CRM Claims the Corner Office
Customers now have a champion on the executive
Chief Customer Officer. CRM magazine reveals
the success strategies of three of these new leaders.
Customer Relationship Management, November 2004
The customer's time has come
Today, as organizations
increasingly recognize the value of being customer-centric, the
role of chief customer officer (CCO) is appearing on more and more
"Each year we're seeing an increasing number of CCOs being
added to corporate organizational structures, because we now have
a means to measure the return on such a position," says Liz
Roche, vice president and practice lead for CRM at META Group.
Roche started looking at chief customer officers back in 1999,
and had just a short list of "live" CCOs in 2001. "People
have been talking about it for a long time," she says. Now
they're taking action.
Today such organizations as Coca-Cola, Delta Air Lines, Hershey
Foods, Kellogg, Nautilus, and Sears all have chief customer officers.
To be successful a CCO must be an executive voice for the customer
and report directly to the CEO. According to Roche, CCOs will ensure
that managers and executives in an organization view CRM as critical. "The
CCO will be a horizontal overlay and will own the framework for
how different customer segments are treated," Roche says. "They
will serve as a rallying point for the customer as a design point,
as opposed to a line of business or department."
Too often, Roche says, CCOs are set up to fail because they're
not given actual responsibilities and spheres of authority. In
a 2004 IBM Business Consulting Services study, "CRM Done Right," organizations
where managers view CRM as useful, but not critical, to doing business
receive a negative 37 percent correlation to success. The study
also reports that organizations have a 25 percent to 60 percent
chance of success when corporate owns CRM, which Roche equates
to a CCO position.
"When CRM is viewed as critical, there is a positive 76
percent correlation to success," Roche says. "I bet if
you go back and look at the culture of successful companies and
how they view the CCO role, they've come to view it as critical
to their way of life."
Campbell Soup Company, Colorado Springs Utilities, and The Evercare
Company are three organizations that strongly believe in the power
of the CCO role. These CCOs' success strategies, and the positive
results their efforts have had on their firms and customers, follow.
Campbell Soup Company
"Campbell 's Valuing Customers. Customers Valuing Campbell
The framed value statement graces the wall of Campbell Soup Company's
New Jersey headquarters, and illustrates the firm's focus on customers.
Another sign of Campbell 's customer commitment is the CCO role.
CEO Douglas Conant created the chief customer officer position
in 2001 as one of his first hires for the executive leadership
team. CCO Denise Morrison came on board in 2003 from a general
management background at Kraft, and reports directly to Conant.
Morrison has five focus areas: She leads the global sales function
to deliver Campbell 's sales and profit plan; fosters a culture
that is consumer-centered and customer-focused; creates functional
excellence that includes customer intimacy and operations excellence;
attracts and develops the best sales talent; and develops customer
"We are in an era of fragmented consumers and consolidated
retailers, so the degree [to which] we can collaborate with our
customers at multiple levels in the company is really important," Morrison
says. "Having a CCO puts you in a better position to set that
The CCO has to be out speaking with customers and the industry
about key initiatives, according to Morrison. The Global Sales
Leadership Team is one way Campbell stays connected to its customers.
Morrison's reports represent 20 global sales forces, which conduct
joint business planning with customers.
Campbell also brings customers in to meet with marketing associates,
to learn of new products, and to try new recipes in the test kitchen
using Campbell 's products. "We give them an experience that
really takes a cross-functional team to pull together," Morrison
says. "I think our customers leave with a different view of
Morrison has noticed remarkable progress internally, with even
more customer focus than when she joined the company. Others, outside
the organization, have noticed as well. Earlier this year research
firm Cannondale Associates ranked Campbell ninth out of 100 for
best sales forces and best practices with the customer--the first
year it broke the top 10. The organization wasn't even "on
the Richter scale," before the CCO role in 2001, according
to Morrison. "I believe it's directly attributable to the
role of the CCO and the customer focus that role has been able
to bring to the company," Morrison says. "The company
works with the customer, and that has been a great evolution."
Colorado Springs Utilities
Three years ago Colorado Springs Utilities completely reorganized
from a product-based firm to a process-based organization. Out
of this change emerged a new position: chief customer officer.
This directive came from CEO Phillip Tollefson, and positioned
Springs Utilities to operate as a competitive business with both
other utilities and other service providers.
"We actually think our competitors aren't so much the utilities,
but the experiences customers have with everyone else," says
CCO Kelly Means. "Lands' End, Dillard's, Wal-Mart, or whoever
the customer determines is [the] standard for service. Customers
expect us to be as responsive, if not more so, than their other
favorite service providers."
Means reports directly to the utility's CEO, and his responsibilities
encompasses anything related to direct or indirect customers, including
reading meters, call center interactions, measurement of services,
billing issues, payment processing, and account management. Means's
position focuses on the customer at the executive level to provide
a voice on key issues, strategic planning, and budgeting.
Under Means's direction Springs Utilities has implemented several
strategies for servicing customers in a more flexible manner. For
example, employees are now cross-trained to handle customers' complete
needs, which eliminates the former practice of sending multiple
employees to the same customer site. As a result of strategies
like these, the field workforce achieved a 55 percent productivity
improvement in the past three years, and the call center saw a
45 percent boost in service levels.
