Customer success is finally getting its seat at the big table with other C-level executives, with the role of the Chief Customer Officer (CCO) establishing itself in the SaaS industry.
But why is it so important for customer success to sit pretty at the top table?
In this article, we’re going to look at:
- Why do we need C-suite representation?
- What challenges obscure the position of CCO?
- Why do companies need restructuring?
- Are businesses genuinely customer-centric?
What is the C-Suite?
The C-suite or C-level refers to an executive group of people within a business, traditionally occupying the title, ‘Chief’ e.g. Chief Executive Officer (CEO).
The emergence of customer success amongst the C-Suite
Over the last decade, there has been more demand than ever for whole businesses to be dedicated to customer success. This has, in part, corresponded with technological innovations that have spurred the growth of Software as a Service (SaaS).
Subscription-based companies like Spotify, Amazon Prime, Netflix and Hello Fresh have taken ecommerce by storm, and the ways in which they interact with their customers have adapted too.
So surely, if the biggest global corporations are implementing customer success, there should be a C-level position for its lead?
How are CCOs influencing businesses?
According to a study led by the Chief Customer Officer Council, ‘CCOs are becoming a staple of modern business with 22% of Fortune 100 companies, and 10% of Fortune 500 companies having adopted the role’.
Rather than the traditional, reactive approaches of customer service or support, customer success teams aim to remove the problem aspect entirely, by implementing a proactive strategy to make sure the customer achieves their intended goals with the company’s product and/or service. Ordinarily led by a Head or VP of Customer Success, CS teams communicate with their customers to deduce what is working with their product and what isn’t.
In all subscription-based businesses, avoiding customer churn is a top priority. But it’s not something that can be solved overnight. Customer success metrics like churn rate, customer retention rate (CRR), customer satisfaction score (CSS), net promoter score (NPS) are vital ways to measure the health of your customer base, and help you determine potential impact on your business.
And wanting to develop and hone your customer success skills is a critical part of being a conscientious, forward-thinking professional.
The role of CEOs in customer-centricity
Companies are looking to become more customer-centric as a whole. It’s not just the CS team’s priority anymore – CEOs should be looking to make customers a priority across every department.
This is why the role of CCO is emerging, to ensure that the customers are at the heart of every major decision at C-Suite level.
According to an article by Forbes on CEO involvement in customer success:
'63% of CEOs want to rally organizations around customers as their top investment priority.
'70% of CEOs feel a growing responsibility to represent the best interests of their customers.
'97% of CEOs believe customer satisfaction is key to business success.'
To feed this growing appetite for education, those in the customer success community (or aspirational professionals) can attend live events such as our Customer Success Festival to learn best practices and methods to drive customer success in business. These global events are dedicated to those working in customer success led by the Managers, Directors, Heads and VPs of Customer Success.
Standing as a new business function, with a community already committed to sharing knowledge, it begs the question: why does it matter that customer success teams have a trained professional in customer success as a member of senior management?
Why does customer success need a C-level executive?
Representation matters. Period.
Would you ask a Chief Marketing Officer (CMO) to set the annual roadmap of a sales team? Of course not; you’d expect the Chief Sales Officer to do the job. Likewise, you wouldn’t expect a CMO to relay top-of-the-line updates about a team they do not manage to the CEO and external stakeholders.
While there is an intersection between sales and marketing, their actual work is vastly different, and their priorities and OKRs aren’t the same. If a customer success team isn’t represented at executive level, it can be frustrating to not have their professional needs met, or properly championed by the right person.
On top of managing a team, there is the obligation of aligning company initiatives on a day-to-day basis within each team. Ensuring this is paramount to a collaborative business environment, where the customer journey and the company’s mission are harmonious.
CCOs need to exist so they can have their say in important decisions and propel the mission of customer success across the company. Their role fuses customer and corporate strategy.
How are customer success teams structured?
Ordinarily, a customer success team will consist of Customer Success Manager(s) (CSM) led by a more senior team member, a Director of Customer Success, or VP, who will then feed customer success updates to senior management.
Like most industry fields, career progression within customer success manifests itself linearly, from junior to senior levels, depending on experience:
- Customer Success Associate
- Customer Success Manager
- Senior Customer Success Manager
- Customer Success Director
- Vice President of Customer Success
- Chief Customer Officer
What are some of the biggest challenges facing customer success’ integration?
It’s an age-old question for any emerging industry; if your team is a relatively new addition within a business, there’s an unavoidable amount of grafting to prove your team’s worth to the company.
For new disciplines like customer success, to change its internal perception as a business function can be an obstacle in itself. We know we bang on about customer-centricity, but it’s for good reason! If customers aren’t at the helm of every decision, the impact can be felt throughout the business. Having a unified, customer-centric vision for a company can make the difference.
Michelle Wideman is the Chief Customer Officer (CCO) at Onna, a company that provides computer software that centralizes all of the different cloud platforms most modern-day companies use, like Slack, Google Drive, Dropbox etc.
We caught up with Michelle and asked her opinion on the status of customer success within the C-suite. Our conversation proved incredibly interesting, as she explains just how customer-centricity needs to manifest itself in every component of business:
‘For me, the toughest job is making sure you’re working for a company that values and is committed to customers’. This is vital, as without it, trouble may emerge.’
All sectors need to be focused on the customer journey.
Let’s take the big four: Product, Marketing, Sales and Finance. For the customer journey to flow correctly, these departments need to be united in their customer focus.
To enforce customer-centricity in the Product stage, Michelle remarks that a company ‘needs to implement an infrastructure that provides roadmap transparency. Doing this outlines a process for customers to submit enhancement and track enhancement requests.’
