In the competitive landscape of modern business, the role of the Chief Customer Officer (CCO) has become pivotal in steering organizations towards customer-centric growth. The Bingham CCO Authority Model provides a strategic blueprint for CCOs to amplify their influence and lead their companies effectively. This model delineates three types of authority—Positional, Borrowed, and Earned—each playing a crucial role in the CCO's ability to drive customer strategy and achieve organizational objectives.
Authority within the C-Suite is the linchpin of effective leadership, particularly for those responsible for customer loyalty and experience. As the designated customer authority, the Chief Customer Officer (CCO) is charged with the mission to shape and propel customer strategy at the highest echelons of the business. Despite often reporting directly to the CEO, CCOs may encounter hurdles in garnering the necessary authority to execute their vision. This is due to the fact that they typically do not control all customer-facing functions and must, therefore, lead predominantly through influence to address customer issues, enhance the customer journey, and ultimately boost revenue and profitability.
The significance of the CCO's role is underscored by the fact that companies with a CCO have been shown to enjoy a customer retention rate that is 5.1% higher than those without one, according to a study by the CCO Council. Moreover, businesses with a dedicated executive for customer strategy can see a 10% growth in customer satisfaction (Forrester Research).
Positional Authority is inherent to the CCO's role within the organizational hierarchy. It is the foundational level of authority that comes with the job title and can command immediate attention and action from direct reports in customer service, support, consulting, and occasionally marketing and sales. This authority is crucial for addressing specific customer issues and is most potent when the CCO is a direct report to the CEO or holds a senior position with a strong connection to the CEO. The initial influence that comes with a new appointment can wane unless bolstered by a promotion or other forms of authority. However, Positional Authority alone may be insufficient for resolving complex, cross-departmental customer challenges.
Borrowed Authority is derived from the support of individuals with greater influence, particularly the CEO. A CEO's endorsement of the CCO sends a powerful message throughout the organization that customer centricity is a strategic priority. For instance, when Nationwide's CEO introduced Chief Customer Advocate Jasmine Green, he effectively communicated her authority by stating, "This is Jasmine. She speaks for me." Without strong Borrowed Authority, CCOs may find themselves expending excessive time justifying their role rather than focusing on customer service. Although potent in the early stages, Borrowed Authority can diminish as the CEO's focus shifts, making it imperative for the CCO to cultivate Earned Authority.
Earned Authority is the most influential and enduring form of authority a CCO can possess. It is built on the tangible results and successes of customer-centric initiatives. This type of authority is gained as the CCO demonstrates how customer insights and a customer-focused approach can help achieve broader business objectives. It is the culmination of trust and credibility earned over time, leading to a virtuous cycle that reinforces both Positional and Borrowed Authority.
For CCOs aiming to solidify their role and drive sustainable business growth through customer centricity, increasing their authority is not a matter of chance but a deliberate strategy. The Bingham CCO Authority Model serves as a guide to harness and expand their influence across the organization, ensuring that customer strategy remains a central pillar of the company's success.
To explore more about the strategic imperatives for CCOs, visit the CCO Council website for additional resources such as "The Bingham Advisory: 8 Strategic Imperatives for the CCO.
Key Characteristics of the Successful CCO (CEOs and Boards Take Notice)
Hiring a CCO is more than making sure someone has customer experience. CEOs and Boards of Directors should use these characteristics as part of their hiring criteria.
How to Shape Customer Behavior?
A business can make faulty assumptions about what motivates a change in customer behavior. Learn how Google and Microsoft failed where oPower succeeded, and be challenged to take a look at how you assess desireable behaviors in your own arena.
The Tweet Heard 'Round the World
Twitter user Hasan Syed made history after British Airways lost his parents luggage on a flight from Chicago to Paris. This article takes a brief look at the control this one customer had over a brand, and the clear challenge it presents to the rest of us in how we listen to and engage our own customers.
