Managing a CCO
The first CCO was hired in 1999 at Texas Power and Light.
Perhaps the most difficult aspect of creating a Chief Customer Officer role is measuring results, which are less easily quantified than the results of traditional roles. Evaluation metrics must be clearly defined and agreed upon from the outset, lest the champion fail. For example, if the company is measured solely on revenue and the CCO is measured on customer loyalty, the measurements may well be at odds with each other. Nevertheless, the CCO must show tangible results to firmly establish value even in difficult times. The following are key performance metrics that CCOs should be measured against:
Revenue or Profitability Improvement
The vast majority of CCOs today are tied in some fashion to either the creation or preservation of revenue. Six years ago, many CCOs were embroiled in a battle with their Utopian customer view, taking care of customers because it was “the right thing to do.” But they couldn’t justify their existence. Without being measured on revenue or profit improvement their position was the first to be eliminated when revenue fell. CCOs should focus more on overall profitability improvement as the core KPI as such is the hallmark of a successful customer strategy and the key to competitive advantage.
Corporate Strategy Development/Execution
By definition, the CCO owns the voice of the customer and the shaping of corporate strategy. Thus, the more closely tied to this corporate strategy are the CCOs goals, the more likely he or she is to succeed.
Customer Strategy Development/Execution
The creation of and execution of customer strategy based on clear customer/market insight to drive profitable customer behavior is a hallmark of the most successful CCOs.
Creating a customer-centric culture and driving organizational accountability to customers is a critical measure of the success of the CCO. Motivating and holding people accountable ensures that customers are integral into everyone’s mindset and not just “someone else’s problem”.
Customer Loyalty Improvements
Loyalty improvement is a more tangible and easily measured proxy for the preceding metrics. Nearly all CCOs are measuring satisfaction and many are measuring loyalty on a regular basis. As previously mentioned, satisfaction alone is insufficient because satisfied customers defect, unlike loyal customers.