Who in retailing’s c-suites should drive customer experience?
MarketingCharts staff
Through a special arrangement, presented here for discussion is a summary of articles from MarketingCharts, which provides up-to-the-minute data and research to marketers
The chief marketing officer has gained more responsibility for the customer experience (CX) in recent years, and brand marketers have made the customer experience their top priority this year. A new SAS-sponsored report conducted by Harvard Business Review Analytics Services, “Real-Time Analytics: The Key to Unlocking Customer Insights & Driving the Customer Experience,” now finds that responsibility for the customer experience is more likely to sit with the CMO than with any other role.
The responsibility for the customer experience sits with the CMO at 36 percent of companies, per the report, ahead of the one-quarter of companies where the responsibility lies at the CEO’s feet. (It should be noted that while CMOs are owning the customer experience, they’re far more likely to be leading traditional areas of brand development and customer engagement.)
Nonetheless, the responsibility for real-time customer experience technology is more likely to rest with the CIO (30 percent) or the CTO (23 percent) rather than the CMO (12 percent).
One of the challenges with these differing responsibilities is lack of organizational alignment: just 29 percent of respondents to the survey say that CX and CX tech stakeholders are well aligned, with most saying their alignment is middle of the road. In fact, CMOs believe that organizational alignment would boost their effectiveness more than increased budgets or resources.
Of the 560 organizations surveyed, nearly two-thirds said real-time customer analytics
is important to their organization’s overall performance today, yet only 17 percent felt they were very effective at delivering real-time customer interactions across touch points and devices and 30 percent claimed they were ineffective.
The SAS and HBR study notes that “creating consensus around initiatives is critical.”
Jeff Jacobs, a partner at McKinsey & Co., said in the report, “No matter whose initiative it is, it has to be an organization-wide commitment. If marketing says they want to do this, they can start providing more personalized digital marketing and advertising, but that’s just a sliver of the overall real-time customer experience.”
- CMOs Own CX, But Not the Tech – MarketingCharts
- Real-Time Analytics: The Key to Unlocking Customer Insights & Driving the Customer Experience – SAS
- CMO Role Evolves to More Strategic Business Leadership – MarketingCharts
- What’s the CMO’s Role in Driving Growth? 5 Insights – MarketingCharts
- Are Marketers Facing Tech Overload? Plus, Where’s the Money Going? – MarketingCharts
- CMOs Identify 4 Areas in Need of Improvement in Marketing – MarketingCharts
- Marketing-IT Relationship Reportedly Improving As Alignment on Business Goals Rises – MarketingCharts
Discussion Questions
DISCUSSION QUESTIONS: What’s the best way to align CX and CX tech stakeholders to best capitalize on real-time analytics? Do you see CMOs or IT (CIOs/CTOs) being more critical in the future in delivering real-time customer interactions?
Poll
BrainTrust
Anne Howe
Principal, Anne Howe Associates
Ralph Jacobson
Global Retail & CPG Sales Strategist, IBM
Ultimately CX should be driven by an executive focused on and dedicated to CX — lumping this critical function onto either the CMO or the CIO is sub-optimal. This is not about collecting data or technology platforms, it’s about execution. The most telling statistic in the study is that only 17 percent felt they were very effective at delivering real-time customer interactions across touch points. It’s remarkable that, notwithstanding the advances made in CX technology and the investments retailers have made in these technologies, they still struggle with execution. Retailers need to stop the CX lip-service and dedicate executive-level focus on executing CX.
Execution — always and forever. Across all stores, not just flagships. What can the customer actually tell a friend about? Not what’s in the notes from the strategy meeting.
I agree Mark. Customer Experience is highly dependent upon In-Store Implementation. In the physical store that means a primary collaboration between store operations and merchandising. In the digital store, that means collaboration between IT operations and merchandising.
Throughout the enterprise, great marketing plans fail when implementation is poor.
I’m a firm believer that shopper experience is primarily about function. Service level (product availability) is number one. Trusted prices a close second, followed by convenience, store ambiance and merchandising.
Each is necessary. None are sufficient without the others.
Most organizations split these responsibilities among separate functional areas, which is why we are still having this discussion. Adding some kind of CX Czar to the C-suite isn’t an elegant solution. I’d advocate a Shopper Experience Council (SXC), composed of functional leaders and chaired by the COO. Plan it. Do it. Measure it.
The challenge with CX is that retailers break into pieces based upon their functions, roles and historical silos. From the eyes of the customer, CX is a journey across many touch points — discovery, online, in-store experience, click and collect, purchase, delivery, install and perhaps returns. In current C-suite roles, no one best capitalizes on real-time across all of the touch points that create a relationship with the customer. Maybe it’s time for another chair in the C-suite for the CXO. To fully capitalize on analytics that will change experience in meaningful ways for customers, retailers need a CXO who gets up every morning thinking like a customer wherever they are in their journey.
This is a very important subject for retailers and the survey tells a clear story. There’s an unfulfilled need in CX that still hasn’t been solved. I believe both CX and CX technology should be led with a customer focus and not an IT focus. In most cases the CMO should be leading CX and have a team that consists of marketing, analytics and technical people.
Customer experience improvement have been non-existent under the Chief Marketing Officer. A small CX presence under the CMO (which came from the voice of the customer initiative) usually has no authority and is expected to simply influence internal stakeholders who always have their own priorities. It is a set up for being almost useless, which the results have shown. CX spans organizational lines, so it rightly should report to the CEO, with staff and budget to truly act as an outcome-oriented business unit.
Don’t forget the operations team. Heads of store operations — and store associates — are the face of the brand for 90 percent of sales.
