Information for CEOs and Board Members
The first CCO was hired in 1999 at Texas Power and Light.
While the reasons are varied, CEOs hire a CCO for one of three primary reasons.
To address unresolved and chronic customer crises
In 2001, Sun Microsystems had a rude awakening. A quality problem had plagued them for months. It was crippling customers’ mission-critical operations. A large number of quality initiatives were launched but none were fixing the problem. Marissa Peterson was tapped to become the Chief Customer Advocate with a clear mandate to find and eradicate the root cause of these issues. Employing Sigma techniques, she and her team were hugely successful in a relatively short period of time.
Like Sun, companies experiencing unresolved customer crises that they have not been successful in fixing on their own, such as extremely dissatisfied customers due to chronic product issues, customer lawsuits arising from unmet expectations, etc. turn to a CCO to focus their customer initiatives and drive immediate results.
To create competitive advantage and help acquire new customers
In small and mid-cap companies, CEOs recognize that they need to differentiate themselves from their (oft-times larger) competitors. They appoint a CCO to prove to their customers and prospects that they are singularly committed to customer success. Many a deal has been inked after a visit from the Chief Customer Officer.
To better retain existing customers
CEOs recognize they can grow revenue & profitability by reducing customer churn. Customers were defecting, revenues were plummeting. The Chief Customer Officer was able to provide operational stability by focusing on retaining customers to protect revenue. Rudy Vidal is the CCO of inContact which provides contactcenter software under the Software as a Service (SAAS) model, meaning that they pay for web-based software on a monthly basis, promised to defend 80% of his company’s recurring revenue by focusing on making these customers extremely loyal. In doing so, he was able to smooth out variability in revenue fluctuations and ensure the company could grow intelligently.
Interestingly, there are a handful of CCOs that were hired by a newly-appointed CEO that had come from a highly-customer-centric company. These CEOs hired the CCO as part of their overall growth strategy to change culture and help reach revenue, margin, and operational goals.