The C-suite executive responsible for an amicable relationship between the customers and the organization is the Chief Customer Officer (CCO). A few decades ago, a role like this might have elicited some laughs or even plain derision, but things have changed drastically. Organizations know the value of a customer and would do everything in their power to please each one of them.
The CCO is responsible for many corporate activities that affect customers like user interface, billing, customer service, call centre, sales, user interface, post-sales customer support and fulfillment. Customers these days are looking for superior experiences and would leave you for a competitor if they know that you are not treating them well.
What is the importance of a Chief Customer Officer?
Most companies indulge only in lip service when it comes to providing customer service. It leaves the customers fuming and betrayed when they realize that the company’s messaging and constant ads about its superior service were all a farce. Unfortunately, most companies can be put in this bracket which doesn’t take care of its customers properly.
Even a job title like Chief Customer Officer can seem like vanity, but if you can equip them with the right resources and give them CCO metrics that they are responsible for, they might end up creating a dent that will bring joy to everyone involved. The onus should be to create real change and not to do it as a PSA.
Not only should the CCO be given resources and adequate authority, but also should be given a free hand to create real impact. The impact should be measurable, which is why we are trying to establish CCO metrics that will make sense for the organization.
What are the goals of the CCO?
#1 Establish benchmark for defining customer metrics:
The CCO should be able to establish customer metrics that are important enough to be benchmarked and improved upon based on the trends over time. The CCO metrics should be defined after constant deliberations with all the stakeholders involved. If you could get a few customers onboard to understand what they really care about, then the CCO metrics that you eventually chart out will become more impactful.
#2 Create goals on how to deliver value to customers:
Apart from finding CCO metrics, the CCO also needs to determine what are the experiences that a customer will feel valued for. They need to assess how best they can deliver this value to the customers. If there are some ideal ways to provide value, then that needs to be taken into account as well.
The CCO needs to find out which are the areas that deserve a lot of effort from the company’s side. As in, which are the areas that will have the most impact on the customer. Creating a common language that can be understood by everyone involved is also pivotal. Finding out which are the customers who deserve a lot of attention is also something that most seasoned CCOs will try to identify. Not all clients are equal if you look at it objectively, although that shouldn’t mean that someone should be treated less than ideally. But you can always focus on how much effort to concentrate on.
#3 Find common approach:
The problem with creating a new paradigm of work is that enforcing it can be a struggle. Many of the stakeholders might be struggling with not knowing how to use the resources effectively. They might not be adequately trained to handle the situation or not be in a position to give their best because of their current situation. This is where the mind of a seasoned CCO will help one and all.
#4 Create accountability:
Creating accountability and ensuring that everyone performs to their best should also be part of CCO metrics. Even across different departments, there should be checks and balances to ensure that everyone is made accountable. Encourage people to work in teams where there is constant sharing of information; working in silos will never help when you are running an organization where your main objective is to handle your customers like gold.
Establish accountability forums to get the most out of each other; that’s also one way to make sure that the CCO metrics are being adhered to by other employees and not just the CCO.
Make sure that the leadership team is involved at all stages of the ideation and decision-making process in establishing accountability. There should be clear messaging across all channels, and it should ensure a change in terms of culture too, not just with words.
Problems that most CCOs face:
Companies are going out of their way to create personalized experiences for their customers because they know the kind of impact that it will have on their bottom line. Providing world-class customer service is not just an obligation anymore, it is a necessity without which you will find it difficult to survive.
CCOs are mere PSA:
The problem with a fancy title like CCO is that it might just be used as a public service announcement to give the feeling that you care too. Unless there is a cultural need because the company really wants to give the best for its customers, titles such as CCO won’t work. There is no need for a CCO in the first place as one could do the same by creating procedures and processes that will always put the customer in the front.