The best and often only way to align CX and CX technology stakeholders is for the CEO to commit the enterprise to a business strategy that includes the customer as a top priority. With that kind of critical leadership commitment, there is a greater likelihood for alignment not just between CX (CMO) and CX technology stakeholders but with the entire leadership team and their respective functions.
This kind of leadership also creates a role for a Chief Customer Officer (CCO), which is different but complementary to both CIO and CMOs. Barbara Thau just published a piece on this topic referencing, among others, Walmart hiring Janey Whiteside from American Express as its first CCO.
There’s so much I can say, but the short answer is that no CXO almost certainly means that customer experience is faulty somewhere, unless the CEO is truly customer-centric and customer engaged — a rarity.
A CMO is focused on creating brand identity, not executing on it. What I mean is that a brand is a promise and fulfilling that promise is experience. That takes an entire organization and hits every customer touch point including mundane things like logistics, inventory and pricing policy. Only someone with true authority and equal footing to challenge the CMO, CTO, CFO and, if need be, the CEO, in order to advocate for the consumer when a segment of the customer experience is failing, can create consistent long-tail delightful CX. A CMO, CIO, or CTO isn’t positioned for that task and doesn’t have the bandwidth to execute on it fully.
Experience is the only thing that customers care about and customers deliver the revenue. Savvy brands get that and don’t pigeonhole CX in the wrong place.
It seems like it’s finally time to address the out-of-date org chart models retailers use to manage their businesses. If the model is not aligned to the shopper, it’s just not going to be optimal over the long term. CX (across all of its dimensions) should be recognized and respected as the center of the wheel. The lack thereof is what keeps many smart people out of what could be fantastic change management careers in retail’s future.
This would have been a simple question in the past: In my view, the executive running the stores is in charge of the most customer-forward part of the business. Omnichannel has changed the landscape to a degree, but keep in mind that most retailers still do most of their business in physical locations. The “customer experience” is defined by what happens inside those four walls, not inside the marketing C-suite.
CX technology stakeholders needs a dedicated focus from a CMO who understands the customer, their needs, how the company aligns with these and what it will take to deliver maximum satisfaction around these. The CMO is the lynchpin in keeping all of these together in one cohesive piece, while ensuring that the company’s vision and mission embrace a customer satisfaction level that exceeds expectations.
The experience a customer has in a store is the entire job of retail. So why would we expect any one individual to “drive” customer experience? Experience is the sum total of all interactions with a store and involves all parts of the org chart.
Truth is, those retailers who allocate “customer experience” to one role will end up delivering far sub-standard experience.
Should someone be responsible for concepting and leading the overall goal for the store environment? That makes sense. Should someone else be responsible for guiding employee interaction with customers — trying to set up the ideal for how the employee interactions feel? Yes. What about the specifics of fixtures? Yup — someone else. What about merchandising? Yup — choosing what products go into the store is key to the customer experience.
The CMO owns the brand and therefore the customer experience. Customer experience IS a brand experience. They are also less likely to make decisions based on ops only which, at this juncture, is a huge mistake. The customer comes first, and the CMO should be the best choice to make decisions based on that premise.
How about creating a new C-suite position, the Chief Customer Officer? There are so many new tools; some analytic some — like ethnography — emerging from the social sciences, why not create a customer information czar to process it all? He or she would be responsible for all avenues of customer analytics as they applied to service, offerings, formats, strategy, etc. Her or his outputs would then provide the initial inputs for marketing and let the CTO worry about hardware and software. It’s always struck me as interesting that retailing, which professes to be all about the customer, never developed customer knowledge as a formalized internal discipline, but divided it between marketing, outside agencies, consultants, sales, etc.
Why do CX and CX tech stakeholders need to be aligned? Why is there a question of who is more critical, CMOs or IT [CIOs/CTOs]? These questions are not about CX, but about territorial internal politics within an organization. Exacerbated by very different internal perspectives of what CX is.
This is not rocket science! What ever the title, hire someone who has a passion for the customer experience, knowledgable about technology, who can walk their talk with the tech leaders. Retailers need to leverage technology to create holistic CX. Technology is the vehicle, not the driver. 20 years plus into digital retailing, now is the time!
Every single executive within a retail organization should be intimately aware and empathically-based in the effect their function has on the customer, and the effect their function has on neighboring functions in the retail organization. HR must be intimate with Technology, and Marketing must be intimate with Operations. It’s a single channel world the customer lives in, and they don’t care what business function is responsible for what, it just has to be seamless.
The biggest problem isn’t what department owns CX, it’s whether they can get the required inter-departmental cooperation to achieve it. CX can’t be silo’d because it happens online, in-app, in-store and at home with the packaging. It’s multidisciplinary, and it’s about empathy – two traits retailers need to prioritize if they care about customer experience.
Some great comments already, so I’ll keep mine simple: Retailers need to drive a culture that engenders, “If you’re not personally helping a customer, then you should be helping someone who is.” I don’t see one function in the business as more critical than another for ensuring a seamless customer experience. Sure, you can assign a Chief Customer Officer if you need one throat to choke, however the culture is key, and living that culture is the critical aspect.
Improving the consumer experience should be front and center within all disciplines of a retailer. There is an argument that if everyone owns CX, then nobody owns it. I disagree with this. CMOs, CIOs, CTOs and all c-level execs should drive a focus on CX throughout their organizations. The best way to capitalize on real-time analytics is to begin with a single version of the truth built on common data sets. There are still some retailers where product development and marketing, for example, work from different data sets and as a result, create unaligned strategies. The recipe for long-term, sustained growth begins with strategies created from real-time analytics grounded in a single version of the truth.