To stay close to customers Springs Utilities collects comments
and concerns in an extensive, online customer-feedback system,
which is available to all employees. "Almost every group in
my organization has a way to get direct feedback from [its] customers
on what they thought of the service [employees] directly provided," Means
Means and his counterparts on the executive team take this feedback
to heart, and examine trends and changing customer expectations
monthly. Means tracks this information at least weekly.
Through Springs Utilities' performance management system Means
can follow 120 metrics across the entire division down to individual
performance. An incentive-based pay system reinforces the utility's
goals, and the organization focuses on hiring and retaining people
who have a passion and an interest in serving customers.
"It's a great place to be a chief customer officer, because
it's so natural to be customer-focused," Means says. "Our
owners are our customers."
The Evercare Company
The most likely place to find The Evercare Company CCO Jeff Neppl
is out meeting with customers.
"It's the only place where things happen--when you're out
talking with the customer," Neppl says. "We have a saying
in my organization: 'We want our face to the customer and our back
to the company.' We try as hard as we can to live that way."
Neppl joined consumer goods company Evercare in November 2003
as CCO. The role replaced the senior vice president of sales position.
CEO Nick McKay, whose parents founded the organization in 1956,
made the change to create even more focus on customers. Neppl says
that as a small company with only 300 employees, it was important
to start demonstrating that customer focus.
"If you're going to align with customers and partners, you've
got to start with what's important to them," Neppl says. "There
are very few products that we introduce that our customers were
not involved in in one way or another."
The CCO role reflects a new operating philosophy, rather than
any new systems initiatives relating to CRM. Neppl's directive
is simple: talking with customers. He goes out to understand major
customers' strategies and brings that back as key input in company
planning. Evercare's customers are retailers in the food, drug,
mass, club, and specialty markets.
"I'm talking nine to twelve months out with customers on
things we're starting to think about," Neppl says. "They
see great ideas every day, and just by spinning what we're trying
to do from another perspective, we pick up a lot of value. You
better learn to listen to your customers and work with them as
a true partner if you want to succeed long term."
The Evercare Company has achieved several milestones that Neppl
credits to the CCO role. First, the company is healthy and growing,
and recently one of the largest retailers in America recognized
Evercare as vendor of the year in one of its key business areas. "They
outlined Evercare's constant collaboration, and stated that Evercare
reacts quickly on a consistent basis to their input," Neppl
says. "That is really exciting for a smaller company like
Tale of Two CRM COOs
CRM vendors NuEdge Systems and Salesnet have created chief customer officer (CCO)
positions that report directly to the CEO. Although one CCO has been in place
for more than four years and another for just four months, both organizations
are truly practicing what they preach to their CRM customer base.
"That's really why we put the position in place in
the first place--it's all about putting our money where our
mouth is," says Ted Uczen, CCO at NuEdge Systems, a
CRM provider with
Uczen's executive-level focus on the customer has benefited
both the organization and its customers since he first became
CCO, in February 2000. The first step involved completely
reorganizing the company by building customer-facing groups.
Uczen says this allows for a tighter relationship with customers,
and provides better knowledge about their needs.
By the end of 2001 Uczen had developed a formalized customer
contract called Customer Care Guide. This service-level agreement
sets expectations, defines the level of partnership, and
helps start each relationship on solid ground.
NuEdge regularly solicits customer feedback through its
customer advisory board, which meets twice a year. This strategic
group provides input on product development issues. The organization
also conducted a user interface study by physically watching
how customers interact with its products.
"The customer gets a true voice in what's taking place
in the company," Uczen says. "They get opinion
into products and into how we grow as a company to better
serve their needs."
Retention numbers speak for themselves. In the first year
after putting the CCO position in place, NuEdge retained
95 percent of its customers. That number has hovered around
90 percent over the course of four years.
"We're really a partner with our customers, versus
someone just delivering a product," Uczen says. "That's
what CRM is about for us: driving the best possible relationship
with your customers to meet their needs, grow their business,
and ultimately grow your own business."
Similarly Salesnet created its CCO position in April 2004
to handle its dramatic growth and formalize its customer
contact. The organization has always followed a customer-focused
strategy, so "all doors were open" when Anthony
Nelson started as CCO, he says.
Nelson focuses his customer strategy around building an
online community for Salesnet customers. His first project,
an e-learning portal dubbed mySalesnet, empowers customers
to share best practices with the organization and other customers.
This online customer community will continue to evolve in
the next few quarters, according to Nelson.
"We recognize we'll only be successful if our customers
are successful," Nelson says. "We need to understand
their world, the business drivers, and devote resources at
the highest level."
Nelson says that having an executive position focused on the
customer as part of a CRM organization truly aligns Salesnet
and its business strategy with its customers. "We're pushing
hard to make sure their implementation and experience with
Salesnet are positive and successful ones," Nelson says. "At
the end of the day, the proof is in the pudding." --V.P.