CCOs don’t have real power:
If you call someone a C-suite executive, it implies that this person has a lot of power that can make real changes for the organization. Most C-suite executives like CEO, CTO, and CMO have clearly defined goals that will require a certain number of resources which makes it easy for them to go about their jobs. Unfortunately, that is not the case with a CCO, even establishing CCO metrics should be done from scratch in some cases.
CCOs steer CX in-charge away from the CX team:
Customer service is a task that requires a variety of resources and personnel who need to constantly update themselves with the latest technology trends and whatnot. It requires a posse and is rarely a one-person job. As long as the above is understood, there is no problem. But if the presence of a CCO makes the other employees feel as if they are no more expected to solve CX issues, then that is something that needs retrospection.
Chief Customer Officer Metrics to measure success
CCO metrics #1 Customer Lifetime Value:
The total profit that a customer brings to your company during the course of his or her lifetime is called Customer Lifetime Value or CLV. If your customer acquisition value is higher than CLV, then this particular customer is a loss to you. Customer acquisition costs include the cost that is associated with sales and marketing too.
How does CLV help CCOs and why is it an important CCO metric?
By knowing the CLV value, the CCO will be able to find how much effort is being put in terms of marketing for each customer. If they have a lot of customer data at their disposal, they can find out which segment of customers are the most profitable. It will help them re-focus more on a particular segment while reducing their efforts for others.
The CLV value is also used to predict the financial stability of SaaS businesses, including their valuation. CLV will also help you understand how to balance the time it takes to acquire a single customer and how it correlates with increasing profits if your churn rate is extremely high.
CCO metrics #2 Net Revenue Retention:
Net Revenue Retention or NRR is considered as the total revenue minus revenue churn, which includes things like reduction in subscription, cancellations, downgrades, contract expirations, etc.
NRR is one of the best indicators of a company’s success with its customers, isn’t it? Each cancellation or downgrade means that the customer is no longer as happy as they were with you earlier. It means that there is something wrong with the relationship in terms of expectations not getting fulfilled or being treated poorly. Even if their expectations are not being met, by providing superior service, you can still keep them as a customer.
When there is a high rate of churn, which reduces your net revenue retention, you need to be careful. It doesn’t mean that a problem is about to happen; instead, it means that there are problems already happening with your organization. This CCO metric and its performance will give you a picture of what went wrong and where exactly. By using the NRR CCO metric and monitoring it carefully, you can operate a healthy business.
CCO metrics #3 Net Promoter Score:
There is no standard on understanding customer satisfaction as much as Net Promoter Score (NPS). It asks an extremely simple question and it is popular because it is easy for customers to respond to and helps the organization by making it easy for them to bracket customers in different boxes.
“On a scale of 1 to 10, how likely are you to recommend our products and services to a friend or a colleague?”
When a customer gives you a 9 or 10, it means that they are extremely satisfied with your service and will even go out of your way to provide you referrals. Customers like these need to be encouraged more, and you should ensure that you put them into a customer loyalty program. These are called Promoters.
When a customer responds with a 7 or an 8, it means that they are mildly satisfied with your product but will jump ship if they find a better product at a better price or with more features. These types of customers are called Neutrals.
When a customer responds with anything between a 1 and 6, it means that they are not satisfied with your service at all. They are your Detractors.
NPS as a CCO metric is extremely important because it gives an idea to the CCO about what customers feel about the company. Promoters are those who are happy with you and will stay loyal to you. You can expect their continued service.
A neutral might not be terribly angry with you, but they are not too happy about using you as a vendor either. On the other hand, a Detractor is like a ticking time bomb, you do not want to incur their wrath. They hate doing business with you and are frustrated with the experience they have had with you so far. Before they badmouth your company on social media, the CCO should try to make things right with them.
NPS is a CCO metric that every organization should be carefully monitoring. If the NPS value keeps increasing over a period of time, then it means that your customers are feeling good doing business with you. If there is a decline in your NPS value, then it means that the number of satisfied customers decreased over that period of time.
