CXOs Go Mainstream

SAN FRANCISCO It’s a war out there. Thanks to all the blogs, ratings, rankings and reviews splashed over the Internet, consumers know more about what marketers sell and how much competing goods cost than they ever did. And if any of the experiences interacting with a company are mediocre, consumers are gone—no matter how stellar the products or clever the marketing. If the interaction is worse than mediocre, they might bad-mouth the brand to everyone on the Net.

Today marketers have to battle for consumers’ dollars by keeping empowered customers happy every single step of the way. And if they don’t do it, one of their rivals will. Forget customer service departments. This war is lost long before an aggravated consumer picks up the phone to make a complaint. A Yankelovich poll released Dec. 7, revealed that 71 percent of the respondents said that if they feel the quality of service they get in a store is poor, they’ll walk out, even if the store has the products they are looking for.

The vast majority—86 percent—said that when they get bad service, they speak up. And these mouthy consumers are becoming increasingly irate with the way companies treat them. Three-quarters of respondents thought companies care more about selling product than helping the customer, compared to 58 percent in 2004, per the report, “Consumers in Control: Customer Service in the Age of Consumer Empowerment.” Two-thirds of respondents said companies “don’t care much” about customer needs. (The online and in-person poll was conducted in the spring of 2007 and surveyed more than 4,300 people 16 years or older.)

As customers have become more outspoken about what they buy and whom they buy it from, some companies have responded by putting aside a corner office for a chief customer experience officer often called the CXO. The position has a range of titles, depending on the company, from chief experience officer and chief customer officer to svp or vp of customer experience. In general, the position reports to the CEO, cuts across the product and channel boundaries and includes a significant marketing component. The job can be quite different from one company to the next, sometimes overseeing every detail of a brand’s messaging and interaction with consumers and other times serving as an emergency resource to handle service complaints and crises.

“My team’s job is to look beyond the products and services we offer, and to address what people are most worried about when they come to us,” says Dr. Bridget Duffy, chief experience officer at the Cleveland Clinic. Her ultimate goal is to get her increasingly tech-oriented organization to act like a person, rather than a machine, “and believe me, it goes way beyond apples and newspapers in the waiting rooms,” she says.

Regardless of the industry, the CXO is dedicated to the task of improving the consumer’s entire experience across existing organizational boundaries. The financial services were an early convert to the approach; by mid-2007, 54 percent of North American banks had a CXO, per Forrester Research. About one-fourth of companies surveyed by Forrester in early 2007 had a senior executive in charge of an enterprise-wide customer experience effort. The position started appearing in 2005 primarily at regional companies, and slowly gathered steam until it went mainstream in early 2007 with acceptance of the experience-based, rather than product-based, economy. Overall, CXOs tend to work on improving existing interactions with the consumer. (This is separate from experiential or experience marketing, which creates new experiences to promote a brand.)

Sometimes the CXO post is an expansion of customer services, but because of its heavy uses of metrics, it is sometimes associated with the IT side of the business.

In its study, “The Chief Customer Experience Officer Playbook,” released in October 2007, Forrester asked senior experience executives and consultants what makes a successful CXO, and came away with guidelines for customer-focused marketers as well as their outside marketing partners.

The study included CXOs at airlines, a bank, sports team and a furniture manufacturer.

In general, states the study, CXOs have two high priority tasks: mapping the end-to-end experience from the consumer’s perspective, and establishing a “voice of the customer” system for listening to consumers, using measurements such as the Net Promoter Score. (Companies obtain their Net Promoter Score by asking customers, “How likely is it that you would recommend us to a friend or colleague?”)

At the Cleveland Clinic, Duffy and her team of six oversee surveys of patients conducted before and after their visits. Among the survey questions: “What could we have done to enhance your stay?” and “What do you want or need from us?” The answers have prompted improvements such as giving away bus passes to patients with transportation problems, arranging child care for parents, improving the procedures for checking in to the hospital and improving the system for answering the call light buttons, she says. Duffy reviews her work regularly with chief of staff Dr. Joe Hahn.

Duffy, who has been on the job since June, says her organization has already seen the financial benefits of the customer experience efforts championed by her office. Fewer people miss their appointments for lab tests, which keeps the expensive labs operating more efficiently, and there are fewer phone calls and fewer inappropriate admissions to the facility, she says.

Before joining the Cleveland Clinic, Duffy was medical director at Medtronic, a maker of high-tech medical equipment. Earlier in her career, she served as medical director of St. Jude Children’s Research Hospital.

Aisling Hassell, vp, customer experience and online at Symantec, says she and her four staff members “track Net Promoter feedback, drive that feedback back into the business” and kick off “tactical initiatives that fix broken parts of the experience and create a branded customer experience at key touch points,” such as when an order is made or when a consumer is seeking information on a software upgrade. Progress is reported to top executives and other departments quarterly.

To sustain good relationships across internal silos, Hassell recently formed a committee of senior vice presidents from every function. “The committee’s goal is to fast-track progress and make sure that we fix” any miscommunication or other roadblocks between various departments that hamper the consumers’ interactions with the company, she says.

Danita Harth, director of rooms and customer experience officer at the Sheraton Chicago Hotel & Towers, says the highest priority for her three-person team is to “find special ways to make connections with our guests, such as providing them with special amenities on the holidays.”

Ten months ago the responsibilities of chief experience officer were added to Harth’s duties as director of rooms. Part of her CXO role is to improve her cross-department relationships, which she does via weekly meetings with two separate groups: the hotel’s top executives and a committee of representatives from several departments who “review trends and discuss new ways to improve customer experience,” she says. The results of her team’s work are tracked using a guest satisfaction survey. The end result of high guest satisfactions scores is more repeat business and longer stays.

Outside marketing, strategic and research agencies help CXOs achieve their goals in numerous ways, says Bruce D. Timken, Forrester vp and principal analyst, who authored the study.

“There’s a lot of work in developing a voice of the customer program, which needs to be an early effort for any customer experience executive,” he says. Marketers need processes for examining and responding to what they hear from consumers and “agencies can help by doing primary user research—to identify who the target consumers really are and what they really need from the firm. Consulting firms can help define the new processes, roles and responsibilities. And since customer experience executives really need to develop a customer-centric culture, consulting firms can also help define and execute change management initiatives,” he says.

Symantec, for instance, has leveraged outside consultants for expertise in “touch-point mapping” and uses a measurement system by Satmetrix to organize customer data, according to Hassell. She says that she could use more help with “building a dashboard associated with Net Promoter growth.”

Duffy, who works closely with the Cleveland Clinic’s CMO, says market research data is used to guide improvements in the patient experience. Marketing staff and outside marketing partners “help us understand what patient consumers really want and can get the word out that the clinic cares about you as a whole person,” she says.

The Forrester study concludes that smart CXOs realize they are faced with nothing less than a “multi-year campaign to change their organization’s culture” and their most dramatic results will come as employee attitudes and behavior “adjust across the organization.” The customer experience wars are here and the emergence of the CXO is one step in marketers’ efforts to stay in the fray.