CRM Starts in the Executive Suite

Chief customer officers are proliferating in organizations that embrace customer centricity.

Customer Relationship Management, March 2004

by Vicki Powers

What do Coca-Cola, Sears, and Sun Microsystems have in common? They all believe in customer centricity enough to employ chief customer officers (CCOs)—an executive-level position focused on all aspects of the customer.

CCOs slowly started appearing on executive rosters around the new millennium. But a surge of activity in 2003 has added a plethora of companies to the list of those forward-thinking firms that first embraced CCOs. United Airlines added this position last May; Alcoa hired a CCO in June, and Kellogg joined the pack in October. CCOs also appear on the executive rosters of Campbell Soup Company and NuEdge Systems. Is this another management fad? Not really, according to Scott Nelson, vice president and distinguished analyst in CRM at Gartner.

"It was something that was definitely becoming in vogue a couple of years ago," Nelson says. "It slowed down a bit because of the economy, but I expect to see CCOs as a more prominent position now that the economy is picking up. It's becoming more of an accepted business practice, especially as organizations want to make CRM a revenue-enhancing strategy."

Gartner estimates that 10 percent of Global 2000 enterprises through 2005 will promote executives to the senior management level with a CCO position. (According to Nelson, this estimate extended 12 to 18 months beyond original predictions as a result of the economy.)

What sets a CCO apart, say, from a chief marketing officer? CCOs serve as an organization's primary customer advocate at the executive level, which ties into an enterprisewide CRM strategy. CCOs also cultivate a customer-centric culture and bring the customer experience under one umbrella. Although the responsibilities vary in different organizations, CCOs carry the clout to proactively serve customers and represent their needs to senior management.

Nelson says organizations that have CCOs believe they can use technology as a competitive differentiator: "Since CRM is a technology-enabled business strategy—and it goes hand-and-glove with the concept of a CCO—it tends to be those firms that pursue this most aggressively."

Alcoa, a global aluminum manufacturer with 120,000 employees, added a CCO as one of several steps taken to renew its commitment to the customer. "We renewed and articulated detailed principles regarding our customer value," says Veronica Hagen, CCO at Alcoa. "Our goal is to present a single face to our customers. The chief customer officer is just one step in this journey. It's a major initiative, clearly sponsored by our chairman/CEO."

Hagen focuses her CCO responsibilities on guiding principles like developing deep customer relationships and maintaining a customer-focused culture. "I think there is a much greater awareness in the company of where we are with customers," Hagen says. "It's simply putting the metrics in front of people to help them make better, customer-focused decisions."

Nelson believes a CCO can significantly impact the success of CRM initiatives by pulling initiatives out of the departmental silos and elevating them to an enterprise level. This is evident at Alcoa, where customers are seeing a difference just six months into Hagen's tenure.

"There has been a pull from our customers to take a more integrated approach to the business," Hagen says. "If we can help customers solve their problems, that really creates a greater value for them. We clearly believe [that] if you grow your customers, you'll grow your business."