Why do customer efforts crash and burn? Are you wrestling with customer leadership? What are you doing to match the commitment to the customer to the actions of the organization? And, is the CCO the solution?
Such questions are asked (and answered) in Jeanne Bliss's new book, Chief Customer Officer, a highly energetic, tell-it-like-it-is treatise on how to create and execute a customer-centric agenda. Her passion and battle scars are threaded throughout the book. Her recommendations have been vetted and tested in the real world, at some of the largest, most powerful companies in the world—Microsoft, Lands End, Allstate Insurance, among others.
As Bliss writes in the introduction, the book is about "reality." How to get the "customer thing" beyond cool coffee mugs, creative T-shirts, and rah-rah kickoffs. In a nutshell, the book is a road map to critically examining your own organization to determine whether a chief customer officer makes sense and the customer thing is achievable and worth it.
The book, summarized here for MarketingProfs readers, can help executives to better evaluate their personal role in driving the customer agenda, while helping functional leaders to create alliances and coalitions in executing some difficult cross-company changes.
Why Customer Efforts Crash and Burn
The author presents some compelling data that is inconsistent with companies' alleged focus on the customer. Some damaging statistics include the following:
- Up to two-thirds of all customers leave due to poor customer service.
- Between 32% and 94% of all customers right now are thinking of leaving.
Bliss writes that CEOs who list customer loyalty and retention as a chief concern are more likely to have a higher return on assets than those who don't. Identifying, articulating, and executing the customer agenda has a persuasive business case.
The first step in effectively executing the customer agenda is to clearly understand the power core.
Bliss writes that a company's power core is typically its strongest skill set or the area most comfortable for senior executives. Understanding the power core source and its impact is important in framing how to proceed with the customer work. It's axiomatic that people will perform and invest in areas where the enthusiasm is highest, the understanding the easiest, and the rewards the greatest. The author writes about six common power cores:
- Product Power Core. Product development is the focus. The product becomes the de facto representation of the company in the marketplace and boardroom.
- Marketing Power Core. Marketing defines the tenor and tone of the relationship with customers. The brand is emphasized.
- Sales Power Core. Sales targets, the numbers, and performance are the key metrics and foci.
- Vertical Business Power Core. The business discipline is focused on the vertical industry, such as insurance or manufacturing, and the metrics and processes wrap around that emphasis.
- Information Technology (IT) Power Core. IT has been given the power to set the priorities of the organization, and the bulk of spending revolves around its projects.
- Customer Power Core. Company decisions are all about understanding what will drive the greatest value to customers in the short term and long term.
Bliss is unequivocal in writing that you shouldn't try to change the power core; instead, dance with it. The answer is to "know what the power core is," who drives it, and how to partner with it to drive the customer agenda. She examines each power core area to detail its strengths, weaknesses, and hot spots. Bliss provides a pragmatic road map for effectively navigating each type of power core.
The author outlines two steps in planning your power core strategy. The first step is to identify the power core. The questions that Bliss outlines to identify the power core are elegantly simple, and are often the hardest to answer. The answers, or lack thereof, will provide insight into many areas of the company. These questions are a way to review the three dimensions of the business.
- How does your company define success?
a. What are the areas of strength the company prides itself in?
b. What part of the company did the leaders of the company come from?
- What does it excel at?
a. What competencies are stressed?
b. What competencies do the "stars" possess?
- What are the people rewarded for?
a. What metrics are called for the most in meetings and during reviews?
b. What are memos, pep rallies, and bonuses about?
The second step in developing the power core strategy is to assess it and, subsequently, the work ahead. Assessing the power core includes evaluating areas such as the following:
- Product, sales, services based on customer needs
- Integrated customer experience
- Metrics
- Recognition
- Handoffs between silos
- Use of customer feedback
You want to know the strengths and vulnerabilities for each area, as well as its impact on the power core. Last, it's important to understand the company's overall "distance" from the customer and how much work is ahead to get it closer. Part of that work is to assess the extent of company silos.
Most large organizations have a lot of silos, resulting in a lack of collaboration inside the "corporate machine." Recognition is often within the individual silos. Bliss writes that "our inability to work together has our customers voting with their feet." She outlines three things we just can't seem to coordinate among the silos:
- Motivation—the beacons people follow. People want to know what is of the greatest importance to the organization and want to be a part of it.
- Metrics—How success is defined. Quite simply, the metrics that are called for the most by leaders send a crystal clear message about where people should focus their efforts.
