The Rise Of The Chief Customer Officer

Over the past five years, Forrester has observed an increase in the number of companies that have a single executive leading customer experience efforts across a business unit or an entire company. Whether firms call these individuals a chief customer officer (CCO) or give them some other label, these leaders sit at high levels of power at companies as diverse as Allstate, Dunkin’ Brands, Oracle, and USAA.

We define the CCO as: “A top executive with the mandate and power to design, orchestrate, and improve customer experiences across every customer interaction.”

Who are these new customer experience executives? Why do companies appoint them? And does your company need one? To answer these questions for a newly released report called “The Rise of the Chief Customer Officer,” we gathered data on 155 CCOs, surveyed a panel of customer experience decision-makers from large North American firms, and conducted in-depth interviews with CCOs from both B2C and B2B companies. Here are a few of the nuggets we found:

  • Title. Forty-four percent have the title of “chief customer officer,” 23% are called “chief client officer,” and 8% go by “chief experience officer.” The many, highly varied titles of the remaining 26% highlight the extreme difficulty of trying to spot CCO-level people by title alone, such as USAA’s “executive vice president, member experience” and Sirva’s “customer experience, operational excellence, and chief innovation officer.”
  • Tenure. Eighty-two percent of CCOs have spent two years or fewer in the position, and 55% have one year or less on the job. Eighty-three percent are internal hires who have a significant history at their companies: Median time at their firms among those we studied is nearly eight years. Thirty-three percent of the CCOs previously held division president or general manager roles, 31% previously held marketing positions, 31% previously held sales positions, and 24% formerly held operations positions.
  • Senior leaders. Seventy-five percent of those we examined sit on the executive management team within the company. 

CCOs’ organizations depended on whether the position was structured as an operational or advisory role. In firms like USAA where the CCO has marketing, sales, support, and distribution channels reporting into him, organizations can include thousands of people, and budgets can run to hundreds of millions of dollars. Conversely, in companies where the customer experience team acts in an advisory or consulting role to other parts of the organization, the CCO has a much smaller team and budget.

When we asked companies about the breakthrough moments that lead to the creation of a CCO position, we expected to hear stories involving an awakening brought about by a cataclysmic exodus of customers. While these stories do exist, several other themes also emerged including: a change in leadership, a desire to accelerate growth, a reaction to competitive forces, and a response to changes brought about by rapid growth.

A CCO is not a silver bullet for a company’s customer experience problems. One CCO provided this warning: “I worry about this as a role . . . it’s in vogue, and many companies will hire one because they think they need one. In three to five years, I’m afraid we may see lots of flameout because they weren’t given the seniority or authority to make a difference.” To avoid this fate, chief executive officers considering a CCO should establish three preconditions for success: a strategic mandate to differentiate based on customer experience, cultural maturity, and the creation of a viable position.

To find out more of what we learned about CCOs, check out "The Rise Of The Chief Customer Officer."

Comments

Thanks for Covering CCOs

Thank you so much for covering this topic. The customer has changed, but most organizations have not changed. The role of the CCO must be present and evolve in organizations.

I've been a marketing executive for a number of years and most recently heavily involved in social media. There are many debates where social belongs and I have argued that social is the responsibility of the CCO, but too often a CCO does not exist. Maybe more so as you have covered here, but we still need a big push in this direction.

Thanks and best,
"Social Steve"

CCOs and Social Media

Certainly the CCO should be involved in orchestrating the interactions with customers through social media, if not out-right owning it, just like all the other interaction channels. One of the most important things a CCO can do is to at least articulate a customer experience strategy, which in turn ought to provide guidance for a social media strategy (and any other emerging or existing channel for that matter). Arguably a social media strategy for a low-cost or commodity provider (e.g. Costco, Kohl's) looks a lot different than a product innovator (e.g. Nike, Apple). More often than not we see companies simply implement the latest new technology without thought to the holistic customer experience. The result is a company's version of Dissociative Identity Disorder (multiple personalities).

Thanks for the comment Steve.

It's about a culture of "customer-first"

Great piece, thank you. I find it encouraging to see the prominence a position like this is starting to get in larger firms, but also can't help wondering if it is in part a recognition that they have a bigger problem with the culture not being one that puts their customers first. If there were some way to break out the data to show companies that have a customer-focused culture, I'm willing to bet that the CCO role is something they may not have even thought of, or at least think may be a bit absurd.

If the CCO is able to make meaningful change that results in real impact that customers can see, then it is a worthwhile investment. The challenge is to avoid the trap of the rest of the C-Suite thinking that customers are "someone else's job". And if the only point of having this role is to say you've dedicated resources to Social Media, then it will also be too shortsighted to really make any real difference.

You're comment on . . . It's about a culture of "Customer First"

Could not agree with your comment more.
Corporate Culture, communication, optimum profitability and talent acquisition are the driving forces to extablish and maintain customer loyalty.
Thank you.
Alan J.S.

CCO - a holistic vision

All customers, regardless of class, are always looking for the best possible quality product and/or service at the lowest possible cost/price.
A positive customer experience results from to the "human" interaction, help, guidance and attention one gets to complete the "sales" transaction.
Social Media, CRM and Customer Syrvey Results are simply tools and feedback to help organizations realign their focus on the customer.
My vision of a CCO mandate is to ensure that every decision made in an organization (Talent Acquisition, Financial Margins, Supplier Selection, Supply Chain Orchestration, Consumer/Customer delivery (in store, at home or on the phone/web), is made with the final customer in mind, at all times.
Thank you.
Respectfully,
Alan J.S.