CCO Metrics #4 Customer Health Score:
It is the process of evaluating the overall engagement of a customer with your company and how they are satisfied with your company is called Customer Health Score. It will help you understand how likely a customer is to renew their services with you after the service expiration date.
There are many ways in which the Customer Health Score is assessed. Rankings are implemented, like 1,2,3,4 or they are color-coded with each color indicating their health score. Green refers to good, yellows means average, and if the color is red, then it means poor health, according to this CCO metric.
The likelihood of renewal depends on a lot of factors, starting from how they were treated during the onboarding process to every interaction that they have had with your employees. That’s exactly why businesses need to ensure that the employees are trained perfectly well on how to treat customers.
Every single interaction touchpoint is important for customers and has a big influence on their decision to renew their services or not. A CCO needs to study each interaction touchpoint like a hawk to see what the customers feel at each touchpoint. There are various stages that each prospect goes through before they become a paid customer, and by the time they are one, they would have formed an opinion about the brand already.
CCO Metrics #5 Time to Value:
The time period between a user selecting your product and the moment they realize value from it, that’s called time to value. Here, value refers to the customer finding the product useful for the reason that they bought it in the first place. There are reasons why your customer chooses to buy your product, right?
The CCO’s objective is to make them use it successfully. The Time to Value CCO metric needs to be low. Why? Because you need to make, your customers realize the value of your product as soon as possible. Otherwise, they might lose interest in benefiting from it and not use it at all.
Through the use of proactive methods like automation or having an account manager in place, you need to get the customer to take action on the product so that they can benefit from it soon. By making them adopt your product, you are increasing your customer retention rate and customer loyalty.
When you improve the existing relationship between you two by helping customers realize their value, you will even be able to upsell and cross-sell to them much more easily. It is one of those CCO metrics that cannot be afforded to miss out on. For old customers, you can even send customer feedback surveys to understand how long they took to find value from your product.
CCO Metrics #6 Monthly Active Users (MAU):
The number of unique users that have interacted with your brand in the month is referred to as Monthly Active Users. This CCO metric is used to track monthly user engagement. If these numbers are low, then it means that there is little interest among customers to interact with your brand because of a number of reasons.
Maybe they expected better features, or they do not know how to use your product or were promised a completely different product and do not use the product anymore as they are disappointed. As a CCO, you need to find the exact scenario and use the results from the CCO metrics.
MAU includes both new users and existing users who have interacted earlier with the product. While there is a benchmark for MAU, you need to look at the context to get a better idea and look at the trends over a period of time to ascertain the number that is ideal for your business/product.
Your unique user is identified by an email ID/user ID or username, and it could be a paying or a non-paying customer. Analyzing the active users will give you an idea of how valuable the application is to these people. When you are tracking MAU, it is also possible to find out which are the features of your product that are used more frequently than the others. When you find out that the MAU value is decreasing, it also means that you will be able to predict your future customer retention rate or churn rate since all of these are connected very closely.
Winding it up..
Every customer service representative who has the greater interests of the customer is a potential CCO in the making. By trying to understand customers better, you will be able to find out what is going through their minds, how their opinions are formed and what you could do to gain their trust.
The CCO might sound like a fancy title, but if used effectively, you can find out deeper layers of your customers that you might have never understood earlier at all. It will help you provide impeccable service to each of the customers, which will make you get the ideal numbers for all the above CCO metrics.
The CCO metrics that we have discussed in this article are pivotal for the existence of your brand. If your reaction to the previous statement was disbelief, then we need to stress the fact that your customers make your brand. If they are not taken care of and given the respect that they deserve, you can expect them to abandon you for a direct competitor of yours.
One of the best ways to understand customers is to send customer service feedback forms with the help of an online survey tool like SurveySparrow. Instead of relying on guess-work, you can easily tap into the minds of your customers and ask them direct questions which will elicit the answers that you are looking for.