The Rise of the CCO
Feb 7, 2008 4:00 AM PT
It wasn't so long ago that the chief technology officer was sequestered in the IT department, cut off for all intents and purposes from the hub of enterprise power. It is different now, of course: The CTO position has grown in visibility over the last 10 years and become more closely tied to that of the CEO.
It is understandable, then, that many customer advocates are wondering when -- or whether -- another relatively new C-level executive position will make that leap.
Several years ago, the chief customer officer burst onto the corporate scene with a few high-profile companies announcing appointments. Since then, a small but steady trickle of firms has continued the trend.
To name just a few recent examples: Marketer Harte-Hanks announced in February that it had named company veteran Jim Davis to the firm's first-ever position of chief customer officer, direct marketing. Hosted communication systems provider UCN appointed Rudy Vidal as EVP and chief customer officer, and digital marketing and technology firm Digitaria gave that title to Warren Raisch -- both in January.
Still, the CCO position seems to be a dead end in the corporate hierarchy, save for a few exceptions. The good news is that some industry watchers believe it will one day assume its rightful position in the top echelon of the enterprise.
Why Not Now?
One reason things went awry for the position early on is that there was confusion over just what the CCO job entailed, Mitchell Goozé, president and founder of Customer Manufacturing Group, told CRM Buyer.
"Is it another C-level position focusing on marketing or sales -- or both -- but with a different name?" he asked. "I have seen proposals for chief revenue officer as well, but at the end of the day, what are they responsible for that is not already covered by the CSO (chief sales officer) or the CMO (chief marketing officer)?"
The ideal definition of "CCO," said Mark Stevens, CEO of MSCO, a global marketing firm, is an executive "who goes to sleep every night concerned about the customer -- and nothing else."
It is that ungainly definition -- compared to the industry-speak that accompanies other C-level leadership roles -- that keeps many companies from developing a CCO position, Stevens told CRM Buyer.
Though cynical, Stevens' view is probably correct. It's easy to rattle off a handful of companies known for poor customer service; institutionalizing a position that puts the customer first at such firms is difficult to imagine.
Even companies that treat customers well rarely consider them first when designing a new service or product, Stevens pointed out.
"I will go into meetings with potential clients and there is always a whiteboard filled with schematics of some initiatives that are underway," but inevitably, he said, the customer is missing. "And there is never a salesperson in the room either -- or anyone who could put the customer in the process."
The CCO should be at the top of the corporate ladder, reporting to the CEO but with dotted-line responsibility to the board as well, Stevens suggested. "Just as the CFO must have a fiduciary responsibility to the shareholders, so too should the CCO be empowered to identify and protect the customer's interests."
If Not Now, When?
More firms will eventually come over to this point of view, Stevens predicted -- although it may take another period of prolonged cutbacks in consumer spending (brought on by a recession, perhaps) for companies to realize they must incorporate CCOs into their structural DNA. That's when the old industry maxim that it's more expensive to get new customers then keep the ones you have is likely to be dusted off and re-examined.
Firms will be willing to add the position of CCO to their internal infrastructure when they realize that it will multiply gross margins and profits, said Andy Birol, a small business growth consultant who has helped establish CCO positions at two firms.
"That only happens if you can get existing customers to buy more products and buy them more frequently," he told CRM Buyer.
Firms may move quietly in this direction over the next several years by establishing a de facto CCO position.
As SVP and general manager of OpSource, Steve Wagner lays claim to the CCO role, if not the title.
"Basically I own the customer here. If they don't succeed, we don't succeed," he told CRM Buyer.
That's more than just talk, he emphasized, because OpSource's revenue model sets its prices based on the prices of its customers; its revenues increase only as those of its customers increase.
"Part of my job description is to make the customer as sticky as I can," said Wagner. The firm does this through a variety of avenues from billing platforms tailored to its customers' needs to offering insight into what is happening in the markets that could affect customers.
The position of CCO grow in acceptance and adoption, Wagner maintained, and the duties expected of such an executive will morph along with its popularity.
"This is definitely a position that will evolve over the next 10 to 15 years," he said.