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:
- What the C-suite is
- How are CCOs influencing businesses?
- How CEOs can influence customer-centricity
- Why do we need C-suite representation?
- The structure of customer success teams
- What challenges obscure the position of the CCO?
- Restructuring your business
- Can businesses be truly customer-centric?
What is the C-suite?
The C-suite or C-level is an acronym that refers to a senior executive group of people within an organization, traditionally occupying the title, ‘Chief’ e.g. Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operations Officer (COO) and Chief Marketing Officer (CMO).
Why does customer success need a C-level executive?
Representation matters. Period.
Would you ask a 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 CFO 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 an 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.
Chief Customer Officers 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.
Risk management
Risk management is a crucial aspect of customer success and having a representative from the customer success team in the C-suite can greatly benefit an organization. By being a part of the leadership team, the customer success representative can ensure that risk management is considered in all decision-making processes and can help mitigate potential risks that may impact the customer base.
Be ahead of the technology curve
In today's rapidly changing technology landscape, it's essential for organizations to stay ahead of the curve. A customer success leader with a strong understanding of information technology can bring a unique perspective to the C-suite and help the organization implement innovative marketing strategies to better serve customers.
Moreover, having customer success leaders in management positions such as the Chief Technology Officer (CTO) or Chief Information Officer (CIO) can ensure that customer needs are at the forefront of all technology-related decisions. This collaboration between the customer success and technology teams can lead to the development of new, customer-centric technologies.
Shows commitment to customer success
The presence of customer success leaders in the C-suite also demonstrates the organization's commitment to long-term customer relationships. In addition, having customer success represented at the board of directors level can provide valuable insights into customer behavior and preferences, which can inform strategic decision-making.
Who does the Chief Customer Officer work with?
To ensure that customer success is integrated into all aspects of the organization, the Chief Customer Officer works with the following departments.
Sales: In order to comprehend who the organization is converting and the strategies used, the CCO will liaise with the sales team, working alongside their CS-suite peer, the Chief Financial Officer (CFO).
Marketing: The CCO often collaborates closely with marketing to fully understand consumer wants and needs and to create strategies for attracting and retaining current customers.
Customer success: This one's a bit obvious, but the CCO's biggest goal is to ensure customers are getting top-notch service and assistance, and will therefore work closely with the customer success team.
Product development: In order to comprehend consumer needs and make sure that new features and products are created with the customer in mind, the CCO works with product development teams.
IT and technology: To make sure that the company's systems and technological infrastructure support the needs of the customers, the CCO may also collaborate with technology teams. Their C-suite peers in this department are the Chief Technology Officer and the Chief Information Officer.
The emergence of customer success in 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, Netflix, and Zoom have taken e-commerce 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 Chief Customer Officers 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.
Customer Success Collective
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, customer satisfaction score (CSS), customer health score and net promoter score (NPS) are vital ways to measure the health of your customer base and help you determine the 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.
How CEOs can influence 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 in-person and virtual events such as our Customer Success Festivals 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, Heads, Directors 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?
How are customer success teams structured?
Ordinarily, a customer success team will consist of Customer Success Managers (CSMs) led by a more senior team member (a Director of Customer Success, or a VP) who feeds customer success updates to the leadership (C-suite) team.
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
- (People) Manager of Customer Success
- Director of Customer Success
- VP of Customer Success
- Chief Customer Officer
Chad Horenfeldt
What are some of the biggest challenges facing the integration of CS in business?
It’s an age-old question for any emerging industry; if your team is a relatively new addition to a business, there’s an unavoidable amount of grafting to prove your team’s worth to the company.
For new disciplines like customer success, changing 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 world of 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 teams are 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 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 stable, consistent expectations 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 your marketing team, who in turn can adjust their campaigns to different audiences. If the service is poor, or the experience is lackluster, 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 restructuring. 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 careers. 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 by 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.’
Can businesses be truly 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 and customer lifetime value (CLV) – are critical for reducing churn. Knowing how to win churned customers back, is 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 their customer success team. It might be the early days of the Chief Customer Officer, but let it be said: it’s an acronym people better get used to.
