Forty-four percent have the title 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, andSIRVA‘s ( SIR – news – people ) Customer Experience, Operational Excellence, and Chief Innovation Officer.
Eighty-two percent of CCOs have spent two years or less in the position, and 55% have one year or less on the job. The majority are internal hires who have a significant history at their companies: median time at their firms among those we studied is nearly eight years. A third of the CCOs previously held division president or general manager roles, and almost as many worked in a marketing and/or sales position. On the flip side, about one-fourth of these CCOs formerly held operations positions.
Seventy-five percent of those we examined sit on the executive management team within the company.
Although all CCOs are charged with improving the customer experience, the structure of their organization depends on whether the position falls into one of two functional categories: operational or advisory. At firms like USAA, where the CCO has marketing, sales, support and distribution channels reporting into him/her, 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.
Both operational and advisory structures are viable for customer experience efforts. However, the structure will typically be determined depending on how large change efforts work best given a company’s personality, and the stage of maturity of these efforts. For example, at USAA customer experience started in more of an advisory type role and then transitioned to take on a more operational function. Wayne Peacock, the company’s CCO explained: “It seemed to us that it would be logical to operationalize our customer experience effort as opposed to trying to apply it from a small thought leadership team somewhere in the organization. We had that kind of thought leadership model informally for the past several years. But we are at a place now that if we want to do customer experience really well, we need to make it how we operate.”
To better understand why these companies decided to appoint CCOs, we asked about the breakthrough moments that lead to the creation of CCO positions. While we did hear a few stories involving an awakening brought about by a cataclysmic exodus of customers, several other themes emerged. These included a change in leadership, a desire to accelerate growth, a reaction to competitive forces, and a response to changes brought about by rapid growth.
For Boeing Training & Flight Services, the desire to accelerate growth could be fulfilled by reorganizing around the customer. CCO Roei Ganzarski defined their breakthrough moment as “the realization that, in order to be successful, we needed to be more focused on our customers than ever before. Our organizational culture wasn’t optimal to say the least. Our operations departments were focused on our products, our finance teams on collecting payments and our sales and business development teams focused on meeting short term revenue goals. But no one was looking at things from the customers’ perspective.” According to Ganzarski, this meant they were working inefficiently and making it hard for customers to work with them. “We knew we needed to change our culture to better serve the one reason we all exist–our customers. That’s when we decided to create the role and align all the market-facing groups under it to change our perspectives and focus.”
Despite the many successes resulting from the creation of a CCO role, it’s also important to recognize that a chief customer officer is not a silver bullet for a company’s customer experience problems. A CCO from a major software company 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, CEOs considering appointing 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.