FOR IMMEDIATE RELEASE

Oracle’s Jeb Dasteel Awarded
2009 Chief Customer Officer of the Year Award

Announcing the formation of the Chief Customer Officer Council

LITTLETON, MASS., July 8, 2009 – Customer loyalty is the Holy Grail for many businesses, yet in most organizations, nobody is accountable for loyalty improvement in the executive suite.

“The key to business success, particularly in a down economy, is anticipating customer needs and continuously deepening customer relationships,” according to Jeb Dasteel, Chief Customer Officer (CCO) of Oracle, who was named the 2009 Chief Customer Officer of the Year last month at the first ever Chief Customer Officer Summit.

“Through a string of 55 acquisitions, Oracle has achieved nearly 100% customer retention,” Dasteel said. “We’ve gotten really good at listening to customers, prioritizing feedback, and driving customer strategy at all levels. The award is a great honor and a testament to Oracle’s executive leadership that has provided such visible support for the customer focus we’ve tried to achieve.”

Dasteel has been with Oracle for 11 years, five of which have been spent running Oracle’s Global Customer Programs and as CCO for the last year.

“Several years ago it became clear to us that the Chief Customer Officer role was a missing piece of Oracle’s strategy. Our CCO has become a key part of the Oracle transformation. The pay-off has been tremendous as we become more of a trusted partner to our customers,” said Charles Phillips, President of Oracle.

“Jeb Dasteel has made exceptional strides in improving customer relationships, driving profitable customer behavior, and in creating customer-centric cultures,” noted Curtis N. Bingham, founder of the Chief Customer Officer Council that awarded Dasteel. “Unless you’re Disney where the customer is injected into the cultural DNA, you need someone to champion the customer cause. Otherwise, opportunities are squandered, customers leave, and innovation is squelched.”

Most companies have neither the process nor the executive-level accountability to devise and execute customer strategy in order to increase loyalty and attendant profits. “In fact, less than 25 of the Fortune 1000 companies have a Chief Customer Officer,” said Bingham. “CCOs are the ultimate authority on customers and drive customer and corporate strategy at the highest levels of the company.” The three greatest responsibilities of a CCO are: 1.) Creating customer strategy based on in-depth customer insight, 2.) Driving profitable customer behavior, and 3.) Creating a customer-centric culture. CCOs are typically hired to resolve chronic customer crises, protect revenue derived from an organization’s current customer base, and establish competitive advantage.

Announcing the CCO Council

Last month, the 16 CCOs gathered at the Chief Customer Officer Summit agreed:

• Increased transparency in product roadmaps, service agreements, and pricing is driving increased loyalty and stronger customer retention as well as acquisition
• Improved customer intimacy, particularly during down economic times, is an extremely potent competitive barrier
• In the current economy, CCOs are finding they must enable customer-facing functions to have different value discussions with customers and prospects. Decisions are being made at a higher level, requiring additional executive-level insight. Customers are trading downwards, requiring stronger value propositions than before.
• The Customer Experience is made up of multiple touchpoints, and the greatest ROI can be obtained by identifying those touchpoints with the greatest emotional attachment for customers and resolving issues there first.

The CCOs all saw huge value in collaborating with their peers via the newly formed Chief Customer Officer Council to improve customer relationships and advance their careers. Bingham founded the Chief Customer Officer Council based on the needs of more than 50 Chief Customer Officers with whom he has worked since starting in the field in 2003. Curtis is the author of the forthcoming book entitled The Key to Customer Strategy: The Rise of the Chief Customer Officer to be published by HRD Press in late 2009.

The CCO Council is dedicated to elevating the role of the CCO in establishing business strategy, helping its members grow professionally, and most importantly, helping drive solid, customer-focused results in member organizations. Each year the Council recognizes with an award the CCO that has made the greatest strides on improving customer relationships, driving profitable customer behavior, and in creating customer-centric cultures. As well, the Council recognizes the CCO that has had the greatest impact on his or her peers in helping others achieve similar results.

