Chief Customer Officer: Overdue or not Needed?

A rapid increase in the number of Chief Customer Officers (CCOs) has occurred globally. There are now more than 450 CCOs, whereas only approximately 30 existed a decade ago. The purpose of this role is to promote customer-centric thinking and behavior throughout all areas of a company. However, the question arises: Do we really need a CCO to promote customer-orientation?

Certainly, organizations now have to know their customer’s needs better and generally become more customer-oriented. Amazon is a leading example, as shown in the letter sent by Jeff Brezos to his shareholders. As you can imagine, once a drone delivers your package only a few minutes after you ordered it, you will probably not want to use any other delivery method. Such radical innovations for the customer’s benefit pay off. Back in 2006, a study conducted by the University of Michigan showed that customer-centric S&P 500 companies have a growth rate of 144% annually, while other companies grow only 38%. More recent research supports these findings.

As a logical consequence, customer-centrism has become a high priority for companies across all industries. But the introduction of the additional layer of a CCO seems unneeded. The CCO’s basic function is to ensure that every employee’s behavior throughout the organization is oriented toward the customer – be it in research and development, presales, sales and marketing, service or production.

The Top-Down Approach Evokes Resistance

This top-down implementation of customer-centric behavior is, I would argue, not the right approach. It evokes resistance within teams and functions: “In an ivory tower, the CCO doesn’t understand our department-specific needs and requirements.” It also requires additional internal communication and alignment. People traditionally don’t like change and don’t want anyone to interfere with their work – especially someone for whom a specific position was created, which they view as far away from day-to-day business activities. To sum up: The introduction of the layer of a CCO creates complexity and resistance.

Rather than appointing a CCO, it is preferable to build on existing structures. To begin with, the CEO should internalize and demonstrate customer-oriented behavior. The very role of a CEO represents a customer-centric philosophy within a company. The CEO stimulates customer-oriented behavior, communicates best practices, and encourages dialog with his executive leadership team about customer-centrism.

Incorporate Customer-Centrism into Corporate Goals

In implementing customer-oriented behavior, marketing also performs a key role because of its traditional focus on customers’ behavior, needs, desires and satisfaction. The crucial function of marketing is to establish a framework in which experience with customer contact can be shared among people with various roles. This knowledge transfer includes the selection of IT tools for big-data analyses and collaboration across functions. This way, the entire organization continuously learns about the needs of its target groups.

Moreover, marketing, in collaboration with colleagues from other departments, defines KPIs for customer-centrism. These become integrated into goal agreements and performance reviews throughout the organization. For instance, remuneration models in sales would include not only leads and closing of deals, but also the customer’s willingness to repurchase or recommend a product. The incorporation of customer-centrism into research and development remuneration models could result in weighing current customer satisfaction against their response to previously developed products.

Once every employee benefits from customer-oriented behavior, the result is a cooperative, constructive and efficient customer-centric organization. The CEO leads this movement and marketing executes it by spreading this philosophy into other departments. Therefore, we have to ask if we need the specific role and special expertise of the CCO, or whether it is no longer useful.

What do you think?

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