- Mechanics—The customer experience across the silos. The mechanics are all about the friction in working across company silos and how customers effectively traverse (or get dropped) across the organization.
The author delves deep into each of the three categories . There are various steps you can take to shift motivation, redefine the metrics, and improve the mechanics.
Wrestling With Customer Leadership
Bliss writes bluntly that the customer agenda will go nowhere without two key leadership attributes: (1) gut, or the ability to know the higher purpose for customers; and (2) guts, the ability to make the customer agenda a priority of the organization.
In a nutshell, there is a lot of "writing on the wall" and symbolism about whether the customer agenda is a "checkbox exercise" or something that leadership is committed to. If a company doesn't assign significant resources to it, doesn't really have a business case or strong "why" statement, and the metrics don't really change going forward, all the talk in the world doesn't make up for the lack of true, tangible commitment.
Bliss writes that championing the customer agenda is not for the "mild-hearted or the quarterly inclined." None other than the CEO needs to be an evangelist for the customer agenda. The CEO needs to help keep the customer top-of-mind in the company, while holding people accountable for their performance with customers. It can't be seen as a priority of the month.
At a minimum, leaders should ask and answer the following questions—a subset of what's in the book:
- Do you have it clear in your mind what you're trying to accomplish?
- Is the company willing to commit the time and resources to make this happen?
- Are you ready to push hard for strategic customer metrics?
- Do you have the focus to move the work along to define the differentiated value you want to deliver?
Bliss's discussion of guerrilla metrics is quite interesting and refreshing. With all the scorecards, surveys, and reports out there, you would think that companies would have a good handle on customer relationships and profitability. Most don't. They are awash in metrics and cross-tabs and often have competing findings and accountabilities. Many times, they do nothing.
The author describes guerrilla metrics as those that will "simplify, clarify, and kick-start the customer effort." Bliss is all about being parsimonious at first—just start counting customers. We often miss the common sense about customers, which she feels has to be said:
- If you lose more customers than you keep, this is not good.
- If you don't know how many you're losing versus those you're keeping, this is even worse.
- If no one's asking the question or caring about the answer, you're sliding down a slippery slope.
In getting down to customer basics, Bliss wants to ask you the following:
- Are you counting your customers?
- Do you know the new ones and the old ones?
- Do you know which stay and which leave?
- Do you know why they're coming and going?
- Do you know which ones came because someone told them to?
- Do you know how many people are calling your service centers and why they're calling?
As we all know, there is no getting away from good, solid, hard-to-answer questions. As an old proverb states: "He who asks questions cannot avoid the answers." The difference between success and failure often comes down to the questions we ask. It's clear that Bliss wants us to ask the tough questions about customers.
The author categorizes the guerrilla metrics into five "buckets":
- New customers—volume and value. There are two key questions here: (1) How many new customers did you reel in this month or quarter or year? (2) What is their potential contribution (could do some sort of lifetime value calculation)?
- Lost customers—volume and value and reasons why. Bliss touts something called a "customer loss review," which requires that you compile data on customer defections and their root causes. She writes that the ROI of the loss review process is "one of the best in terms of driving action."
- Renewals with reasons. You first need to define what "renew" means to your business and then start measuring it. Bliss stresses that you should keep it simple and just start.
- Revenue and profitability by customer group. You can segment your customers by buying patterns as well as profitability. You want to look at the movement from one group to another over time.
- Referrals by customer group. A customer referral is the ultimate compliment. Your customers become your marketing department. According to Bliss, "It's the final frontier of loyalty."
Bliss suggests creating a "customer tote board" to showcase how your organization is doing on the guerrilla metrics. They shouldn't be buried in a report. If they are to become part of the everyday language, they need to be front-and-center and top-of-mind.
All of the metrics, however, won't mean anything without accountability. Bliss writes that accountability is the "sticking point for this work." She compares managing accountability to "herding cats," a tough job indeed. She uses the word CATS as an acronym for assessing customer accountability:
- Customers gained and lost as a result of the company's actions—the guerilla metrics
- Ability to serve customers and rescue customers at risk—service performance
- Targeting and resolving issue driving customers away—customer listening metrics
- Silo connectivity and metrics for optimum experience delivery—operational metrics
Bliss explores each area of the CATS acronym and gives suggestions in terms of identifying issues, evaluating causes, and taking action. She then goes on to flesh out how to create an accountability agenda.