Curtis N. Bingham is President of Predictive Consulting Group, a firm that helps companies increase customer acquisition, retention, and customer profitability through customer strategy. He is also the founder of the Chief Customer Officer Council. More information can be found at http://chiefcustomerofficer.com.

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In explaining the surprise,  Colette Douglas Home, a writer for The Herald in the UK says

Only the pretty are expected to achieve. Not only do you have to be physically appealing to deserve fame; it seems you now have to be good-looking to merit everyday common respect.

How often do we chase after the “sexy” customers–those who work for the upper echelon companies, those that have the greatest story to tell, or those who are constantly in the news–hoping that our star might rise with them?

Nearly every company I work with has their marquis accounts, and most all of these are unprofitable and should be jettisoned.  They are kept because of their “sexiness” and people put up with all kinds of abuses because of their status as a marquis account.  Some of my clients have actually improved profitability as a result of letting a particularly bad customer go.

Look beyond the “sexy” customers.  Find those customers that truly value what you have to offer.  Find those hidden and extremely profitable customers that really deserve what you have to offer–and are willing to pay you appropriately.  You’ll be more profitable and your employees will be happier for not having to deal with bad behavior that so many marquis accounts exhibit.

Hi Curtis,

We hope you are doing well. We have not received any project from you for long time. Please send us your project. Also we would highly appreciate if you can recommend our service to your friends and colleagues.

Kind regards,
<name removed>

Aaargh!  I know that the author’s command of English is getting in the way here, but looking beyond that, there are a couple of things wrong here:

1. The author hasn’t spoken with me in a long time, and just now is reconnecting, perhaps when business is down.
2. Without regards to what my business is doing, he asks for a project.  Do I have a project for him?  He doesn’t have a clue.  He’s just trolling, hoping that I might
3. Oh, by the way, recommend me to all your friends.

Does this remind you of the multi-level marketing folks?  They don’t care about the relationship, all they want are your friends.

At the core of my problem with this request is the fact that I stopped using this vendor because I wasn’t satisfied with their work. Consequently, his well-wishes fall on deaf ears, the request for new work is flatly denied, and the admonition to recommend him to all my friends is insulting.

Contrast this with another call that I received last week.  I interviewed this fellow for about an hour on behalf of one of my clients and I have spoken with him at a couple of events, but we’ve never done business.

“Curtis, what are you seeing happening with your clients during these tough times?”

“Every deal is taking longer to close.  People are afraid of buying.”

“Yeah, I’m seeing the same thing.  Lately I’ve been successful in closing a couple with something I just learned.  Are you interested in hearing what I did?”

“Of course!”

He proceeded to tell me what he had found that seemed to be working, and helped me see how it might work for me.  Only after helping me did he then ask to see if I would be interested in looking into each of our client lists to see if there might be names he could share with me and vice versa to help us complement each other.    By that time, I was more than happy to do so.

To make a referral program work, you must have three core elements in place:

1. You must have delivered stellar results.  Unless you’re dealing with completely apathetic or immoral people, nobody will make a recommendation unless they’re completely and totally ecstatic about the product/service you delivered (or unless there isn’t another choice in the marketplace and you are forced to settle for the least of two evils).  Make sure that you avoid those who’ve had a miserable experience, lest they be reminded of the bad experience and tell others about it.
2. You must have a relationship.  Without a relationship of some sort, the only way someone might consider recommending you is if you paid them to do so, which sometimes happens (think, “Win a free vacation if you pimp your friends!”).  Right now, many businesses are hurting and the best thing to do is to revisit past clients to re-establish the relationships so that then and only then can you ask for referrals.
3. You must articulate what makes a good referral for you

In a down economy like this, it makes perfect sense to go back to your customers, vendors, prospects, friends, and relatives and solicit referrals.  When you do so, ensure that you focus on rebuilding the relationship first.  Even if it takes another week, month, or more.  Offer to do or share something that the recipient values.  Once you’ve reestablished the relationship, then and only then can you ask for the referral.  Make it easy for them by being exceedingly clear about what you’re looking for.  Ask if they can think of 2-3 names that they think might get the same value out of your services.  And make sure you say thank you.  Rewarding those who provide referrals in an appropriate way is the best way to make sure they give you more names the next time.

