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Posted by Paul Hagen on January 24, 2011
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:
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."
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