Customer Loyalty and Employee Engagement
Posts tagged CCO
Accounting for Customer Experience
Jan 11th
A recent report by the Temkin Group found that only 17% of respondents believed that the executives at their company regularly prioritize long-term customer loyalty over short-term financial results. (Full report available here)
There are plenty of reasons why companies get stuck in short-term thinking, including competing priorities, pressure from investors to deliver quarterly results, and misaligned compensation plans. But I believe that much of the blame for under-investment in customer loyalty lies squarely on us – Customer Experience leaders – and stems from a lack of Finance and Accounting knowledge within our field.
Most Customer Experience professionals connect with their work on an emotional level. Since we are all customers ourselves, it is very easy to internalize the customer experience mission and make it personal. We aren’t just punching a clock – we are helping to rid the world of sub-standard customer service.
We spend much of our time in a bubble with like-minded souls – going to Customer Loyalty conferences, retweeting articles about Zappos, reading books about Nordstrom, and networking with people who eat, sleep, and breathe customer experience.
This emotional attachment to the mission of customer experience serves us well when it is time to inspire employees, transform cultures, and win customers. But it does us no favors in the board room unless it is balanced with the ability to articulate the value of customer loyalty in terms of cold hard cash.
Too often, customer experience initiatives are pitched on a “mom and apple pie” platform. The business case (if you can even call it that) consists of a Seth Godin quote, an infographic illustrating the cliché about dissatisfied customers telling 10 people, and a screenshot of someone trashing your brand on Twitter. Undoubtedly, the whole thing falls apart as soon as someone asks to see the underlying financials.
Likewise, well meaning Customer Experience leaders find themselves unable to prevent the installation of Bad Profits because they show up to the meeting armed with anecdotes, not spreadsheets.
It is not uncommon to hear Customer Experience professionals at networking events ask questions like:
- “How can I get my CEO/COO/CFO to understand the importance of our customer experience initiatives?”
- “How can I present an argument against short-sighted thinking like outsourcing, nuisance fees, and other bad profits?”
- “Why does my program budget keep getting slashed?”
To Customer Experience leaders who are currently struggling with these issues, I’d highly advise that you put down your tattered copy of Raving Fans and start reacquainting yourself with the dark arts of Finance and Accounting. Here are some great free resources from MIT’s Sloan School of Management to get you started:
Introduction to Financial and Managerial Accounting
Economic Analysis for Business Decisions
As you start to learn to articulate the business case for customer loyalty in financial terms, you might just discover that you and your CFO were actually on the same page the whole time – you just needed to learn to speak their language.
Defining the role of the Chief Customer Officer
May 9th
I’m sometimes envious of my mailman, Steve. Now, don’t get me wrong – I have absolutely no desire whatsoever to drive around delivering the mail all day. By almost every measure, my job is infinitely cushier than that of the average postal carrier. I’m not outside in rain or sleet or dark of night carrying heavy parcels up winding driveways. Sure, there are days when I’m in 12 hours of meetings, but I’ve never had to run from a stray dog during a planning session (yet.)
But still, there is one area where Steve has a distinct advantage. His friends and family most likely understand what it is that he does all day. Mine? Not so much.
Ross: What is Chandler Bing’s job?
Rachel: Oh! Oh gosh, it has something to do with numbers.
Monica: And processing!
Rachel: Oh, well… and he carries a briefcase!
Ross: Ten seconds. You need this or you lose the game.
Monica: It’s, um, it has something to do with transponding.
Rachel: Oh, oh, oh, he’s a transpons… transponster!
Monica: That’s not even a word!Friends, Season 4 Episode 12
Whose fault is it that none of my friends and family know what I do all day? Easy – it’s my fault. When I describe what I do, I try to make it sound impressive instead of making it understandable – and I’m not alone in doing so.
Last year the Chief Customer Officer Council got together and defined the role of CCO as ” An executive that provides the comprehensive and authoritative view of the customer and creates corporate and customer strategy at the highest levels of the company to maximize customer acquisition, retention, and profitability”.
Did your eyes glaze over when reading that definition? I know mine did. I’m certainly not going to respond to the ubiquitous “So, what do you do?” question at a cocktail party with “I provide a comprehensive and authoritative view …” unless I’m trying to bring the conversation to an abrupt and awkward conclusion.
I’ve come to determine that, too often, in the corporate world people describe their jobs with way too much precision and technical jargon for fear that if they oversimplify, the person they are talking with won’t be suitably impressed with just how important their job is. But imagine if my mailman told people that he facilitates the transmission of tangible objects from sender to receiver – would you be impressed, or just confused?
From now on, when someone asks what it is that a CCO does, instead of hemming and hawing about maximizing customer lifetime value and analyzing qualitative feedback, I’m just going to say:
“It’s pretty simple – when a customer loves a company they stay longer, spend more, and tell all of their friends. I make sure we are doing the things it takes to maximize the customers who love us and minimize the customers who dislike us.”
I think Steve would approve.