Send me an email and I’ll be happy to call at your convenience to discuss further.

I think that the more appropriate statement is that the first step in the “transaction” is the product, and the first step to loyalty is the emotional connection created through the customer experience.  Customers have a hierarchy of needs that extends from the core offer (ie. the basic product, or simplest service) to the emotional connection.  The Model T was the core offer way back when, only available in black.  Southwest Airlines understood this very well when Herb Kelleher said that their fundamental offer was basic, no-frills transportation from one place to another. Without this stable core product or service, there can be no transaction.  Without competition, this level is perfectly acceptable.  As competition for similar core offers begins to arise, companies must go up-stream to differentiate themselves.

At the next level are some of the basic differentiators such as different colors, options, or configurations that make the product uniquely valuable.  They help differentiate the core offer from competitors.  Again, with minimal competition, this level is satisfactory, but hardly loyalty-inducing.

Beyond this level are service differentiators that may make it easier for the customer to buy or consume the product.  At this level some level of “brand preference” may be solidified that protects immediate defection to a competitor that offers a similar core offer.

Next is the personalization level, where the products and services are tailored to increasingly narrow market segments.  Through personalization, the products and services become more deeply entrenched into the customers usage patterns and more useful because they meet more important needs.  The customer experience begins to come into play at this level.

Finally, and where true loyalty begins to be earned, is at the top of the pinnacle where individual needs are met and an emotional connection is made.  At this level, companies and customers are working more in partnership with each other, the customers clearly articulating needs, wants, and desires and the company leveraging the might of the supply chain to profitably meet these, often on an individual basis.

Bottom line, you need to understand where your customers are on this progression by gathering and leveraging in-depth customer insight and then adapt your customer strategy to serve each customer segment profitably–and the way they want to be served.  Anything more and you waste resources, anything less you lose customers!

Your customers are vulnerable.  What can you do about it?

The last thing you need to do is consider what would happen if you let go of your most unprofitable customers?

While the vast majority of your customers are most likely value neutral, the real treasure lies in the extremes surrounding the neutral zone as shown in this chart.  I’ve written in the past that not all customers are created equal.  One research study found that 20% of customers created 220% of profits, and Booz Allen Hamilton suggests that as many as 25% of your customers may actually be destroying value.

The top 15-20% of your customers are most likely generating the majority of value and need to be kept at all costs.  Once you’ve figured out how to ensure your best customers remain loyal, the next challenge lies with the Value Destroyers.

One of my clients analyzed their customers and found that a handful of customers were blatantly abusing technical support, calling as often as 35 times in a single day.  While the technology issues that may warrant such a need to call are a significant but different issue, the fact that the maintenance fees could in no way compensate for such high call volume.

You need to figure out how to readjust the value balance, which may include charging more appropriately for the services they use, shunting customers to self-service channels, fixing glaring problems that invariably lead to a customer service call, migrate high-cost sales people to higher-potential prospects, etc. If you cannot realign value, then these customers might just need to be let go.  This is a difficult decision to make, but the simple act of removing a customer from the system might boost profits as they are no longer draining resources. Not to mention the fact that your precious (and fewer) resources will be freed up to better service the Value Creators.

By focusing on these five things, you’ll be able to develop a customer strategy that maximizes profitability as it protects your best and most profitable customers.  By focusing on preserving profitability, you can not only weather the storm, but even thrive as you focus your marketing and sales efforts on your most profitable prospects.  With clear insight into what customers value augmented by enabling technology, you can maintain strong customer relationships and prepare yourself well for the inevitable rebound.

In the meantime, if you would like help in identifying and keeping your best customers, as well as revitalizing sales in a challenging economy, you might benefit from our new Customer Snapshot program.

Your customers are vulnerable.  What can you do about it?

The third thing you need to do is find prospects trading downwards–into your market.

If you’re like most companies, you have prospects that have told you that “you weren’t big enough to support their needs.” They may have sneered at your lack of credentials, capabilities, etc. and ended up going up-market to your larger competitor.  Those prospects you thought were lost are now your best chance for profitable new customers.

