Ashley Friedlein: Are chief customer officers a passing fad or the future?
The chief customer officer (CCO) has seen a dramatic rise in popularity in the past two years.
The US is leading the way but we are also seeing the trend in the UK with BA and John Lewis creating new roles. Last year the CCO Council’s annual Chief Customer Officer study showed continued growth in the number of CCOs at major corporations, with 10% of Fortune 500 companies having adopted the role – a percentage that jumps to 22% among the Fortune 100.
Seventy-seven per cent of brands answering a Gartner survey last year on marketing budgets say they now have a CCO or equivalent.
The impetus behind the rise of the CCO role is the desire for businesses to become ‘customer centric’ by structuring themselves around the customer. Although this might seem obvious to many, there was interesting research published in August in the Harvard Business Review, suggesting customer-centric organisational charts aren’t right for every company – particularly where there is high competitive intensity or low industry profitability. So perhaps not everyone can afford to be too customer-centric?
I recently spoke to CCOs to get their perspective on the role, its remit, and its future. The picture I got was remarkably consistent:
- All the CCOs I spoke to were appointed with a strategic agenda around driving growth and integrating channels and functions to become more customer-centric as businesses.
- All have significant teams and profit and loss responsibility.
- It varies a little by industry sector but the CCOs came from ‘multichannel’ roles, with experience of both ‘traditional’ and digital, mostly marketing or operational backgrounds. But none lacked serious digital credentials. In recent discussions with private equity, it is clear they are seeking to appoint CEOs who have strong digital experience.
- No organisations with CCOs I spoke to also have a CMO, or a chief digital officer (CDO). The CCOs all agreed that their remit included what a CDO would do and all had marketing reporting to them, usually via heads of various marketing functions.
- The CCOs have significant, if not complete, control of technology, data, digital, insight and innovation. In some cases, they are also responsible for customer service and, depending on company size, the physical operations (store, branch, call centre).
- The biggest challenges cited were how to achieve the organisational culture change towards customer-centricity.
- And a CCO’s next job? CEO. That was unanimous.
Having looked at these new roles (there’s also the chief marketing technologist, of course) being created as a result of digital transformation there is perhaps a pattern emerging that shows the level of maturity along the journey with the following five stages:
- Digital team – digital is separate, the most senior person is at least one step removed from the board.
- Digital figurehead – a board-level appointment, quite possibly a CDO, to show the level of strategic intent.
- Digital leader – a transforming CDO, or similar, who drives real change in digital capabilities, process and culture across the business.
- Business transformation – championed by the CEO and the board but likely spearheaded by a CCO, transforming not just ‘digital’ but all aspects of the business.
- Back to the future – senior job titles with ‘digital’ or ‘customer’ in them are no longer needed. Business as unusual.
In the end, great CEOs are also CCOs. For now it might be necessary to have job titles with ‘customer’ in them to show the intent and focus but I would wager they will fade away having peaked in the coming years.