The position of chief
officer (CCO) is becoming "a staple of modern business" as companies look for new ways to sell, increase revenues and beat the competition, according to the latest Chief Customer Officer Study from the CCO Council
Now in its third year, the study finds that the CCO role is taking on increasing importance, particularly in the technology industry. In fact, there are more CCOs working in the technology sector than in any other industry, the report noted. Among the reasons for this are increasingly tech-savvy customers, accelerating innovation and long processes with lots of opportunities for missteps.
"The decidedly uneven distribution of CCOs in technology industries is a reflection of and a response to the challenges within the industry," the study said. "Historically, technology companies are famous for ignoring customer needs and for providing complexity at the expense of usability and feature explosion at the expense of simplicity."
The Challenge: Engaging Customers Earlier
We reached out to Curtis Bingham, founder and executive director of the CCO Council, to learn more about how the corporate position is changing. He said the CCO's role is becomingly increasingly vital as products quickly become commoditized and customers can access a vast amount of information before ever making the decision to buy.
"Marketers no longer dominate the conversation," Bingham said. In fact, he said, with the amount of knowledge customers typically have before their first contact with a company, salespeople in some cases are "just relegated to being order takers."
While businesses today can gather ever-more and analytics-driven insights about customer wants and preferences, they need to engage with prospects much earlier in the sales process and appeal to buyers on much more than price alone, Bingham said. That's why the CCO's role is evolving from a "terminal position" -- one that more often led straight to retirement rather than promotion -- to one with business-critical responsibilities.
Of the Fortune 100 companies, 22 percent now employ a CCO or a top decision-maker with CCO-type responsibilities, according to the 2014 CCO study. Worldwide, there are now 408 active CCOs, with 343 of those in the U.S. However, their influence is also growing globally. The UK is likely to see the next wave of CCO growth, Bingham said, and the Middle East is another region that can expect fast development.
Customers as 'Strategic Assets'
The CCO's greatest responsibility is to "increase the overall value of the customer as a strategic asset," Bingham said. "The best CCOs are identifying the most valuable and most profitable customers and (helping companies) to go find more of them."
He cited the example of Oracle CCO Jeb Dasteel, who earned the CCO Council's officer of the year award in 2009. The CCO role was the "missing piece of Oracle's strategy," according to Oracle's then-President Charles Phillips. With Dasteel taking on that position, Oracle was able to achieve "nearly 100% customer retention," even during a period that saw the business acquire 55 new companies.
Perhaps not surprisingly, there was a burst of new CCO hiring in 2008 as companies struggled to retain customers in the face of a steep and sudden recession, the CCO study said. While the growth rate has slowed since then, certain sectors are seeing greater-than-average growth. The healthcare and insurance industries, for example, are finding an increased need to focus on customer experience with implementation of the Affordable Care Act.
As the CCO's role continues to evolve, Bingham said, companies could move beyond, for example, engaging customers through social media to even more high-touch strategies like bringing customers into the corporate decision-making process, helping firms to develop innovations, and even setting business strategies.
"When we look at the CCO, some people are saying that customer experience is the most important part of their role," Bingham said. "Really, it's only a small part. The focus needs to be on customer engagement."