Part I: The Where, What, How & Why Behind Chief Customer Officers

If you’re in a customer-facing industry of any kind, it won’t come as a surprise that the undercurrent of customer obsession is starting to make bigger waves. It’s increasingly common to see customer-obsessed executives become newly minted Chief Customer Officers, leading the Success, Services and Support orgs in the SaaS space. As the number of CCOs climb, it’s important to understand where they’re making an impact on the industry. Just what is their charge, and how imperative are these roles for success? Is there even a difference between Chief Customer Officers and Chief Experience Officers? Short answer – it’s all evolving, and fast.

Where are Chief Customer Officers making an impact on the SaaS industry and what’s driving it? I was recently networking with one of the top three executive recruiting firms in the world and they’ve seen a 5x increase in CCO retained searches in the last two years. CCOs are not only becoming more impactful within their own organizations but also across industries via board positions. In fact, several venture capital firms I've chatted with are seeing so much talent competition over CCO searches that they’re beginning to curate their search and placement data around these positions, like they do for CEO, CFO, CRO and CPO roles. Frankly, there aren’t a ton of roles that board members have a keen interest in when advising the C-Suite operators of growing firms, but Chief Customer Officers are gaining more and more of that interest and it’s serving their firms well.

We’re living in a renewals-based world where customers must choose to continue being your customer every year (or even every month). As a result, retention has become increasingly valued by investors. When investors are determining your firm’s value based on customers staying and growing with you, it’s actually a bigger  discussion around how to accurately gauge the health of your existing customers. This is the heart of what’s driving CCO’s increasing emergence in the spotlight; a spotlight that has traditionally been focused on their counterparts from sales and client acquisition, namely Chief Revenue Officers (CROs). This was recently discussed in a colleague’s post here discussing the current downturn further increasing the importance of retaining the customers you have. 

How imperative are Chief Customer Officers for the success of an organization?  There’s no one size fits all answer, but generally speaking, customers value brands based on their experience across every touchpoint in the customer journey. It’s no longer strictly about the product, but rather about how the overall brand experience stacks up against other top options and the exchange of effort to benefit. Delivering a consistent, delightful experience is the key to customer retention and it’s the job of the CCO to lead the charge. It’s worth noting that this doesn’t happen overnight by simply appointing or adding a CCO – it takes years of truly listening to your customers and learning about their experiences before you can earnestly lead them along a path of success. But often the years of feedback, usage data, and ongoing product telemetry signal is there, and a CCO can finally separate the signal from the noise and drive dynamic board level discussions around topics such as:  

• Who are our most successful customers, and what does their path to advancement and maturity look like?
• How do we refine the mountain of value their usage drives, and map it to major business objectives and market themes?
• What are the meaningful moments of tech and human intervention needed from Growth/Services/Success/Support and Partner organizations?

The goal is ultimately to act as the conductor across the symphony of specialist musicians playing the customer experience soundtrack. If you can’t deliver an excellent experience and delight your customers, you won’t achieve adoption, let alone retention or growth. 

What is a Chief Customer Officer, really? At the most basic level, a Chief Customer Officer is the greatest champion of the customer. They marshal Services, Success and Support teams and advocate with Product and Engineering. CCOs are innovative, diplomatic, and data-driven folks who are skilled at creating a cohesive, customer-first mentality that permeates across teams and channels. In short, they’re responsible for orienting and prioritizing the business around customers – specifically, customer retention. While acquisition remains important, retention is equally if not more so. It’s crucial for CCOs to keep retention at the forefront and have their finger always on the pulse of the lifetime value of a customer, which should be measured against the cost of acquiring them (LTV:CAC), in order to foster growth.

To break it down, the average lifetime value of a customer is the average annual (or monthly) revenue per customer adjusted for churn (those who leave you) and gross margin. The cost of acquiring a customer is the sum of all marketing and sales expenses over a given period, divided by the number of new customers added during that same period. This calculation is critical for CCOs and their organizations as individual customers rise in their power. Customers have more autonomy and more choice than ever before, and it’s the CCO’s job to understand the value and provide guidance to their organizations on how to best retain their customers. Like changing any outcome, the earlier you go to the source of decisions, the more impact you’ll have. So, a CCO’s guidance threads across the entire value chain from what we build (Product), to how we build interest and intent (Marketing), to the specific customer expectations of usage (Pre-Sales), at the very moment they become a customer (new Logo Sales) or grow their relationship with you (Expansion Sales). The operational metrics that CCOs manage are similarly diverse, such as CSAT, NPS, Allocation, Usage, Health, Services Attach, Partner Experience, and yes, lagging metrics such as NDRR, Losses and Renewals.

Is there a difference between a Chief Customer Officer and Chief Experience Officer? In SaaS, not really. The role of the Chief Customer Officer is often interchangeable with that of the Chief Experience Officer (CXO). Both facilitate positive customer experiences for their brands in the context of achieving value through adoption. A CXO generally oversees customer facing roles like customer success managers, UX professionals, and support, while CCOs need full service delivery teams. They are both decision-makers who help solidify the customer acquisition and retention process, and are common within SaaS organizations. The CXO title is often found within more “tech touch” go-to-market motions and may be placed closer to marketing or product development, while the CCO encompasses these aspects and also goes up market to larger customer spend segments. The CCO is a full fledged member of revenue-outcomes reporting to the President or CEO.

No matter what you call it, the goal remains the same – to lead customers with confidence; taking years of learning about how your most successful customers became that successful, and being able to declare best practices for making all your customers that successful. Remember, they are faced with the decision of whether or not they want to remain your customer constantly as competitors vie for their attention across channels. At the end of the day, staying nimble, listening, and delighting your customers on a consistent basis is the key to keeping them amidst an ever-changing market.

Delighting our customers in the beginning with a disruptive technology is great (10x better, you say? And 10x cheaper too?!), but being able to lead them as we evolve alongside them is imperative. As the market and our organizations mature, we must learn how to retain our customer-led passion while augmenting our thinking to be experience and outcome driven, and ultimately become prescriptive in our customer journey mapping. When we combine what we learn through the intimacy of running all customers’ environments with what we hear from individual customers themselves, we can declare a sound, forward-thinking strategy that meets each customer's individual needs, while leveraging the insights of the many and the market. Stay tuned for Part II of this conversation where I’ll take a deeper dive into the nature of this crucial CCO driven maturity pivot toward prescriptive customer journey mapping.