There is an unfair stereotype of Sales being a mercenary field. While Sales are unequivocally driven by revenue, they still need to be guided by the customer. Michelle identifies a way that sales can achieve this, ‘[by] ensuring that they are positioning the product and/or service appropriately, right out of the gate’. By setting this as a precedence, a business can go forth ‘selling the right level of support and services to ensure success’.
As for Marketing, Michelle draws directly on her own past and current experience:
'Given that Onna is a subscription-based SaaS company, it sells a lot large deals Enterprise License Agreements (ELA) out of the gate, but it's also preoccupied expansion. 'Land and expand' is how I've spent the bulk of my career – we're setting marketing cadences and motions that support incremental expansion. Internally the company needs to have a process outlined on how they score, prioritize and track enhancements so we're setting the right expectation with customers.'
Providing a stable, consistent expectation is clearly imperative to the success of a company. And to do that? Communicate with your customer.
‘Customer feedback is critical. You need to make sure that your product team wants product feedback and you've set up vehicles for them to gather the feedback they need. In my opinion, the worst thing you can do is start building a product in a vacuum without validating customer/market needs.’
Building a product in a vacuum is precisely the antithesis of customer-centricity, and something customer success teams actively work against. Having a COO at the table can actually put a customer strategy in motion. Customer expectations need to be met, and the only way to do this is through cross-departmental collaboration. It simply can’t happen without C-level influence and support. This is why CCOs are fundamental to business.
While Finance is generally more behind the scenes than the other departments, its understanding of the customer experience is pertinent to the rest of the business. Through profiling customers, it can share this intel with Marketing, who in turn can adjust their campaigns to different audiences. If the service is poor, or the experience lacklustre, customers can eventually churn. Michelle gets to the root of this by imploring finance teams to ask: ‘How are we collecting money from our customers? Is the process streamlined, or painful?’ The CCO position enables executive influence, and asking these questions to the top level is the first step in influencing Finance in customer value.
Business isn't just about selling a product; a business needs to strive for customer retention, by creating meaningful, long-lasting relationships.
So we pose the question: could companies improve communication by replacing hindering internal structures?
Restructuring businesses can drive customer success
For a real difference to be felt in businesses, there needs to be a restructure. Customer success must have a seat at the table, and it must have equal rank to other divisions.
Unfortunately, most people will have encountered miscommunication at some stage in their career. Whether you call it a blockage, or a barrier, sometimes information doesn’t flow and it negatively impacts your workload.
Customer success teams can sometimes report to completely different heads of departments, and there isn’t always a good alignment in terms of these teams’ priorities, methodology and objectives. Without the proper infrastructure, CSMs can find promoting the customer success agenda challenging.
As a Chief Customer Officer, it’s hardly surprising that Michelle is a champion of the CCO role:
‘Personally, I believe the CCO should be a part of the executive team and should either report to the CEO or Chief Operating Officer (COO).’
Michelle raises the same point, and identifies the inconsistencies posed from this cross-departmental management. For Michelle, all department executives should report to the CEO. That makes sense, right? But in some cases, a CCO is but a title, and doesn’t bear the same authority as other C-suite executives:
‘I have concerns with CCO reporting to the CRO; if revenue numbers are a larger concern than customer success, the CCO could inherit a deal where success may be impossible.
‘I believe the CCO has to be a great communicator; it's one of the most cross-functional roles in the company, so you have to play well in the sandbox and engage your cross-functional teams.’
Are businesses really customer-centric?
Without representation at C-Suite level and a seat at the table to bring the voice of the customer directly into executive decisions, can a business truly be customer-centric?
And how (if at all) can it be done?
According to Michelle, it’s not a pipe dream at all. CCOs streamline the alignment between customer success and other departments. She views business as a ‘three-legged stool’, representing Sales, Product and Success:
'Product and Success need tight alignment, this goes back to my prior comments about getting customer feedback to drive product roadmap – if you have these things the revenue should follow.
‘Success and Sales need to work together to outline the key enhancements that drive revenue and prioritize these items so that Product knows where to focus.
'We then need to communicate these enhancements back to the customers/prospects that requested them to land or expand the subscription revenue.’
Pulling off this ‘three-legged stool’ really boils down to listening to your customers. Without knowing your customers and actioning their responses, your business won’t be able to maintain lasting relationships. Having a CCO to work alongside the CMO CFO (Chief Financial Officer) and CPO (Chief Product Officer) would streamline customer-centricity.
To have a C-level leader understand the implications of customer strategies and the metrics used to measure success is all part of having a genuine, company-wide CS initiative. As Michelle puts it:
‘If you listen to your prospects and customers, you validate the product roadmap with them; augment this with tools that track user metrics? It's a win-win-win. Product builds successful features that are leveraged by customers, leading to more revenue.’
Being a new role in a relatively new field, CCOs will inevitably have to work harder to prove their value to the CEO. Their goal is to drive profitable customer behavior, showing the C-level that metrics that measure loyalty – customer retention, customer lifetime value (CLV) – are critical for reducing churn. Knowing how to win churned customers back, something a non-customer success C-level executive wouldn’t know. Their insight into customer behavior is unparalleled and beneficial to all levels of business.
To round things up
We can’t reiterate enough how customer success is the future. Over the last decade, we’ve seen the exponential growth of the SaaS industry; since the Covid-19 pandemic, we’ve adopted the names of SaaS titans, like Netflix and Zoom, into our day-to-day vocabulary.
We’re going to be seeing more Chief Customer Officers crop up, as CEOs realize the only way to implement a genuine customer focus in their business is to have a CCO at the head of its customer success team. It might be the early days of the CCO, but let it be said: it’s an acronym people better get used to.