These prospects are disillusioned with the lack of service they’re receiving from your larger competitors who’ve slashed staff.  They’ve decided that perhaps they don’t need the most glamorous PR agency–and the decidedly unglamorous fees.  Or perhaps they’ve decided that the biggest, bestest, and fastest computer hardware isn’t actually as necessary as they thought.  They are considering trading downwards, and your goal needs to be to present them with the perfect value for their newly defined equation.

Where do you find these?  You start with all of the lost opportunities in your CRM system where they had budget? but you lost out to a competitor.  You start scanning your competitor’s websites and their PR announcements to find their customer lists. And you call to find out if they are interested in receiving greater value and much greater personal attention than they are receiving now.

In the next post we’ll continue with the last of five things you need to consider as you adjust your Customer Strategy.

In the meantime, if you would like help in identifying and keeping your best customers, as well as revitalizing sales in a challenging economy, you might benefit from our new Customer Snapshot program.

Your customers are vulnerable.  What can you do about it?

The third thing you need to do is Leverage technology to do more with less.

I was speaking last week with the CEO of iLantern, a Boston-based company that helps salespeople discover potential sales “triggers” or events that typically lead to business within their target accounts.  Their technology scours public information sources for these triggers and automatically alerts sales reps.  The technology is brilliant, perhaps in a way that iLantern doesn’t even realize.  When you have fewer sales reps covering a larger number of accounts, there isn’t time to pour over the Wall Street Journal or the huge number of trade rags every morning to find out what customers, prospects, and competitors are doing.  Nor is there time to send a personal message to your customer, congratulating them on a recent win. Or to send a personal introduction to a prospect that just announced a new initiative that you are uniquely capable of helping them with.  Without technology like iLantern’s in this time-starved sales environment sales people become order takers rather than relationship builders.  Which means that deals are won on price, not value. Which means lower profits.

The customers of a Point of Sale (POS) software client told me they have shaved hours off of their daily order processing times in their restaurants, enabling their servers to spend more time with their customers.  Having enjoyed a much better overall experience , customers continued to return and spend even more.

Now is the time to focus your efforts on using enabling technology to do more with technology to make up for the people that you’ve lost.  You can’t afford to allow the precious customer relationships to languish and sour.  By automating processes to allow the remaining employees to focus on customer-facing activities that customers truly value, you can keep relationships alive and the deal flow healthy.

In the next post we’ll continue with the last of five things you need to consider as you adjust your Customer Strategy.

In the meantime, if you would like help in identifying and keeping your best customers, as well as revitalizing sales in a challenging economy, you might benefit from our new Customer Snapshot program.

Your customers are vulnerable.  What can you do about it?

The second question you need to ensure you can answer is, “Why do your customers buy?  What are their core value drivers?”

If you know the exact answer to this, you are ahead of many executives in businesses small and large. So many times we suppose we know the answer and are surprised when we find the real answer. In a previous blog post entitled, “Why Don’t You Understand Your Customers?”, I described a Fortune 20 company in the midst of a worsening downward spiral of customer defections and plummeting margins, all because they were marketing services their customers didn’t understand and didn’t value.

Customers buy for one or more of the following basic reasons:

1. Increase revenue
2. Decrease costs
3. Mitigate risks
4. Assuage emotions

The more of these Customer Value Drivers you can address at the same time, the more compelling your value to your customers.

To confirm that you know why your customers buy, you need to ask them. Pick a large handful of your best customers and go talk to them. Ask them the following simple questions:

1. Why they buy from you vs. from a competitor
2. What they value the most (or, if everything else were stripped away, what are the key things that would keep them from leaving)
3. How your products and services help them satisfy the aforementioned value drivers?

By asking these questions, you will learn the real reasons why your customers buy.  Most importantly, you’ll learn the critical aspects of your products and services that you cannot afford to cut lest you jeopardize the relationship beyond repair.

In the next post we’ll continue with the third of five things you need to consider as you adjust your Customer Strategy.

In the meantime, if you would like help in identifying and keeping your best customers, as well as revitalizing sales in a challenging economy, you might benefit from our new Customer Snapshot program.