything you can in a high-touch fashion to resolve the customer’s complaint and ensure their perception of and loyalty to you is restored.

Here are five steps to do so:

  1. Understand the customers’ complaint
  2. Determine how the customer would want it resolved in an ideal world
  3. Develop and communicate an action plan
  4. Deliver on the action plan
  5. Communicate the results of the action plan

It should go without saying that if you don’t deliver on the plan after raising customer hopes, you ruin your future chances of getting this customer to collaborate with you, not to mention destroying loyalty and removing barriers to their defection.

Too often, the step that many companies leave out is that of communicating the fix/resolution to the customer. Even though you may have met or exceeded customer expectations, if you don’t communicate the resolution as promptly as possible, you might as well have outright ignored the customer from the outset.

Customer feedback (even the negative kind) is a gift if it comes from valuable customers and it should be welcomed and addressed immediately to protect your reputation, customer trust, and your revenue. Feedback from the rest of your customers might be interesting, but quite possibly irrelevant.

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Categories: Customer Centricity | Customer Loyalty | Customer Retention

How to win a customer for life—for only $12

Tuesday, July 30, 2013

I recently had a problem with a headset purchased nearly a year ago from Headsets.com. The automatically adjusting speaker volume resulted in numerous aborted calls. When I called to complain the rep said, “Mr. Bingham, your headset is just barely out of warranty.” I waited for the bad news. And then he surprised me by saying, “But I can imagine how frustrating that must be with such an important piece of equipment. I want you to be happy and I’m going to send out a replacement via FedEx. You should have it the day after tomorrow. Use the enclosed return label and send back the defective unit in the same box.” Later that day I received a shipping notification and a personal follow-up from the rep, and exactly as promised I received the replacement headset.

Such excellent care went above and beyond the minimum they were contractually required. But that wasn’t necessarily what won my loyalty. 

Within the box was a handful of Tootsie Rolls and a paper survey, the kind that everyone sends and surely nobody ever reads. Because they had done very well in meeting my needs and even exceeding my expectations, I gave them very high marks on the survey. Deciding to have a bit of fun with them, I answered their open-ended question, “What other suggestions do you have for us to improve?” with the tongue-in-cheek, “I don’t really care for Tootsie Rolls, but Jolly Ranchers, on the other hand…” 

Two days later I received another FedEx shipping notification. I was convinced that somehow their systems had screwed up and sent the notification in error, or I was going to have to waste my time calling them to return a duplicate headset. The package was much lighter than before. And it rattled. I opened it to find a very large handful of… Jolly Ranchers. 

Some employee read the survey, purchased a bag of Jolly Ranchers on their way home from work, and shipped a handful the next day. I had to laugh, as even though I know very well how this game is played, I felt an intense loyalty to them—I won’t even look anywhere else for phone/headset equipment. Not even for a better price. 

Rudy Vidal, CCO Council board member and originator of the Extreme Customer Loyalty initiative at Panasonic, found that the difference between second- and top-box loyalty scores was that customers felt they unexpectedly got something more. As he put it, “it didn’t matter if it was a new car or a lollipop!” 

Or in my case, a Jolly Rancher. Of course, the replacement headset may cost some in terms of time/effort to get warranty service from the manufacturer. But the real clincher for me was the fact that someone not only read the survey and took action—they showed thoughtfulness. The Jolly Ranchers probably cost $0.50, and shipping was $11.50. Of course they did everything better than right with the return. But they won my loyalty for $12. 

What are you doing to show your customers you are actually listening and responding to their needs and desires?

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Categories: Chief Customer Officer | Customer Centricity | Customer Loyalty