The really great customer companies, according to Bliss, do not relegate the customer to a single meeting or agenda item. The customer is part of nearly every conversation. The author outlines four accountability actions that are useful in advancing and executing the customer agenda or any change effort for that matter:
- Customer accountability room. The walls are covered with priority metrics, with each wall showing some of the CATS-type metrics. At regular intervals, the operational leaders and president meet in the room and ask questions of the data—Why? When will it get better? How will it be improved?
- The quarterly report. Create a quarterly report documenting what's in the customer accountability room.
- Put the guerrilla metrics front and center. The metrics must become part of the fiber of the business and just as important as quarterly sales goals.
- Enforce creation of an annual customer plan. Ensure there are public commitments around the customer agenda and actions.
The last chapter of this section is about conducting a reality-check audit, which takes the concepts and ideas of the first six chapters and rolls them up into a concise to-do list. According to Bliss, the audit is in actuality the to-do list to leading and managing the customer effort. The audit will also allow you to measure what work has been done to date and what still needs to be accomplished.
The audit is composed of 58 questions and covers 7 dimensions of building customer relationships and managing customer profitability. The output of the audit might look something like the following figures:
| Reality Check Audit Category | Company Performance for Each Category |
| Customer Leadership | |
| Customer Listening | |
| Metrics | |
| Accountability and Taking Action | |
| Unified Customer Experience | |
| Enabling Service Delivery | |
| Motivation and Recognition |
Bliss recommends that taking the audit with your leaders is a good place to begin the customer agenda work. It helps to define the scale of the undertaking and demystifies the actions that are necessary to make a commitment to effective customer management. She then goes on to assess whether a CCO or other customer champion is required for successfully advancing the customer agenda in your organization.
Is a Chief Customer Officer the Solution?
Bliss is quite forthright in stating that "throwing head count at the customer challenge is not necessarily the automatic solution." You can use the results of the reality audit to critically examine whether a CCO is appropriate and necessary.
Bliss outlines some key assessment questions you can ask to determine whether you need a CCO. A subset of the questions (some are paraphrased) are below:
- What is the focus of the organization?
- Is there someone in the company who clarifies what to accomplish with customers?
- Is there a clear process for driving alignment for what will be accomplished with customers?
- Is there a road map for the customer work and a way to measure progress?
- Appropriate resources are allocated to make a real difference to customers?
- Is the work considered attainable?
Bliss helps you to analyze your answers to each of those questions, plus others. She shares her experiences in terms of the best next steps and potential hurdles. If it's not the right time to advance the customer agenda, you can begin to at least "plant seeds" and try to bring the "voice of the customer" into the organization. Bliss suggests obtaining taped customer conversations (with customers' permission) to bring to management meetings. Reports are great, but they "can't take the place of live customer voices and contact," she writes.
Bliss outlines some important attributes in ensuring that the role is a success, if you decide to create a CCO position. Like most good leaders, the person needs to be passionate and persistent, able to give power away, and highly actionable. As Bliss writes, and which is relevant to every change initiative, "it's clear action that will finally signal to them [employees] that this is the real thing."
The last part of driving the customer agenda and a CCO-type role is to create an effective structure for change. Bliss discusses the various functions or areas where the customer work can emanate from. The areas include:
- Office of the president. If there's commitment here, this is the ideal place.
- Marketing. Need a strong leader here to overcome turf battles and to execute the cross-company change management efforts.
- Customer service. Need a highly respected leader here to make it work.
- Companywide hoopla. Initial hoopla is often followed by unclear accountability and outcomes.
- Grassroots uproar. Still need the right exposure and senior-level commitment to make it work.
The author provides insights into the pros and cons for each of those areas. She then discusses the various organizational structures that could work for a CCO position. For example, would you want a staff or line leader with a dedicated or dispersed team?
The last section and chapter of the book is about true life stories of CCOs. Bliss asks questions around why the position was created, key challenges and accomplishments, and measuring performance. She spoke to companies such as Nautilus, Cisco Systems, and Monster.com, among others (six total).
The epilogue includes a brief visual summary of the book, along with some of Bliss's final words. In the afterword, Jill Griffin, the author of Customer Loyalty: How to Earn It, How to Keep It, writes that having the information in the book and not acting on it is a lot like sitting on a winning lottery ticket and not cashing it in. In both cases, she writes, the only way to get the reward is to take action. I can't agree more.
See www.customerbliss.com for additional information about the book, including a toolkit, the reality check audit, and a CCO blog.
