Is steakhouse chain wrong to have a beef with CX leadership?by
Bloomin’ Brands Inc., parent company of restaurant chains such as Outback Steakhouse, announced last month that it is abolishing the role of chief customer officer, with the chief marketing officer taking control of customer strategy. But will it be the right decision?
While the last two years have seen a notable uptick in the number of large brands appointing their first chief customer officers (CCOs), Bloomin’ Brands Inc. - parent company of restaurant chains such as Outback Steakhouse and Bonefish Grill - is bucking the trend, revealing it will be saying 'tartare' to the role of CCO.
As reported in the Wall Street Journal, last month the organisation announced that it will be restructuring to move its digital team under the purview of the marketing department, while its IT team will be led by a separate tech leader. With the chief customer officer previously overseeing these parts of the organisation, the decision has been made to abolish the role.
Customer strategy will now be the responsibility of its senior vice president and chief marketing officer, while its chief technology officer will be responsible for the company’s customer experience technology.
The report notes that the last two years had seen the chief customer officer deliver a number of significant digital programmes, including a new ordering system and mobile app, with Bloomin' Brands chief executive David Deno telling investors recently that 70% of its off-premises sales had been made through digital channels in the last quarter.
Is a dedicated CCO role important?
The move is a particular surprise as it flys in the face of the the current trend for appointing CX leadership - a number of companies such as McDonald's, Volkswagen, Under Armor and Walgreens have all made chief customer officer appointments recently.
So while there are cases of organisations hiring CCOs to oversee a short-term project, such as a digital transformation programme, Camille Nicita, managing director North America at Gongos, part of InSites Consulting, believes that the decision to consign its CCO to the bin is a misstep by Bloomin' Brands.
"The CCO fosters a customer-centric ecosystem that includes aligning the organisation internally to succeed with an authentic customer-centric presence," she explains. "This entails a strong partnership with marketing indeed, but other key functional areas will also be prominent – human resources, product innovation, customer experience, as examples, all continue to provide significant input to an ever-growing ecosystem of inputs necessary to guide a truly customer-centric organisation.
"It’s widely accepted that the customer is central to organisational growth - the question is how we move beyond a theoretical model, and actually establish structured practices for delivering on customer centricity. The best place to start is by making this a dedicated CCO role - one whose critical responsibility, among others, is to create organisational readiness for customer centricity to flourish.
"Marketing data is important, but it’s imperative to consider what we’re measuring with respect to KPIs. After all, the most critical component of establishing customer longevity is a strong, qualitative understanding of what matters to them. That’s where the chief customer officer comes in. And in 2021 alone, superpower brands such as McDonald’s, Hostess and CVS have added the title to their executive roster.
"The CCO connects cross-functional teams, empower frontline employees to interact with customers, and translate the vision of leadership to all, harmonising decision-making with customers at the heart of it."
Should marketing report to the chief customer officer?
Interestingly, by having its CMO take control of customer strategy, it also sees Bloomin' Brands contradicting recent high-profile restructures.
When McDonald's announced its restructure, for example, it revealed that marketing would subsequently report to its new chief customer officer. This is a structure that Walmart is also now using, and demonstrates a commitment to driving customer-centricity through the organisation, removing silos, harmonising touchpoints and communications, and putting an emphasis on CX-focused growth.
Despite this, research from the CMO Council from last year found that a large proportion of senior business executives in large organisations still believe it to be the role of their marketing department to have ownership of the customer experience.
The study, Rate the state of Marketing: A C-Suite Scorecard, found that 62% of the respondents considered the essential role of the CMO as “customer experience advocate and champion” in their organisation.
But many in the field of CX believe this is deeply flawed.
Chief customer service experience officer Alex Mead says: “This is by far the most common approach being taken by organisations, and from my perspective it is completely wrong. Marketing leaders lack the understanding of the importance of slick, effortless, engaging customer interaction and service experiences, nor do they have the knowledge on how to deliver what modern day customers want. That is why we often see companies with amazing brand & marketing experiences, losing their customers because of awful customer service experience journeys.
“If the CMO truly walks in their customers shoes, experiences painful multichannel customer contact designs, observes the effect of missing / late deliveries, spots the huge frustration from customers that can't easily ask a question across the channel they want, and in the way they want, AND THEN if they truly take the time to understand the customers pain points, and empower the right people to address them, then that can be used to positively influence the entire company's brand and marketing strategy. But the reality is this is a very rare situation indeed.”
Keith Gait, leader at The Customer Experience Foundation, and former customer services director at Stagecoach Bus, believes that the trend of marketing people taking chief customer officer roles will still continue until CX gets its house in order. “Marketing and customer are being bundled into the same responsibilities. No-one from CX land like that - but we’re losing the argument.
“We perennially seem to have a wider debate about what the CCO role actually is. We could line up 15 or 20 CX "experts" from across the globe, and we would barely be able to get them to agree that it's Tuesday. That's typical of our profession. The industry doesn't help itself. Meanwhile, marketing are marching their tanks on our lawn.
“We have to define that CX is not just marketing. Marketing fought for years to define that they were not just sales. How did they do that? A large part of it was through professional development, standards and education. The CIM and DMA did a great job of that, but it took many years."
Food for thought while we wait to see if Bloomin' Brands has made the right decision for its business.
Neil Davey was previously the editor of MyCustomer from 2007 until May 2023. 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.
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I'm inclined to agree that it's shortsighted, Neil. For all the reasons that research proves there is a great ROI on all customer management activities, it seems shortsighted. But it's not only this type of action. In one "State of CX" report I saw recently, (by Annette Franz in GetFeedback,) the conclusion was that by far the biggest group of CX professionals (20%) reported into the IT department. This sounds crazy to me, especially since most IT people I know look down on customers with disdain. (Huge generalisation, I know.) But the fact of the matter is, CX professionals are downgraded, and we only have ourselves to blame.
(Report is here: https://www.getfeedback.com/resources/cx/the-2022-state-of-the-cx-profes... )