Do these shocking stats prove CEOs must have ownership of CX?
Has the debate over who should have ownership of the customer experience finally been settled?
The debate over who should have ownership of the customer experience within organisations has raged for many years, and even the emergence of chief customer officers, heads of CX and other equivalent roles - positions that are tailor-made to tackle CX - have failed to bring the matter to a decisive close.
Indeed, when MyCustomer recently surveyed 75 heads of customer experience, it found that the results and requirements of a dedicated CX manager were largely dictated by where they sat within the organisation - and to whom they ultimately reported.
Our research suggests that the majority of customer experience managers either report directly to the CEO (39% of respondents) or to the CMO (20%), although there are other, rarer cases that report to the COO (14%), or other sources.
And picking further into the findings, there is quite a disparity in terms of the results being reported by these different groups.
The results recorded by those that report to the CEO are impressive and wide-ranging. Most (83%) report they have measured an increase in customer satisfaction during their tenure, while most also report improvements in NPS (58%), customer churn (54%) and growth in revenue associated with CX (58%).
Nearly two-thirds (63%) also told us that there has been a company-wide feeling that customer experiences are improving. Elsewhere, 42% report that their stats have improved compared to their competitors’. Overall, an impressive set of results for these customer experience managers.
But those reporting to the CMO are not recording metrics that are nearly as strong - only just over a half report that they have registered improvements in CSAT and NPS during their tenure. However, on a more positive note, half do report they have achieved growth in revenue associated with CX, which is comparable to their counterparts that report to the CEO, while nearly two-thirds (71%) told us that there has been a company-wide feeling that customer experiences are improving.
Elsewhere, while they are relatively few in number in our research, those reporting to the COO posted even less impressive stats. While half told us that their programmes have reduced cost of operations, only around a third report improved NPS or increases in CSAT.
Should the CEO have ultimate responsibility for customer experience?
The findings appear to support the long-held belief that the CEO should have ultimate responsibility for their organsiation's customer experience programme, even if they aren't at the coal face.
While most evidence bolstering this is purely anecdotal, a statistic from a 2015 report (which has been picked up by a number of blogs from the likes of Jeanne Bliss and Blake Morgan over the years), does lend some support.
For the Genesys report The value of experience: How the C-suite values customer experience in the digital age, the Economist Intelligence Unit surveyed over 500 senior-level executives across 21 countries to learn how global companies manage their CX programmes.
What stands out most is how strongly CEO leadership of customer experience appears to correlate with profitability. The key findings, quoted directly from the report:
"Companies which believe that they are much more profitable than their competitors are significantly more likely also to have their CEO in charge of customer experience initiatives. Whereas 58% of companies who say that they are much profitable than their competitors report that the CEO is in charge of customer experience, only 37% of less profitable companies say the same. We can say therefore that there is a clear link in our survey between CEO ownership of customer experience and profitability."
The foundations of CX success
Executive buy-in has long been cited as a critical prerequisite for customer experience success. But the EIU's findings, and MyCustomer's latest research, suggests that not only should there be commitment to the customer experience in the c-suite, but that chief executives should be making it one of their key personal responsibilities.
Of course, that's not to say that there isn't still room for a chief customer officer or CX manager - clearly the CEO is unlikely to dedicate enough time and resources to micro-manage CX - but it does suggest that the CEO should be involved with the customer experience programme at a strategic level, rather than delegating all of that responsibility to the head of CX.
The EIU research paper concludes that, based on the research, there are two basic foundations to improving the customer experience:
- Make the customer experience a priority. The research reports that companies that prioritise future investment in CX believe they are reaping the benefits of better revenue growth and improved profitability more than companies that consider the customer experience less important.
- Place the CEO in charge. The respondents indicated that companies where the CEO is in charge of customer experience initiatives are more likely to believe in them, and are more likely to be strongly profitable.
Are CEOs having a growing influence on CX?
While MyCustomer's research does indeed indicate that a growing number of CEOs are indeed becoming more hands-on with their organisation's customer experience programmes, it will be interesting to repeat our research in a year's time to see if the number of CEOs overseeing CX will continue to rise.
And there's a warning from Chris Adlard, author of The Customer Catalyst, for those that fail to buy in to it: “Clearly a customer-centric approach not only benefits the [customer]; it also allows businesses to thrive. Recently, Forbes reported that customer-led companies which had invested heavily in improving and simplifying their customer experience outperformed those who had not.
“Consequently, there needs to be a C-change (with 'C' representing the customer) in which CEOs become customer-led and move away from the short-term, financially led goals which are not going to cut it in the customer economy. If not, those one-dimensional CEOs risk becoming obsolete, the latest victim of the customer revolution.”
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.